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Editorial
Business Basics
Despite everything that is happening these days—in the world,
in our country, in our own neighborhoods—there still is some
good news to reflect on in our industry. For example, retail sales
remain strong—especially for many top home interior stores,
and not just those selling duct tape and sheets of plastic.
A recent item in the Chicago Tribune reported several economists
are now questioning the validity of some of the so-called “leading
economic indicators” we use as a scorecard to keep track of
how well our economy is doing. In particular, they question the
Consumer Confidence reports. The thing is, consumer confidence apparently
is at, or nearly at, an all-time low. Yet, many home furnishing
stores are not seeing any corresponding drop in sales. People are
still shopping—and buying.
Consumers will always have a certain amount of money they will choose
how to spend. The good news for our industry is that, lately, they
have been choosing to spend it on their homes. They are fixing up
their current residences, or buying new or existing houses. Both
the U.S. Commerce Department and the National Association of Realtors
have reported recently record monthly or annual sales numbers. And,
nearly seven out of 10 adult Americans now own their own homes.
This trend plays right into the hands of the smart window treatments
retailer. Customers seem to be plentiful. What’s left to do
is sell to them. There are two basic ways to do that, both of which
come straight out of a beginning business textbook. You can sell
volume or you can sell margin. You can try to sell as much as you
can to as many people as you can and make a profit based on sheer
numbers (and in the course have to meet or beat every other retailers’
prices to keep more customers coming in), or you can sell to many
fewer customers (in fact, there are things you can do to build strong
relationships with good customers and discourage other shoppers
from even coming in) but sell them higher-end products and make
a profit on the higher margins these treatments provide.
The choice, of course, is yours. One seems like a constant mad scramble
to keep sales coming in, the other a sensible and lasting approach
to building repeat sales. We’re pretty confident which way
is best.
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