In this new series, of posts, I want to address the unique challenges and opportunities related to buying for a small boutique. As many of you know, a small boutique cannot realistically compete with a large retailer when it comes to volume of inventory and speed of inventory turnover. However, those who own a small boutique have the opportunity to offer a more personal level of service and a more thoughtful, specialized selection of inventory.
To make smart buying decisions and avoid getting stuck with extra inventory, it's so important to research your market by paying attention to who your current and prospective customers are. Most large stores hire a firm to research and survey the general vicinity of the store, identifying age, gender, annual income, and other potentially relevant factors in the area. But you can get the information you need just by taking a mental note of what types of people are coming through your doors.
Important Factors to Consider:
1. Age: Which age groups are most common within your customer base? Teenagers are automatically going to be looking for different styles than seniors.
2. Size Matters: Are a significant number of your customers plus-size? There is always a demand for stylish options in the plus-size market. If you feel this demand in your store, stock accordingly. Do you constantly seem to be running out of a certain size? Make note of this when you reorder or buy for the next season. Every size you're out of equals dollars lost.
3. Budget: What are they willing to spend? We are always working to express the long-term value of buying alpaca to our customers, and we should never stop doing that. But most people have a number in mind that they are willing to spend, period. You should always stock aspirational pieces for the customer who wants to make a special splurge, but if you notice that your average customer will, for instance, refuse to spend more than $200 for a sweater, $80 for a scarf, or $500 for a total purchase, then make sure to stock inventory within their price range.
4. Who Are They Shopping For? If you get too caught up on the stats of the customers you see and only buy specifically for them, you may be ignoring entire categories of potential sales. For example, if you don't stock men's because you rarely see male customers, then you are missing out on making sales to women who would love to buy for their husbands. Or if your clientele appears to be mostly seniors, and you only buy for them, then you'll never see the dollars they're looking to spend on their grandchildren. Why not experiment with a small section of trendy gift items for the younger crowd and make sure to recommend them to your older customers, encouraging them that you know what teenagers and twenty-somethings are shopping for.
In addition to observing foot traffic in your store, other ways to collect helpful information are through customer information cards, voluntarily filled out by customers, and by scanning your records and receipts for ADS (Average Dollars Sale) and UPT (Units Per Transaction.)
Armed with this research, you can make more informed decisions when buying for your store and please your customers with the relevance of your stock. Next, we'll address how to strategically buy inventory once you've thoroughly researched your market.