Boutique Hotels: Quality Before Quantity

By Vladik Rikhter

boutique-hotel-room

The reason why the smartphone selfie-stick was invented is the same reason why more boutique hotels are popping up across the nation. The hospitality industry is all about having a memorable, one-of-a-kind experience. It’s the age of Facebook and Instagram where consumers basically say, “Look at me and this cool hotel where I’m staying!”

According to Best Western CEO David Kong, the Internet has driven people to more niches, and everything is more segmented. “Our six brands are actually six different needs,” Kong told the Associated Press.

A boutique hotel may appeal to young travelers aged 18 to 34 who prefer unique designs and décor; more affluent guests who are willing to pay more for special amenities; and business travelers.

Some typical boutique hotel amenities include:

  • beer/wine happy hour
  • cookies in the lobby at night
  • guest pantry with coffee and tea
  • concierge
  • breakfast buffet
  • plush bedding
  • state-of-the-art fitness center
  • club or lounge
  • shoe shine

A boutique hotel doesn’t need to be the Versailles of architecture to still offer amenities that are a notch above your standard hotel.

Maintaining a Consistent Brand

Did You Know? The world’s 10 largest hotel chains offer a combined 113 brands, and 31 of these brands didn’t exist 10 years ago.;

– Associated Press report, April 2015

Opening a boutique hotel can require a lot of investment, so that’s why many major hotel chains are in this segment of the industry. While boutique hotels allow for a good amount of creativity while building, renovating or decorating, the management, staff and overall quality of a guest’s stay must meet – and preferably exceed -- the brand’s overall standards.

See Also: How Hotel Night Auditors Should Spend Their Time

Currently, there are almost 129,000 hotel rooms under construction, up 32 percent from last year, with more than 306,000 rooms in development stages, the AP reported.

Some experts believe that the boutique hotel market will eventually reach saturation. While this remains to be seen, a hotel’s survival depends on its ability to adapt to changing market trends and visitor preferences while delivering consistent quality.

“It’s not a question of how many brands. It is a question of the right brands... We may need more.” Anthony Capuano
Global Chief Development Officer
Marriott

Topics: Hospitality

So, You Want to Open a Hotel Restaurant

By Naomi Balagot

hotel-restaurant

Opening a restaurant in a hotel comes down to two questions, depending on your side of the business.

If you are a hotelier, you must ask yourself, “How much does my company want to be personally involved in the restaurant business?” Developing a concept, hiring a staff, and managing all of a restaurant’s operations are an enormous undertaking.

Don’t just take it from us. Check out this restaurant development and operations checklist, which hospitality management specialists Turner Lodging Co. calls “just the basics.” The checklist includes the business concept stage, planning and operations, location, menu and beverage considerations, marketing your restaurant and human resources.  

Similarly, hospitality expert Gordon Cartwright advises hoteliers on what to consider if they want to open a restaurant on their property and whether or not they should contract out or run it themselves.  

“Whichever direction you choose, franchise or expansion, your premises need to be suitable to deliver a sound level of functionality,” Cartwright explains. “You'll need to consider, for example, the amount of staff you'll require, your stock of crockery and cutlery, where you can hold a stock of food, if you have sufficient kitchen equipment and a dining venue that functions with the market you're looking to engage. Your business will also need to have a structured, functional and rationalized business plan that links into and protects your current business model.”

Playing Well With Others

As a restaurateur, do you play well with others? It’s the question you must ask yourself before starting a business or expanding your franchise to a hotel. According to the experts at FoodserviceWarehouse.com, it all starts with a concept, a contract and a partnership.

From the concept perspective, restaurants have a great business opportunity for week-day hotel guest traffic, in addition to weekend guests and local traffic. The business agreement largely comes down to what the hotel owner or manger wants, since it is their turf. The contract may be formed between the restaurant and an off-site management company or between a private hotel owner and the restaurant.

