Get Pumped!!!

– Don Capman, President, J.D. Associates

The other day, I was watching the news and heard how some Americans were coping with the rising prices of gas. Several people who had no choice but to drive to work were cutting out spending money on snacks and lunches, brown bagging instead. I immediately thought that I had uncovered a government conspiracy to make a healthier America. Think about it. If America’s #1 health problem is obesity, and if Americans can no longer afford to buy snacks, then people will begin to lose weight, become healthier, live longer and insurance premiums will go down. What an ingenious way for the U.S. Government to manipulate the population into becoming healthier! Then I realized that bureaucracies are stagnant institutions with very little foresight, so I dropped the conspiracy theory.

I also recently read a news report that Iranians were paying .25 cents for a gallon of gas. The problem in Iran is that the average Iranian can fill his tank cheaply but traffic congestion is so bad, he can’t go anywhere. Although our traffic leaves a lot to be desired, we can still get around. Our problem in the United States is that we can no longer afford to get around.

There is increasing evidence that consumers are slowly being affected by high gas prices, and they’re not only cutting out snacks but are beginning to retreat on most types of spending. Although the consumer has been slow to respond to the high gas prices and spending continues to be strong, the statement made by U.S. Secretary of Energy Bodman on Meet the Press on Sunday, April 30, 2006, that energy prices will continue to remain high for the foreseeable future, will eventually have an adverse economic impact on retail. How can you weather the storm and stay in business and be profitable as discretionary spending shrinks? Here are a couple of ideas:

• PAY MORE ATTENTION TO YOUR E-STORE

Most successful retailers have thriving e-commerce sites that are making a lot of money. In many cases, the e-commerce stores are greatly outperforming their brick and mortar stores. If consumers are worried about gas prices and start to curb their trips to shopping destinations, they will likely resort to on-line shopping. Customers more frequently go back to e-stores that are constantly being updated with new merchandise. So if your e-store is tired, breathe some life into it and reap the benefits. If you don’t have an e-store because you just didn’t have the time, don’t wait until you have too much time because that may be too late. Make sure you use an experienced e-commerce expert as a consultant to get the best results.

• DEVELOP CREATIVE “OUT OF THE BOX” PROMOTIONS FOR YOUR BRICK & MORTAR STORES.

Most retailers offer promotions on a regular basis. Traditional promotions might not work in a gas crisis since the customer does not want to spend the money to drive to your store. Why not pay the customer to come to your store by giving away a gas card with every purchase? These gas cards can be in different denominations and may actually entice the customer to buy something just to get the card. This promotion also deals with the crisis head on and doesn’t try to sweep the problem under the rug.

As I have often mentioned in the past, create fun and exciting promotions that will draw customers into your store. When I owned home electronic stores, we had a promotion that featured Clayton Moore, better know as The Lone Ranger. He signed copies of his new movie. We had lines and lines of people for the event, many who had never been into my stores, they all spent money and many became regular customers. If you sell books, have a book signing. If you sell fashion, have a “meet the designer day” or a fashion show. If you sell gifts, have a “collector’s day”. I cannot overemphasize that you need to see your business as “show business”. Any promotion, to be effective, has to require the customer be physically present in your store. Customers want and need to be entertained. Go for it.

If you feel you just don’t have the creative ability to think up exciting promotions, hire an experienced consultant to work with you. Don’t throw your profits away by advertising in the mass media. Put your resources in places that will increase your profits and produce results. Surrendering to an international crisis, that you can do nothing about, should not be an option. Be proactive, succeed and have fun doing it.