Tag Archives: luxury product

Motivation – Going that Extra Mile

September 20, 2012 By in Strategy Tags: , , , , , Leave a comment

Recently I talked about EDUCATION as a vital part of the sales process.  Today, I want to talk about MOTIVATION!

In the quest to make that perfect connection with your patient/consumer, you have to remember that not everyone will have the same desire as you to go the extra mile. Your desire may be to sell luxury product, but a staff member may be more comfortable taking the “easy way out” and selling the first item a patient sees.   The unfortunate reality is that not everyone is as motivated as an owner to create a long-lasting connection or to raise the average retail selling price in the store/practice. Thus, we sometimes have to incentivize the team to represent the practice/store in the manner you want, and to achieve the goals you want to achieve.

Strategies to consider when motivating a staff to sell luxury products:

• Offer incentives – contests (rewards for selling a certain number of frames over a certain price-point), spiffs (compensation for reaching certain sales goals), etc.  I hate to admit it, but nothing works better than this.  We have years of experience working with retailers and whenever we offer a contest or spiff, our sales increase.  We would all like to think our product sells itself, but incentives do help.

• Ask your sales representative if the brand (if it is branded product) offers discounts for other categories within the brand – a watch, a handbag, apparel, shoes, etc. People love “stuff” and will be more motivated to sell a brand they wear themselves.

• Work with companies so the employees can wear the luxury product you want to sell.  Again, people love to wear expensive frames AND this will help sell the product if the staff “supports it”.

• Celebrate the success – there is no greater motivator than celebrations.  People, by nature, want to do well and want to be rewarded… Have an impromptu party at the end of the day.  Bring lunch in for the team.  Announce to the office when a special frame has been sold.  Do something to celebrate the goals you want to achieve…  Drive people to the behavior you want to encourage.

MAKE IT FUN.  BE CREATIVE.  If you keep things fun and creative, the team will thrive and you will reach your ultimate goal of selling more luxury product AND creating a great connection with your patients.

MIDO 2012: Think Different (part 1)

March 13, 2012 By in Luxury, Strategy Tags: , , , , , , , , 1 Comment

As I sit at the MIDO show, I cannot stop thinking of Steve Jobs and the Walter Isaacson bio I recently read. Jobs built his companies and his entire career while changing multiple industries all on his belief in “thinking different” and making sure his product was perfect and “inspired”.  Microsoft is the great traditional company, but Jobs always felt it lacked innovation. Apple “inspired”. And it all started and ended with Product.

I keep thinking of this while at our industry’s largest event here in Milan. I continue to stress the importance of a luxury strategy to set an office/retailer apart from the competition. Nowhere is this strategy more on display than at MIDO.

The traditional areas of the show are like Microsoft.  Great companies but not necessarily stimulating. The busiest area of the show is like an Apple conference – it’s the trend/luxe pavilion. It’s where the buyers want to be;  there is a different energy level that motivates abstract thinking. Why?  Because the best retailers know they need to set themselves apart and the way to do this is with Product. The exhibitors feel the same way. To “think different” and offer inspired, unique Product is THE winning strategy – otherwise you find yourself in a price war or “race to the bottom”.

Steve Jobs intuitively knew this from day one. And the companies and retailers in our industry that also know this are the ones succeeding in today’s tough economic climate.  Are you ready to “Think Different”?

Buying VI – The Buyer

March 8, 2012 By in Buying, Luxury, Strategy Tags: , , , Leave a comment

We have talked the past few weeks about buying tips.  As part of developing a great buying strategy and an overall luxury strategy, one should also give some thought to compensation of team members – in this case – the Buyer.

I am a big believer in incentivizing ALL team members with bonus or additional compensation if they (A) achieve their goals and (B) bring more money into the company.  My strategic consultant for our company calls this “tying compensation to desired outcome”.   This should not only focus on people in sales.  There are ways to use this strategy with people throughout a company.