Here are a few things to consider when forming a contract with a hotel:

  • What, if any, improvements are needed to the facility?
  • Who is hiring the labor to complete the work?
  • Does the hotel receive a portion of the revenue for providing restaurant guests?
  • What is the point-of-sale system when hotel guests charge meals to their room?
  • Will the restaurant and hotel share employees, including cleaning and maintenance staff?
  • Who handles property inspection and maintenance?
  • How are utilities such as gas, water and electricity shared and billed?
  • Does the restaurant have a liquor license or will the hotel provide one?
  • Will the restaurant be able to have live music and host parties/events?

Just like hoteliers, restaurant managers have plenty of their own concerns to address before signing an agreement.

Remember: Just because a restaurant is located in a hotel doesn’t necessarily mean it will survive. The same fundamentals of quality and service that apply to any standalone or shopping mall restaurant apply to hotel restaurants.

Also, if the restaurant is part of a chain, it must have a brand-consistent experience a customer/hotel patron expects when they’re stopping in from out of town. Due to the restaurant’s partnership with the hotel and the competitive nature of the industry, the pressure is on to create an enjoyable and memorable guest experience.

Topics: Restaurants, Hospitality

A Pizza Chain’s 3 Slices of Success

By Julia Burnett

pizza slice
Photo by The Pizza Review, on Flickr

If there’s one food that can be served very well or very badly, it’s pizza. The crust has to be just right, the toppings need to taste good and be evenly distributed, and higher quality needs to justify a higher price point.

A pizzeria’s three slices of success come down to quality, service and price. According to PMQ Pizza Magazine, it’s OK if a pizzeria can’t hit on all three, but offering the “absolute best” on two will make customers take notice.

You may think, “So, if I focus on service and price I don’t have to deliver on quality?” Of course, that’s not really the point. You can’t let your guard down in any one area and should strive to deliver on your brand’s standard of quality across your franchise.

For instance, if you’re operating a Pizza Hut, the mere mention of a salted pretzel crust stuffed with cheese might send a New York food critic running for the hills. Just like beauty is in the eye of the beholder, “quality” may be in the taste buds of the customer.

Daym Drops Knows What’s Up

Daymon “Daym” Patterson, otherwise known as Daym Drops, is someone who understands the three slices of a successful pizzeria. Big Daym creates viral video reviews of popular foods on his YouTube channel. In fact, one of his most-watched videos – 1.4 million views -- is his review of Little Caesars Bacon Wrapped Crust Deep Dish Pizza, which rolled out in February.

Daym knows what’s important to his viewers, and he gets right to the point.

1. Quality

From the tomato sauce and cheese to the crust, Daym is all about flavor and execution. When a pizza brand tells him that the product is covered in bacon bits, he expects to see bacon bits when he first opens the box.

2. Service

He will also mention when service is good and when it’s not. For instance, he pointed out when Little Caesars advised him to purchase a combo meal and when they put a fresh pie in the oven for him rather than selling him one that had been sitting under the heat lamp.

3. Price

Daym often begins video with his receipt. He pointed out when a large pizza, beverage and tax from Pizza Hut cost more than $15.

While Daym’s flamboyant personality has made him a YouTube star, he is a customer just like everyone else. Quality is top-of-mind for him, followed by service, and price. He is willing to buy more for better-quality food, but if a brand fails in delivering the quality he expects, he doesn’t hold back in letting his viewers know.

A Tip for Takeout

The three slices of pizza success come down to regularly inspecting your pizza franchise. While a basic sales report can provide insights about pricing and promotions, it doesn’t provide a full picture of a brand’s execution on quality and customer service. Check out what’s going on in your stores on a regular basis, but especially when a new product launches.

Pizza is a staple of the American diet and demand is seemingly endless. Set the pie bar high, and you’ll reap the rewards.

Topics: Restaurants

How Retail Reports Can Grow Exponentially

By Naomi Balagot

stack-papers

If you asked a group of retail managers what they enjoy most about their jobs, you’d be hard-pressed to find one that says “the paperwork.”

That’s the case in most jobs, isn’t it? The weekly grind isn’t appealing because most of us associate worksheets and tables with the homework from our school days. The manual work of filling out this paperwork can be a chore and you’d rather be focusing on other aspects of your business, including employee interaction and customer service.

