Case Study 1 – Retail

A retail store in a small regional town

A retail store in a small regional town was fighting for its life. As a result of our initial conversation there were four presenting issues.

  • Limited understanding of their customer base
  • Spending thousands of dollars on advertising and no money left for the owner.
  • Conflict with the Landlord.
  • Problems bank financing inventory.

The owner loved her store, was great at finding unique inventory, loved her customers, and had great staff. Even with all the right elements in place the owner was exhausted by the inability to find a way forward. There was limited time, limited money and limited energy to spend. I was introduced by a friend as someone who could help. Over a few conversations trust was built up and agreement was reached to engage a process of renewal and transformation.

Here’s how things worked out:

  1. The owner thought most of her business was from tourists walking by or who came in as a result of an ad. As a result the owner was spending thousands of dollars per year advertising in tourist publications. To figure out who really came to shop we designed a postcard size check list that the customer filled out during check out. The survey was done over a two week period during two different months. The big surprise was the majority of customers were local and came in the store at least 4 times per year. They also wanted to receive direct information on sales and new inventory. Very few customers came in the store as a result of the advertising.
  2. Immediately the owner cancelled all trade advertising resulting in a net cash flow to the owner. The names of customers were collected and a direct communication strategy was implemented.
  3. The conflict with the landlord could not be resolved. The owner loved the business and could not imagine doing anything else in ten years. With that commitment the best way forward was to purchase a space (become your own landlord). It turned out that a building five blocks away on the same street was for sale. Immediate negotiations started and after 6 months of renovations the new store was opened.
  4. The problems of bank financing inventory disappeared because the ownership of the building provided plenty of collateral to finance a line of credit. Ten years later the owner started another business venture and the building is now rented out and providing income.