What does Target know that we don't know?

Let’s get right to it. Target is a very successful retailer. That’s not to say that everything is perfectly rosy for them,either, in our current economy, but…they are still generating plenty of cash flow. What do they know that we don’t?

Target understands impulse purchases. “Wait” you say, “I understand them, too.” Ok. But, what may not be as clear is this: In a furniture store, impulse purchases need to be for items that DON’T necessarily require a design decision on the part of your female consumers because they are, for the most part, secretly insecure about those…

What to do?

Set up affiliate programs on your website and in your stores  for sellers of related product categories such as books, CD’s and DVD’s that help your customers become SMARTER.  Find distributors of titles that relate to the home furnishings industry and promote the availability of these related products through email marketing campaigns, direct mail, and radio advertising now through Christmas.

Why should Target get your furniture sales and you not get a piece of their book, CD and DVD pie?? Why are all saavy retailers cross merchandising into related product categories and many retailers in our industry not focused on these incremental ways to generate worry and hassle free cash flow?

It’s time to jump on this wagon in a BIG way-right NOW-before the holiday season and before the big box girls and guys eat our lunch during the holiday season with cash and  carry, inexpensive furniture they are cross merchandising the heck out of on their websites and in their stores.

I can hear some of you saying, ”No, we tried that in our stores before and it just didn’t work” or “It’s just too much trouble and we don’t understand how to manage it” or “There’s not enough profit in it to make it worth our while.”

Think again. Think lipstick. Think gadgets. Think nails. Think bubble gum.  These are very inexpensive items. They take up floor space, BUT they are VERY HIGH MARGIN IMPULSE PURCHASES.

We need to give our furniture shoppers the opportunity to BUY impulse items in our stores and through our websites in just the same way because they are not necessarily making high dollar purchases at the  moment but they are still willing to buy a product-it it’s under 25.00- that will make them feel smarter, look better, able to take better care of their family, able to make smarter “green” buying decisions, able to save money by doing home repairs by themselves, etc.

Most importantly, capturing as much data about these customers as possible when they do make this impulse purchase ONLINE or IN YOUR STORE gives you their INFORMATION which you can then use to build your email lists and your email marketing campaigns. For each customer that buys a book, CD or DVD over your website, you can ask them, right at point of purchase, to “opt in” for future emails re: products that will help them understand their homes and make smarter buying decisions.” Phrase the opt in question just like that. I don’t understand why even large retailers in other categories don’t understand the power of language and phrasing to encourage a customer-and especially the FEMALE customer to say YES.   Most women I know are anxious to become smarter and better informed when it comes to their homes and their major buying decisions.

So, how much cash flow can you generate? Let me give you an example.

RS MEANS-a division of Reed Elsevier is the largest supplier of construction data to architects, designers, home builders and general contractors in the world. They also have a publishing division that publishes several book titles now sold through Home Depot, Lowes, and Cotsco. They are opening up the furniture channel for distribution of these titles.

Bottom line: Each book retails for 21.95. 90 day terms, free inbound shipping, packaged for display. 21 book minimum order. Paperback. 8 ½ x 11, gorgeously photographed, professionally written. As with all books, if they don’t sell, you pay outbound shipping but return the books for credit.

Net profit per title sold: 8.58.

Multiply that across your website, your store locations, the fact that your consumers are already seeing these titles in their local home improvement stores. That’s just for starters. And it’s all cash flow that wasn’t there before.

Do you see a downside yet? THAT’s why all very saavy retailers cross market with these impulse purchases- they are pure cash flow, very high margin items and, most importantly, don’t require your customers to make a DESIGN decision when they are feeling insecure about spending money.

How, exactly, can you accelerate cash flow from this idea?

Hold seminars based around the book titles. Here’s an example:
If your market is baby boomers, use the title “Universal Design.”

If your market is customers wanting to know more about green design, use the title, “Green Home Improvement.”

If your market is a DIY market(do it yourself), use the title, “How Your House Works.”

Hold in house seminars and also WEBINARS right on your own website re: the ideas contained in these books. Get a radio personality to interview you about universal design or green design and lead your listeners to your website at the end- your metrics from this effort would be immediately measurable through Google Analytics.

Merchandise an area in your store for furniture that embodies universal design principles and invite through email and a phone campaign your customers who need furniture to come and find out how universal design can help them live more comfortably in their homes and how they can care for elderly parents or family and friends with special needs more comfortably.

GIVE YOUR CUSTOMERS the opportunity to network around this idea. MANY people are struggling with caring for people with special needs of all types. Women want a place to gather and exchange tips. Why not your store or even a social networking component on your website?

I could go on,but I hope you get the idea. It’s easy, you don’t have to spend a dime on product right now yet YOU generate CASH FLOW and you give your customers something THEY really NEED-information to make better informed decisions. That’s a total win.

To find our more about these books or to discuss social networking or anything else relating to these ideas, please send me an email at leslie@tkpartnership.com. I want to help you and find out what’s working for you. Let’s band together and support our industry during this crucial time.