Put some intellectual curiosity back into the grind. An automated sales report can tell you when and possibly where sales were down, but it won’t tell you why. Each “why?” leads to another report intended to provide more answers to that question. Keep asking that question and you’ll find that the number of forms to complete has just multiplied.

Save your sanity, save a tree. If the paperwork seems daunting, that’s because it is. It’s why mobile software helps bridge the gap between simply knowing about a problem and truly understanding it in order to resolve it. There are tools and resources available to help you automate and streamline processes, back up data securely, and gain actionable insights.

The Branching Out of Retail Reports

Sales reports are the “skeleton key” to your business, and are typically comprised of several sub-reports. These may include product sales and return, items profit, net cost, net profit, vendor sales, and department or category sales.

With a basic sales report, you can identify inconsistencies or weaknesses in your business. From this preliminary understanding, you can then branch out into other reports in the following areas:

  • Category management
  • Vendor management
  • Promotions
  • Customers
  • Employees
  • Point-of-sale
  • Loss prevention

Once you’ve identified critical areas for analysis, you then create specific reports with clear objectives:

Inventory Report
tells you what is selling and what doesn’t, which allows you to tweak merchandise mix.

Product Pricing & Promotions Report
Are prices consistent across locations and is inventory in stock? Real-time exception reporting is useful here to account for hindrances to retail execution. For instance, you may experience unseasonably cool weather during a cold beverage promotion, or perhaps the vendor didn’t send the correct promotional materials.

Fast-moving Items Report
What’s hot and what’s not? Compare the percent increase in sales of this item to what was projected. Also, compare it to last year’s sales with historic analysis.

Vendor Performance Report
Focuses on unit sales, inventory and return measures by supplier, and timeliness of delivery. Are your vendor partners holding up their end of the agreement and are your stores communicating effectively with them?

Employee Hours Report
Compare this to your sales report to determine if you are scheduling enough or too many employees during peak times vs. slower times. This report can also help you save wages and employment taxes.

Employee Training Report
Verifies that employees are being properly informed of important procedures, including food safety, money handling and vendor scheduling.

The Takeaway

There are some reports that humans don’t have the time or energy to complete manually on a weekly basis. Honestly, why would they with 21st century technology?

However, some of the reports we identified require managers to record observations based on their interactions with vendors, customers and employees. Don’t disregard the importance of the human senses. In retail, automated processes combined with in-field observations -- whether it’s a quality ranking, a product scan or even a photo of a store condition -- can go a long way in achieving better insights.

Topics: Retail

The Most Important Weekly Report for Restaurant Owners & Operators

By Vladik Rikhter

restaurant-management

While there’s no business like show business, there’s no business quite as challenging as the restaurant industry.

Perhaps some non-foodservice retailers will protest that statement, but they’d have to agree that restaurant hours are just as demanding as retail and pleasing customers can be a lot more stressful against a backdrop of food safety. It’s like the perfect storm of difficult business conditions!

Are you more likely to remember when someone told you not to shop at a department store, or when they told you not to eat at a certain restaurant? When something is wrong in restaurant operations, irreparable damage may be done to the brand if action is not taken quickly.

Luckily, there is something that can be done to uncover problems before they become losses. Instead of hiring Chef Gordon Ramsay and turning your restaurant into Hell’s Kitchen, you can instead collect better data that will lead to actionable results. There’s one report, in particular, that restaurant operators can’t afford to overlook.

Calculating Prime Cost Weekly

When you receive a monthly profit and loss statement, it’s not the time to try to figure out what went wrong in the last 30 days. To identify problems more quickly, industry experts recommend calculating prime cost weekly.

Prime cost is calculated by combining food and beverage costs, salaries and wages, payroll taxes and benefits. According to Jim Laube of RestaurantOwner.com, the most profitable restaurants in the country know their food and beverage costs at the end of each week.

“Weekly food cost reporting changes the entire culture in the kitchen because of the awareness and the sense of ongoing accountability it creates.” – Jim Laube, restaurant consultant

To calculate weekly food costs, restaurants must keep an invoice log, or a record of their daily food and beverage purchases. Hourly labor costs should also be calculated daily.

