From the NRF BIG Show: 10 Tips for Small Brick-and-Mortar Retailers to Increase Sales

Dave Ratner, an independent retailer with over 30 years experience, is the owner and CIO (Chief Instigating Officer) of Dave’s Soda and Pet City. (Don’t be fooled by the name, soda only accounts for roughly 2 percent of the company’s sales.) With 5 locations across western Massachusetts and more than 65 employees under his guidance, Ratner’s business has grown from its humble beginnings as Dave’s Soda City, which operated out of an abandoned gas station.

To impart some of the wisdom he’s gained over the years in growing his retail business, Ratner led a session at the National Retail Federation’s BIG Show this week in New York City. Ratner left attendees at the hour-long session with 10 tips they could take back to their stores and implement right away.

1. Get your customers’ contact info. If you’re giving them something of value, customers will want to hear from you, Ratner said. He cited a recent a postcard campaign his company ran: Nearly 2,500 postcards were mailed out to Dave’s best customers — those who spend more than $400 month at the store. The postcard included a coupon redeemable at any Dave’s retail location. The campaign exceeded Ratner’s expectations: 60 percent of recipients redeemed the coupon, while the other 40 percent still came into a Dave’s store.

The value Dave’s Soda and Pet City offers its customers is exemplified in its loyalty club program, Dave’s Club. Customers who sign up for the program are sent special offers and coupons. Ninety-two percent of all Dave’s transactions are tracked via Club Dave loyalty cards.

“Consumers view, somewhat unfairly, that smaller retail stores are more expensive than chain stores,” said Ratner. “Therefore, you have to give them better service and value than the chain stores.”

2. Find out what other products your customers want you to carry. Ratner recommended that attendees try out Survey Monkey, a free online surveying tool, to gather customer intelligence. Give customers an incentive to get them to tell you what they think about your business, Ratner advised.

3. Take inventory of your employees. Do you have the nicest employees in the world? Is there at least one employee that you should have fired months ago? If so, what are you waiting for, Ratner pleaded. You’ll sleep better once you do, he added. Treat your employees correctly first, and you’ll create a culture where they’ll do anything to ensure customer satisfaction.

Pay for items in your store as any other customer would, Ratner said. This sets the right example for your employees. Another way to accomplish this is by chipping in with little chores around the store — sweeping up, taking out the trash.

4. Spend a few dollars to spruce up your store(s). You don’t need to spend a lot of money, Ratner stressed. A little paint, Windex and dusting go a long way. Pay special attention to the cleanliness of your bathrooms.

5. Review all of your business expenses, particularly credit card processing charges. Ratner commiserated with the other retailers in the room who said they’re frequently contacted by credit card firms to sell their services, but he said the only way to compare rates is to get others. Give them a copy of your latest statement, Ratner advised, and ask them what it would cost you if you were working with them. You'll save a ton of money.

6. Be maniacal about preventing out of stocks. Don’t let a consumer out of your store empty handed, Ratner said. If you do, they’re likely to never come back. Have a disaster plan in place for when a product isn’t available. This includes delivering products to a customer’s home when the product comes back in stock, as Dave’s has frequently done in the past. Ratner has his employees sign two pieces of paper when they come to work for him:

• that they’ll treat customers so well that they’re likely to recommend the store to their family and friends; and
• that they have the ability to solve a customer problem on the spot without asking for help.

7. Look around to see if you can find a better location or renegotiate your current lease. With the real estate market still struggling, there are some really good deals out there to be had, Ratner noted. He should know — Dave’s Soda and Pet City just opened up its fifth location. All the big retailers have been doing this for the last two years, Ratner said. It’s time for the little guys to get in on the action. Call your landlord today to see if you can get a better deal, Ratner advised.

8. Find simple ways to increase your average order value. This can be accomplished through a couple of techniques, Ratner said:

• add signage to your stores with cross-sell and upsell deals;
• price all consumables in multiples (this is often referred to as kitting); and
• promote the benefits of more expensive products rather than their features.

To the last point specifically, Ratner gave an example of two similar sized bags of dog food, but a more nutritional brand's bag is $3 more than the other's. Ratner touts the nutritional benefit of the more expensive bag — less stool for the dog, have to feed them less of it so your cost per serving is the same, your dog will stay healthier — to help sell more of the higher priced bags.

9. Find opportunities for other people to do your marketing for you. The evolution of social media has afforded retailers this opportunity, Ratner said. Dave's Soda and Pet City gets involved in events that people care about in the communities where it operates. A recent example of this was it offered Facebook “friends” of a local animal shelter a discount to shop with Friends of Dave's cards — an easy way to track who these shoppers were. In return, Dave's donated 5 percent of all sales back to the animal shelter. This type of activity creates tremendous good will and positive word-of-mouth in your community, Ratner noted.

10. Depending on the market you operate in, cable advertising is a “no-brainer.” Operating in rural western Massachusetts, this medium is an affordable and far-reaching channel for Dave's Soda and Pet City, Ratner said. The key to advertising, according to Ratner, is figuring out how you can solve a consumer's problem, then advertising the solution. He used the example of overweight dogs, which he said vets classify as nearly every dog. To address this problem, Dave's advertises its healthier dog foods.

Here are some bonus tips that Ratner added in throughout his presentation:

• Out-guarantee your competition with a 100 percent money-back, lifetime guarantee on all items. Ratner cited L.L.Bean as a brand who does this right.
• Personalize everything. Small businesses have the opportunity for closer relationships with customers, Ratner said.
• Make the owner of your company readily available to customers. Provide his/her phone number and email address.
• “Why We Buy: The Science of Shopping” by Paco Underhill should be required reading for every employee in your company, Ratner said.