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When The Going Gets Tough, Get Going Mercedes Gonzalez Shares Her Industry Expertise WSA Attendees: Don’t miss Mercedes Gonzales’s seminar, How To Run A Successful Store, Parts 1 & 2, Thursday Feb. 12 9:00 a.m. −10:00 a.m. & 10:30 a.m.−11:30 a.m. at the Mandalay Bay Convention Center, Ballroom C!
Don’t be discouraged by the bleak headlines. According to retail expert Mercedes Gonzalez, now is actually the best time to open a new store or expand your existing business. “People are still shopping,” Gonzalez points out. “Nobody’s going to be walking around naked or wearing a tent or garbage bags or paper shoes, so they have to go somewhere, right?” But, even if you have the long term vision needed to grow when other retailers are running scared, Gonzalez is quick to point out that there’s a right way and a wrong way to proceed.
 Seize The Moment
With department stores playing it safe, shoppers are turning to boutiques and independents to find quality product to keep their wardrobes fresh. “On Black Friday everybody went to the malls, they went crazy; maybe they bought something that the stores were giving away,” says Gonzalez. “And then Saturday, the boutiques and the independents had a tremendous day because people actually wanted to buy things that were different, things that had some design and some quality to them and they weren’t finding that at the big boxes.”
 Know Your Place
With the increased availability of retail space, securing the perfect location may seem like a cinch, but what exactly makes a location a home run? “When we look at stores that are closing, the biggest mistake is in not having enough traffic,” says Gonzalez. “That lack of traffic hurts turnover and your turnover then hurts profitability.” But, as Gonzalez explains, it’s not just about having traffic, but having the right traffic. “One of the misconceptions in location is that you want to be next to a bank or a post office or a supermarket—places that are high traffic,” she says. “But the truth is you don’t, because that’s not shopping traffic. Think about the last time you went to the post office, the bank, the supermarket. You didn’t go at a leisurely time and say to yourself, ‘I’m going to go shop in a boutique now.’ I’m sure even in your own neighborhood there’s a little shop that you’ve been meaning to go to because it looks cute, but you never do because it’s not on your shopping route; it’s on your going-to-work route or church route.”
Do The Math
It takes more than a good location to keep consumers coming back; you need to evolve with your customer and keep on top of business basics such as retail math. “It’s not exciting, but it’s so important,” says Gonzalez. “Sales per square foot, turnover and margin and how to mark up appropriately—we talk about all that. There’s also an emphasis on understanding your target market and how they evolve and how your store has to evolve.”
 Reality Check
Though many footwear, apparel and accessory retailers build their businesses around a passion for the industry, creating a successful store also requires business savvy. “I’ve noticed at the specialty stores they never learned to negotiate,” she says. “They never learned to look for off price or margin builders. And at the end of the day, if your sales are less, you have to make more money on each sale.” And don’t forget to ask manufacturers for promotional materials. “There are things you can do that are very simple and cost efficient. Ask them for signage for the store or postage paid postcards to help you promote a brand when the new collection comes in—those are the things that are often overlooked and have a huge tangible value. Brands will provide them for free, but you have to ask for them.”
Mercedes R. Gonzalez is the director of the Global Purchasing Companies, a full-service buying office that plans and implements retail strategies with specialties in new store planning and streamlining established businesses. Gonzalez has been a buyer in the garment industry since 1988.
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