Did You Know? Prime cost usually runs between 60 percent to 65 percent of total sales in a full-service restaurant and 55 percent to 60 percent of sales in a quick-service restaurant.

According to Laube, many restaurants end their week on Sunday and have the prime cost report by noon on Monday. Some restaurants have the managers prepare the entire report or have a bookkeeper or clerical assistant do this work Monday morning.

To make it easier, Laube suggests having vendors prepare separate invoices for each major product type, and having them break down your food items by category, including grocery, poultry, meat, seafood, etc.

Did You Know? When done correctly, restaurants can lower their food costs by 2 to 4 percent of sales by calculating food cost and tracking inventory levels each week.

Food for Thought

Any time a process has a lot of paperwork and manual input, there’s also a lot of room for error. Electronic forms can reduce the clutter and confusion of collecting this data, especially in chain restaurant operations. Formulas to automatically calculate results can also be programmed, drastically reducing the amount of time it takes to get results.

So, instead of a manager or employee spending Monday morning crunching numbers, they can focus on kitchen culture and communicate with staff about the results that impact your bottom line.

Topics: Business Operations, Restaurants

How Hotel Night Auditors Should Spend Their Time

By Naomi Balagot

grand-budapest-hotel

In today’s economy, many companies are focused on hiring employees with specialized skill sets. In recent years, there has been a push against putting “multitasking” on your resume after researchers found that handling too many tasks at one time can be detrimental to productivity.

However, a night auditor in a hotel is one job where multitasking should be a prerequisite. You want to hire someone who is a competent problem solver and who won’t get thrown off by potentially stressful situations.

Here are just some of the tasks and responsibilities that a night auditor must complete daily:

Money Handling & Financial Reports

It’s the crucial job of the night auditor to close out daily hotel financial activities. Business is done for the day, and now it’s time to tally results and reconcile receipts.

If a discrepancy is noted or an account isn’t balance, the night auditor must fill out a report for management. He or she works as an internal auditor to make sure the hotel’s day staff didn’t make errors in room rates, bar or restaurant tabs, etc.

Front Desk

It’s less likely during the week, but someone may show up in the middle of the night looking for a room. Overbookings become the problem of the night auditor, so the individual must know how to quickly accommodate a weary guest.

Customer Service

From someone smoking where they shouldn’t be to noise coming from the next room, responding to complaints becomes the night auditor’s responsibility once the day shift leaves. The night auditor must follow the hotel’s guidelines for customer service and remain professional. After all, exceptional customer service is integral to hotel brands no matter what time it is, and customers expect it.

Housekeeping and maintenance

A hotel simply can’t afford to have housekeeping and maintenance staff working around the clock, so it becomes the night auditor’s job to document everything that happens overnight, from a clogged sink to a guest who needs more towels. Tasks are assigned to appropriate staff members the following day.

Security

Safety is paramount in the hotel industry. All staff members must know how to call in emergencies and when to call the authorities vs. calling the hotel’s security guard. The night auditor must know the hotel’s procedures and protocols, and to be able to communicate effectively with police, fire, or EMT respondents if needed.

One former night auditor recalls, “Nobody had bothered to explain ANY emergency procedures to me (I eventually read the emergency procedures manual and became the most knowledgeable person on them other than the lead engineer who wrote them).”

Good for him, but that’s actually terrifying! For the sake of your guests, please train your employees and track their progress.

Shifting Responsibilities

Just like a vampire called into the night, the night auditor must vanish before daybreak. While it’s not that dramatic, eventually the shift changes and the night auditor must hand over financial reports and other documentation to the next shift.

Communication

When the night auditor changes shift, it is likely that he or she is tired, and the person coming on to work at the crack of dawn may also need a cup of coffee to wake up. Do everyone in your organization a favor by backing up your reports. The advantage of cloud software is that anyone in your organization who is authorized to view the information can quickly see it and sort through issues.

For example, perhaps you had a guest like rock drummer/famed destructionist Keith Moon visiting your hotel last night. The night auditor can assign maintenance staff in the morning, while housekeeping should get the hazmat suits ready.