I suggest implementing such a strategy with the person or people responsible for buying product.  You can make this FUN and achieve the outcome you seek.  Here are a few thoughts/ideas on ways to tie compensation to a desired buying outcome:

  1. Establish gross margin targets and for every level above the target, establish an incentive/or other reward for achievement.  This will hopefully lead to smarter buying and better overall margins.
  2. Establish your average retail for all frames sold and offer an incentive/reward if the average retails rise throughout the year. This is one of the main benefits to a luxury strategy – increased average retails without increasing actual foot traffic.
  3. If one strategy is to add new, higher priced collections to the store, develop an incentive system for finding the “right”, “successful” new collections.
  4. And the obvious no brainer – develop an incentive/reward plan for achieving higher overall sales in general.
  5. Surprise your buyer(s) with a party at the end of the year if they achieve the goals.  Simple recognition can go a LONG way!

Again, these are some easy ways to incentivize team members and make them think about the goals to achieve throughout the year.  They can be simple financial rewards in the form of additional compensation or bonus, or they can be more “fun” such as a free trip, dinner at a local restaurant, tickets to a cultural event, or a gift you know the employee would like.  The idea is to make sure the team knows the overall goal and is aware that achieving the goal will result not only in recognition, but also financial gain.

Back To Strategy

February 23, 2012 By in Luxury, Strategy Tags: , , , , , , , , , , Leave a comment

We have spent the past few weeks talking about the “HOW” of a potential luxury strategy with a focus on buying.  Today, I want to go back and reinforce “WHY” luxury is so important. Here are some recent quotes from articles in The New York Times, Women’s Wear Daily, and Vision Monday – a good cross section of publications and viewpoints.

Eduardo Munoz/Reuters

The New York Times – Wednesday February 22, “High End Retailers Report Strong Profits, but Walmart Shoppers Still Struggle.”

  • The holidays turned out to be a lot brighter on the high end judged by the results of four major retailers.  While Walmart had to lower prices so aggressively that it hurt its profit, retailers focusing on higher-income customers crowed about the solid prices those shoppers paid.
  • “I think there is generally more confidence today than there was at this time last year” – Terry Lundgren, Macy’s Chairman and CEO. He added: “Bloomingdale’s business was particularly strong.  The Bloomgdale’s customer is categorized as one who’s buying more luxury product and that business was very good, and you’ve seen that from the other luxury retailers.”
  • Price cuts meant Walmart’s margin decreased by .4%
  • Saks Fifth Avenue has historically high gross margin rate performance.  Reduced promotional activity and increased full price sales led to a .7% increase in margin.  Net income in Q4 rose 48% while sales rose 7.7%.

Women’s Wear Daily – Friday February 16: “Nordstrom Gains With Rack, E-Commerce.“

  • Nordstrom sales rose 7.2% for their current fiscal year. Net income rose 11.4%.  This year, Nordstrom expects sales to increase between 4% and 6%.
  • “Regular price selling remains at historically high levels” – Blake Nordstrom, President.

Vision Monday – Friday February 17, 2012: “2012 ‘Off to Stronger Start,’ Says Optical Business Barometer from Jobson Research.“

  • “With the January 2012 Jobson Optical Business Barometer Rating, the new year appears to be off to a strong start, and continues a strong showing that began in November of 2011,” In December, the index saw a significant improvement when the Barometer rose 0.3 from November’s index of 3.5. The January 2012 and December 2011 ratings for overall optical business are the highest since March of 2011 and higher than any month in 2010.
  • The U.S. economy isn’t the only thing that seems to be strengthening and stabilizing. Numbers for the vision care industry are on an upward trajectory as well with total U.S. revenue at retail of all vision care products and services generated during the 2011 calendar year growing to $32.8 billion, representing an increase of almost 3% from 2010 when revenue hit $31.9 billion, according to VisionWatch, a research study conducted by The Vision Council.
  • Overall units for complete eyeglasses (frames and lenses) sold increased marginally, with less than 1% gains in both frame and lens sales during the year-ending period December 2011. In dollar revenue terms, there was a healthy growth of 3% for frames and 1% in the lens market. Approximately 67.1 million pairs of frames were sold during the year-ending period December 2011, worth $8.4 billion at the retail level. During the same period, approximately 75 million pairs of Rx lenses were sold, worth $9.6 billion at the retail level.
  • Dollar sales of plano (non Rx) sunglasses increased almost 5% in the year-ending period December 2011—the highest growth rate since the recession started, to close out the year at $3.4 billion for 92.2 million pairs sold. The increase is attributed entirely to rising prices in the sunglass market as the number of units sold did not change from 2010.

