Shop Talk: Join the Recession Resistance
Tips to keep your pet product business financially sound in today’s economy
By Dan Rubenstein
How’s the business these days?” I assume I am not the only one being asked this question. It is the undeniable fact of a recession: This dismal economy is affecting all of us, personally and professionally. So, how does the pet-product industry tighten its collective belt? I am not an economic guru and there is no magic trick, but by simply evaluating conditions and implementing strategies to cut costs and generate income, we can weather the financial storm.
The condition of the nation’s financial system might look grim, but the future for our four-legged friends is brighter than you might think.
When the brunt of the economic turbulence shook the U.S markets in 2008, pet-specialty retailers and -service providers posted sales that fell only 7 percent, “above average for U.S. retail markets,” reported David Lummis, senior pet analyst for Packaged Facts, a market research company.
What makes our niche market luckily recession resistant? Jonah Matthias, our web store manager, put it best.
“People see their pets as family members; they don’t just stop taking care of them to save a little money,” he said.
Here are a few tips we have been using to make sure that customers continue to come to our store to keep their furry family members safe, happy and healthy.
As with most B-to-C businesses, advertising is one of our mainstay strategies to get customers through our doors. Effective as it is, though, new advertising drains money. Instead, we are examining current methods and enhancing what is working best, while eliminating what is not working.
The printed “Yellow Pages” is an old medium that needs to be retired. An effective evaluation of your advertising budget and reach will keep your cash working for you in the manner in which you need it to: Bringing customers into your store. Additionally, you can re-invest your gains in customer outreach.
It is easier to keep existing customers satisfied than it is to find new ones (though this is not an excuse to stop trying). It can be as simple as open communication and advanced as guerrilla marketing. The feedback we get from our customers is invaluable. As pet-product consumers, customers offer keen market analysis and insight into the latest trends. In addition, they keep us aware of the latest opportunities for improving our products and services—the greatest weapon in your arsenal against anonymity.
Get noticed and make yourself known through guerrilla marketing to neighborhood groups, building door attendants, adoption events, etc., and provide incentives. Start a referral program for customers sent to you. In addition, donate; donate anything you can. Involving yourself and your business with charitable organizations is just good karma. This industry is a community; now more than ever, we all have to be active, supportive members.
We are increasing our online presence to be more accessible and interactive. We want to engage current clients and invite prospective clients to explore all we offer. You can stay connected by using a content-management system, such as JOOMLA, which gives you limitless ability to modify and improve your own site without the need for an expensive web programmer.
We have also incorporated a web store, which is like opening another physical store at a fraction of the cost. It allows us to offer discounts because it is less expensive than stocking retail in-store. And, particularly if you use QuickBooks, you can find practical e-commerce platforms that integrate fairly quickly.
Think long-term, and resist the temptation to put off renovations for short-term cash-saving benefits. We just spent $30,000 to renovate our floors. While I grimaced at the price tag, the longer we delayed, the more costly it would have become. In addition, we are hoping the investment will turn into a draw as we publicize to our customers and the community that we are investing in our store even during a time when most people would think it is insane.
Consider instituting agility courses for dogs. Consumers are looking to cut back their luxury expenses. This means that instead of that cruise or ski vacation, they will be looking for fun, at-home activities that appeal to the whole family. As we all know, dogs are now more a part of the family unit than ever. In dog training, nothing is livelier or more exciting than agility. A starter agility course requires only limited floor space and equipment available for as little as $2,500. Click here for more information.
Lastly, do not be afraid to be an educated consumer yourself. We are often obsessed with what we can offer customers, but we should consider what vendors and distributors could offer us. Ask for discount opportunities, and encourage them to donate their time and products for various events.
Consider calling your bank about refinancing your loans if you feel a little too strapped. The recession has hit banking institutions hard, and it is in their best interests to renegotiate. Also, be diligent about shift time-management and payroll. Be fair to your employees, but remember that limiting unnecessary overtime is a valuable cost cutting tool that requires little time and effort. Such co-operative efforts benefit everyone involved, and the trickledown prepares us for the best part of a recession: recovery.
Recovery is our silver lining. It is the reason we all grit our teeth and bear it. We want to come out of this slump looking to a solid future and new opportunities. Recoveries, like recessions, don’t happen overnight, though, and redemption will not be a quick and easy turnaround.
No one will hand you a check to solve all your financial concerns, but by using these cost-cutting measures and resources to generate new income now, we can continue to keep our heads above water and inspire others in this unique and wonderful industry. <HOME>
Dan Rubenstein is the owner of The Paw Stop in Manhattan and a Retailer of the Year Runner-Up for 2008/2009.
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