Let’s hope this doesn’t happen, but you have to expect the unexpected in the hospitality industry!

Topics: Hospitality

3 Lessons from Managing Partner and Vendor Relationships

By Julia Burnett

bud light delivery truck

Recently, I was reading up on vendor management best practices when I came across this passage about selecting the right vendor. “The vendor selection process can be a very complicated and emotional undertaking if you don’t know how to approach it from the very start,” the author wrote.

I was intrigued by the “emotional undertaking” aspect of negotiations. Dealing with various partners to reach an end goal can be highly rewarding, yet exhausting. You know the saying “it’s not personal – it’s just business!” Well, we’re all human. Success and failure in our business can most definitely feel like our personal success and failure.

It’s especially frustrating when a partner doesn’t hold up their end of an agreement, negotiations sour, and a business relationship ends. You may be quick to condemn the other party out of frustration, but there are always two sides to every story.

Have you ever asked yourself: Could I have done anything better to communicate problems before they reached the point of no return?

Working at Zenput provides me a unique experience. On one hand, we provide a service to our customers and in a way, act as a vendor. On the other hand, many of our partners are retailers looking for ways to improve vendor management with companies that deliver tangible goods. Since I see both sides of the equation, I want to share some practical advice for maintaining good relationships with vendors:

1. Communicate with Vendors From the Start

When I enter into a new agreement with a customer, whether it’s a retailer, a restaurant chain or a distributor, I want them to explain their business goals clearly from the start. I know customer service is important to any company, but if I can understand how they want to improve their business, I can better execute our strategy.

At Zenput, we also encourage our partners to communicate their expectations with vendors delivering good and services. Of course, it’s always recommended to put the finer points of the contract in writing.

2. Vendors are Not Mind Readers

If only we had this ability! Zenput relies on our partners to tell us how we can better meet their needs and improve our service. Similarly, we encourage our customers to notify their vendors of exceptions in real time. If there’s an issue affecting contractual obligations, retailers can provide visual evidence and resolve the issue in an up-front and efficient manner.

3. Request Progress Reports from Vendors

Vendors and customers rely on each other to reach their goals. With Zenput, our customers have options to change the way data is collected and presented to them, which is the chief advantage of a flexible platform. Similarly, a retailer’s vendors and partners can collect data on your behalf, and you can control their account access and privileges.

The purpose of these custom reports goes back to point No 2. You want to identify and address issues as they arise and before they impact your business.

Remember: Neither side of the vendor/customer relationship likes to be blindsided with complaints. Communicate consistently and give your vendor a reasonable chance to resolve issues that may arise.

Topics: How to be Successful with Zenput, Business Operations

Starting a Mobile Strategy in the Retail Space

By Vladik Rikhter

Mobile Strategy - hand on tablet
Photo by Hernán Piñera, via Flickr

Today’s smartphones are powerful tools that solve everyday problems for customers and business professionals alike. In our experience, the best mobile strategies have two sides: one that faces the customer and one that faces the retailer for internal operations.

Let’s explore some of the components of each side, which can help you determine your own needs in starting a mobile strategy.

Customer Facing: Branded apps

According to Carson Kuehne of Verifone, a retail mobile app provider, a customer-facing initiative is “any effort which the end consumer will directly interface with.” He calls a branded mobile app “the pinnacle of customer-facing technology” because it carries on the brand experience between store visits. Just by having a smartphone, the customer provides the marketing medium themselves and there is no material cost for pushing out ads through the app.

Making it Fun

Starbucks My Rewards Mobile App
Photo by CNET

More retailers are including gamification in their mobile apps. Fun visuals and games keep customers engaged and reward them for doing so. A popular example of retail gamification is My Starbucks Rewards, which lets customers collect stars when they pay with their registered rewards card or mobile app, or when they buy specially marked Starbucks products at grocery stores. The more stars customers collect, the more rewards they earn.

Most mobile apps are available for download on both iPhone and Android devices and can be customized to each retailer’s needs, enabling smaller chains to enjoy the same features and benefits, including promotions, mobile coupons, store locater and customer feedback.