What does all this mean for you?  A strategy that includes luxury product will lead to increased sales, increased margins and an overall unique point of view at retail that can help you stand out from the crowded sameness of our market and retail in general.  See the Top Reasons I had printed weeks ago.  It rings very true in light of the recent news articles:

7 key reasons luxury product should be part of your overall retail strategy

  • Luxury sales are growing at a faster pace than other price point categories.
  • Luxury attracts affluent consumers – they are more loyal, they are wealthy, they are networked and thus they tell friends about you if they like you.
  • Luxury usually means local and NOT chain stores.  Americans like to shop. They like to spend money (despite the current crisis). And they like to do it locally and not in chains.  They want something special and they want it locally.  Don’t give the business away to a chain.
  • Luxury means generally higher margins on all sales
  • Luxury means higher retail price points which means greater sales volume.
  • Luxury means higher sales per patient visit/transaction –All of this means you can increase your sales without even increasing your patient base or the amount of people coming through your door.  You can increase sales without increasing any marketing or outreach expenses.  (we will discuss this in more detail in a future post)
  • Luxury product is the best way to stand out from the competition. It’s the best way to stand out from the chain stores that all look the same.  And it’s the best way to fight the ever present internet and all the discounts you can find there.   In short, luxury product is the means to creating your own point of view at retail.

Buying III: Trust

January 26, 2012 By in Buying, Strategy Tags: , , , , , , , Leave a comment
Buying III: Trust

How many times in business have you said: “I really do not like working with him/her or ‘that company’.”  I have heard so many doctors, buyers, and dispensers say this over the years and my response is always “Well then why work with them? There are plenty of choices out there!  It’s not like you need to work with them.”

One of the great unspoken truths in retail buying – and for that matter – business in general, is that it is always more enjoyable to work with people you trust, people you like, and people you know will treat you fairly.  There may be times you have to work with someone who does not meet these criteria, but in many cases you can always find an alternative to those who just give you the “wrong feeling”.

In our industry – and I will focus on frame buying where relationships matter and there is plenty of choice – I am a big advocate for working with those you trust and like.  This is NOT to say work exclusively with a sales representative with whom you have been friends for 20 years just because you have been friendly, but I do believe it is important to TRUST the vendors you buy from.  WHY??

In many cases, buyers purchase brands or collections they feel they need – the “hot” brand of the moment (and in most cases, the one everyone else has as well) or the brand they saw in competitors’ stores. And in many of these cases, you can feature the brand or the collection, but you do not get the added benefits of working with a true vendor partner.  I feel this is the wrong approach.  You should ALWAYS work with a true partner and not just a brand you feel you need.

You will always get more out of a product when you trust and enjoy working with the people behind the product.  They will want the product to sell through as much, if not more, than you do.

  • They will be more willing to help with in-store training and merchandising.
  • They will be more supportive in both the good and (inevitably) the bad times.
  • They will tell you the truth, rather than just trying to make a sale.
  • They will have your best interests in mind as opposed to the best interest of the company they represent.
  • In short – they will go the extra mile for YOU.

Remember – the point of view in your store/dispensary is more important than showcasing a brand you think you need.   With the right doctor/patient connection and level of trust, most consumers will buy something you suggest and you like instead of the mega brand they thought they wanted. In most cases, the luxury product will offer more value and better quality than the most famous brand names available.  And if the vendor is going to go the extra mile for you, you will be able to offer more added value to your store AND the end consumer.

As always, I welcome all comments.  Is this something with which you have experience?  Please share!  Thank you.

And lastly – GO GIANTS!!!!!

Cliff’s Notes on Buying: II

January 17, 2012 By in Buying Tags: , , , , , Leave a comment
Cliff’s Notes on Buying: II

I hope everyone is finding value in these posts.  Since buying is such a crucial element in developing a successful luxury strategy, I wanted to spend a few more posts on the topic.  Today I will share some more tips.  Hope these will also be helpful:

  • Tell a unique story.  Your product must stand out. Buy product you cannot find in every shop.  It must be different from what all of your competitors are selling.
  • TRAIN, TRAIN, TRAIN and MERCHANDISE! – Buying does not stop when product arrives in the store.  Part of great buying is making sure the staff can explain what was bought and then making sure it looks good in the store.  Most companies will work with their partners on training and merchandising to ensure that product stands out and sells through – just ask your favorite vendors!
  • REVIEW and STUDY – In order to make informed decisions, you need to know what is out in the market, what is popular, what is new, and what is special.  Visit trade shows, read trade journals, and consult the web resources for our industry.  Basically – STAY INFORMED.  The most successful retailers are constantly reviewing their assortments AND seeing new product all the time.  It doesn’t mean you have to buy new product all the time, but how can you make the most educated buying decisions without knowing all of the possibilities out there?

We have spent the last two posts on buying tips. I would welcome any comments from those in the retail world. This list is by no means exhaustive and I would like to hear about other experiences or tips you may have.  Thank you.

Why Luxury Eyewear?

November 29, 2011 By in Eyewear, Luxury Tags: , , , , , , , , , 3 Comments

Q. Why luxury eyewear?

A. It can increase your sales by 10% or more.

You have taken your surveys and received advice from friends, advisors and colleagues. You have hopefully written a mission statement and maybe started to put in writing the outline of an action plan (or maybe even started a more detailed plan). But we still have not answered one of the central questions asked and one of the central reasons I have started this blog – why is luxury product so important and why should it be included in your product mix and your overall retail strategy? Clearly this is an important topic – evidenced by James Spina’s recent and passionate 20/20 & U discussion.

So… today we will talk about WHY.

Pam Danziger, President of Unity Marketing and author of Let Them Eat Cake best defines the luxury sector for us:

Today’s luxury market represents every marketers’ and retailers’ “sweet spot.” The top 25% of U.S. households (incomes of $75,000 and higher) have incomes two-and-one-half times larger than the nation’s average and they spend about two-times more than the average on most categories of consumer goods. In effect, the luxury consumer buys more of everything and they spend more every time they shop.

Light-bulb moment #1!  These are the people you want to attract to your practice/retail establishment.

Bill Curtis, publisher of the Robb Report, further defines the concept of luxury: Luxury is not a matter of what something costs.  It’s a matter of the entire visceral and emotional experience attached to it.  It is about being inspired by products and services.

Light-bulb moment #2!  This is WHY you need luxury product. It enables you to tell a unique story and offer a unique point of view at retail.  In today’s retail world, experience rules and the consumer is in charge.  Luxury product is the means by which you can tell your story and offer that unique experience.

It is important to back this up with actual numbers and facts.  Here are two VITAL statistics proving WHY you need to offer luxury product as part of your overall strategy:

  • Richard Baker of the Luxury Marketing Council states:  the Luxury sector represents over $160 billion in retail sales and is growing in excess of 10% per year, DOUBLE the rest of the industry.
  • According to fashion research firm NPD, Luxury Eyewear sales have been growing at about 10% per year on average for the past few years… far surpassing the overall eyewear market.  And growing at a time when other price points and other accessories are seeing sales declines.

Light-bulb moment #3!  What do the above definitions and statistics tell us?  Luxury is where the affluent consumers are and affluent consumers still want luxury and still spend money – despite what we read in the paper and see on the news.  If you are not catering to affluent consumers and trying to trade up your existing customer/patient base (affluent or not), you are missing an easy opportunity for sales growth.