Internal Operations: Mobile Software In Your Corner

Somewhere in America, there is a lonely retail manager sitting in a room on desktop computer, with multiple screens open, manually inputting notes from a paper audit.

When we think of retail managers, we prefer to think of them as Julie Andrews in the “Sound of Music” -- spreading their arms and twirling around happily in a field. In their hand is a smartphone. They have learned to use this device as a powerful tool for retail audits, employee evaluations, maintenance report filing, security reports, and promotional rollout compliance (working in tandem with the brand’s mobile app). Ah, the wireless freedom. It’s a beautiful thing!

Retailers work hard on the customer-facing initiatives, but are they working harder to just keep their operation organized? The purpose of having a mobile strategy for internal operations is to gain more actionable insights with real-time analysis and reduce the amount of time it takes to complete routine paperwork.

Dispelling Misconceptions

Some managers and maybe even some bookkeepers may read up on mobile software for internal operations and think that it’s designed to replace their tasks, making them less valuable to the organization. On the contrary, mobile software reduces the amount of time it takes to input information from checklists and surveys so that these valuable employees can devote their brainpower elsewhere.

If half your time was spent collecting the data and the other half analyzing data, filling out a survey on their mobile device may free up another 25 percent of your time. Instead of creating a separate memo or notification about a problem, you can work through one platform to notify staff. When people become more efficient in their day-to-day tasks, the operation as a whole becomes more efficient.

Kuehne of Verifone gave some valuable advice concerning customer-facing technology but it also applied on the internal operations side. He recommended that retailers interested in starting a mobile initiative carefully choose providers and be wary of “runaway or ballooning costs by design.”

“If a retailer doesn't know exactly what this program will cost them in year one and subsequent years, then look elsewhere,” he advised.

This is definitely something to keep in mind when starting a mobile strategy. Be sure to ask questions and choose a platform that can be customized to your business’ unique needs.

Topics: Retail

Preparing Your Convenience Store for Summer Promotions

By Vladik Rikhter

stop-n-save-fire-works
Photo by Quinn Dombrowski, via Flickr

As the Northeast and Midwest struggle to escape the icy grip of winter, it’s an encouraging sign when retailers display summer merchandise in their stores. It can also be fun for employees to set up new displays that will likely remain on the floor for some time.

Large displays, like patio furniture and kayaks, work well for wholesale retailers and department stores, but they can’t work in a convenience store where space is limited and the goal is to move items quickly off shelves.

What kinds of summer promotional products do you offer in a convenience store and how do you determine the best merchandise mix?

Keep It Cold & Fresh

roo-cup

Before summer arrives, reevaluate your store’s foodservice and snacks, as well as packaged beverages and cold dispensed beverages.

According to the NPD Group, the iced beverage market has shown double-digit growth year over year and average purchases for iced beverages nearly doubled from 2010 to 2014. Convenience stores, specifically, have become cold beverage destinations. Frozen beverage servings at convenience stores and total foodservice outlets experienced double-digit growth in 2014.

Kangaroo Express is one chain that does an excellent job of operating a highly anticipated seasonal promotion – the ROO Cup – which runs all summer long. “The Roo” also pairs discounted ROO Cup refills with snack items with the goal of getting customers in the door.

During the season of road trips, convenience stores can also benefit from high margins on fresh and healthy snacks in grab-and-go portions. Consider pretzel and carrot cups with dips, fresh salads, and seasonal produce such as watermelon and strawberries.

Keep It Fun

nerf-ad

Summer is the season of great weather and no school. Many convenience stores stock water guns, floaties for swimming, coolers, and other outdoor-related impulse items like sunglasses. If your store is located near the beach or lake, you may consider stocking towels, beach chairs, and boogie or skim boards.

Keep It HBC

sunscreen-ad

There has been a lot of channel blurring between convenience stores and drug stores in recent years.  In the summertime, convenience stores stand to profit from the health and beauty category by offering products such as sunscreen and after-sun care, lip balm and insect spray. Travelers might also need antacids, allergy remedies, tissues, wet wipes, travel-sized toothpaste, toothbrushes and other toiletries.