Here are 7 key reasons luxury product should be part of your overall retail strategy:

  • Luxury sales are growing at a faster pace than other price point categories.
  • Luxury attracts affluent consumers – they are more loyal, they are wealthy, they are networked, and thus they tell friends about you if they like you.
  • Luxury usually means local and NOT chain stores.  Americans like to shop. They like to spend money (despite the current crisis). And they like to do it locally and not in chains.  They want something special and they want it locally.  Don’t give the business away to a chain.
  • Luxury means generally higher margins on all sales.
  • Luxury means higher retail price points which means greater sales volume.
  • Luxury means higher sales per patient visit/transaction –All of this means you can increase your sales without even increasing your patient base or the number of people coming through your door.  You can increase sales without increasing any marketing or outreach expenses (we will discuss this in more detail in a future post).
  • Luxury product is the best way to stand out from the competition. It’s the best way to stand out from the chain stores that all look the same.  And it’s the best way to fight the ever-present internet and all the discounts you can find there.   In short, luxury product is the means to creating your own point of view at retail.

I hope you are finding these posts insightful and helpful.  In the coming weeks we will explore the nuts and bolts of employing a luxury strategy.  Stay tuned.

Last but not least – check out the Culture Corner for some new additions!

Cliff’s Notes For Strategy Development

November 3, 2011 By in Strategy Tags: , , , , , , , , , , Leave a comment

This blog is about my unique point of view of the eyewear industry.  I firmly believe that to be successful in our industry today, a retail store or dispensary must A) offer a diverse selection of product including luxury and B) must offer the consumer a unique shopping and service experience in order to distinguish themselves from all the competition from other retailers, the internet, etc. And we will talk about this in detail over the next few posts.

But before we get to the specifics of product and experience, I thought a great place to focus would be how to begin to develop your own GREAT retail strategy. The strategy should include plans for buying, selling, marketing, merchandising, motivating, incentivizing, and creating a great environment. Today I want to start with “strategy” in general.

So, what is a good strategy?

Quick Side Bar: I think any strategy development MUST start with questions. “Answers” are great;  however, it is hard to get the right answers unless you ask the right questions. I am here to make you think (and hopefully then help answer some questions). I am a member of a group called YPO, Young Presidents Organization. The group is made up of younger presidents of companies and entrepreneurs. These people don’t want to be told what to do… In the group we have a language protocol; we rarely use the phrases “you should” or “do this.” We talk from experience and ask questions.

I am not here to tell you what to do but to ask questions and make you think. You all need to own your own decisions and business strategies which means you need to develop them yourselves. If I tell you to do something, that means nothing. If you do something on your own, you certainly want it to succeed.

Back to strategy… I am obviously a big fan of asking questions as a way to phrase the issue. So for today let’s look at some real BIG PICTURE stuff. The questions you NEED to think about in order to start developing your own strategy.

Top 10 Questions To Consider When Developing Strategy

  1. What do you want to look like?
  2. Who do you want to work with?
  3.  What are your core values?
  4. How do you treat employees? What can you do to enhance their experience and help them grow?
  5. Does your product assortment currently stand for anything?
  6. What do you want to stand for and what is your point of difference in the market?
  7. What do you stand for now?
  8. What do you want consumers/patients to think of when they see your logo or store or leave your office?
  9. Why do you think consumers/patients have chosen to come to you? Have YOU ever asked?
  10. Do you listen to your staff and clientele – really LISTEN?
  11. What connection or experience do you create every day for your vendors, employees, and ultimately your  customers? And if you had to answer this for your practice in five words, what would they be? (Number 11 is for good luck!)

In my humble opinion, you can not have a sound strategy unless you are able to clearly answer all of the above questions. So take some time to really think about these questions and answers and in the next few posts we will discuss how to take the answers and use them to develop a unique strategy for your own store/dispensary.

Hope you found today’s post insightful and helpful. As always, please email me with any questions or comments. HAPPY THINKING!

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