Keep It Regional

live-bait-sign

Obviously, a 7-Eleven in New York City shouldn’t have the same beachside offerings as a 7-Eleven in Daytona Beach, Fla. Whether you operate a five convenience stores or 50, get to know your customers and the types of activities they enjoy. Find out what the local scene is like and adjust offerings according to regional preferences.

For instance, if fishing is a popular local activity, you may want to devote part of your store to bait and tackle. If you operate near a park or outdoor concert venue, perhaps you can offer rain ponchos and umbrellas.

Communicate

The success of summer promotions largely depends on effective communication, including your ability to promote seasonal merchandise. Shout it from the rooftops! As a retailer, you can’t afford to devote valuable floor space to products and promotions without first promoting and then measuring the success of these promotions across your network.

Communicate with your employees to improve retail execution. Use real-time analytics to tweak merchandise mixes and optimize sales.

Topics: Retail

How to Improve Operations at a Home Furnishings Store

By Vladik Rikhter

room-and-board
Photo by Elvert Barnes, via Flickr

If there’s a segment of the retail industry that knows how to weather a storm, it’s surely the home furnishings market. When the housing market plummeted during the economic recession, home furnishing retailers also felt the impact.

For example, Bed, Bath & Beyond’s net sales pre-recession in 2007 were 14 percent, and dropped to a mere 5 percent in 2014, according to Forbes.

In the first three months of 2015, consumer confidence in the United States has started improving to pre-recession levels, and unemployment decreased to 5.5 percent in February. The outlook for Bed, Bath & Beyond is optimistic, especially in light of falling gasoline prices, but the rate of recovery remains slow.

On one hand, consumers are now more careful about how they spend money, and during the several years the economy struggled, the way people shopped also changed.

As Forbes explained, Bed, Bath & Beyond saw 4-percent year-over-year growth in the 2014 second quarter. Comparable sales also grew by 3.4 percent and more than 50 percent of this increase came from online sales and mobile channels.

With renewed emphasis on technology, how do home furnishings businesses hope to survive in brick-and-mortar retail?

The Price is Right

We’ve discussed the importance of inspecting your retail property and creating well-lit, clean and safe shopping environments. For retailers like Bed, Bath & Beyond, Crate & Barrel, and Home Goods, correctly pricing merchandise and making sure all promotional materials are up to date is just as important as creating an inviting retail environment. It’s also important that employees excel in customer service and exceed customer expectations.

All of these factors give customers a reason to shop in brick-and-mortar stores in addition to any online shopping they may do.

Here is a sample checklist for inspecting a home furnishings store:

  • The store is neatly landscaped, well-lit and has curb appeal.
  • The store is organized according to various sections of a home and each section flows naturally. For instance, living room furnishings/bedding are on one side of the story, while kitchen/dining room items are on the other side.
  • Store signage is clear and facilitates a customer’s movement through the floorplan.
  • Shelves are clean and not holding too many heavy objects.
  • Merchandise is arranged neatly on shelves.
  • Products in each section are not dented, scratched, opened or otherwise damaged.
    Products are priced correctly on shelf.
  • Product pricing reflects current sales/promotions.
  • Registers and point-of-sale systems are up to date and honor the latest coupons/promotions.
    Back room is organized and orderly.
  • Employees can quickly find and/or restock an item.
    Employees are trained in how to reorder out-of-stocks.
  • Employees engage customers in stores and ask if they need help locating items.

Imagine there’s a glass paperweight sitting on your desk. Over time, you’ve let your desk get cluttered and disorganized. One day, you’re bustling around your office looking for something. You start to shift around the binders and notebooks on your desk and (crash!) the paperweight falls to the ground and shatters. This could have been prevented had you organized your desk all along.

A home furnishings store should  be viewed through the lens of organization and urgency. Retailers must approach day-to-day operations like they are fragile and can “crack” at any time from the pressure of online retail competitors. Creating a highly responsive environment of customer service can improve operations and make a positive impact on a retailer’s bottom line.

Sample Retail Store Evaluation Form

Topics: Business Operations, Retail