Is It Time to Up The Ante?

The world is improving. Profits are soaring. Now is the time to take a large slice of the pie…but it doesn’t come cheap.

Listed below are four important figures we have identified through the first half of this year that might be telling us that it is time to step up to the plate in retail.

10% to 5.3%

The facts: In October of 2010 the unemployment rate peaked to 10%. As of June of 2015 the unemployment rate was at 5.3%–the lowest since April of 2008. In fact through June of 2015, this is the first time since 2007 that we have had 10 consecutive months under a 6% unemployment rate. Do you remember how nice it was in 2007? Source: http://data.bls.gov/timeseries/LNS14000000

What does it mean? The workforce is shifting. The young people that have been preached into everyone’s throat over the last 5 years are beginning to jump into the workforce and ultimately those who have been looking are getting passed up on jobs.

How do you capitalize on it? Get someone young into your management team ASAP. The voice and culture of your organization depends on finding a young voice to speak to these people. It is not solved through advertising or social interaction on Facebook. It is solved through making sure your personal experience satisfies them.

7% to 5.75%

The Facts: Between our 15 furniture & mattress advertisers that have been with R&A since the beginning of 2013 thru June of 2015 this is how their cost of adv relating to sales has changed. The key metric that you need to take into consideration? Our largest advertising spend increase during that time period was 25% for one client. The rest have either modestly increased by 5-7% or many have been flat in advertising spend while increasing their sales.

What does it mean? Our clients, and we are believing most furniture retailers, have a lot of capital at their disposal because they are growing sales, margin and profits all while maintaining overhead.

How do you capitalize on it? EXPAND YOUR FOOTPRTINT! Build an off site distribution center so you can buy product in container to get your COGS down (and your margin up) or begin considering building another location or a different satellite store in the near future. In the last 12 months there have been 5 remodels, 2 warehouse expansions and 5 new stores added to our network of retailers.

$0 to $3444

The Facts: In June of 2014 we spending approx $0 on Facebook Sponsored Stories/Boosted Posts—we were buying into the belief that this was a safe vehicle and we didn’t want to jeopardize the users. Well, fast forward to June of 2015 our 25 clients spent $3800 on Facebook Boosted posts or approx $152 per account. These posts reached approx 507,000 people or exactly $.006 per impression.

What does it mean? Facebook is no longer a happy, go lucky vehicle. It has become a tried and true advertising vehicle that can be leveraged to drive sales…not comments/likes/shares and viral capability.

How do you capitalize on it? Begin taking one aspect of your current advertising mix and transferring those to Facebook boosted posts. For one-week drop your column inch width in the newspaper down from 4 to 3 or lose the morning rotator on broadcast or lose a whole days worth of radio frequency. Plug that number into Facebook to determine how many people you could reach with that small dollar amount verses the total dollars you are spending on those medias. The answer will become crystal clear.

162,155 to 191,632

The Facts: This number represents a sampling of 10 of our accounts website visits Jan 1-Jun 30 2014 compared against this most recent Jan 1-Jun 30 time period of 2015. Web traffic to these ten sites increased by 18%. In 2014 approx 5 of those accounts were leveraging some sort of paid search through a search engine during that time frame. During this most recent time frame all 10 of those accounts were not leveraging paid search but their web activity increase by 18%!

What does it mean? Advertising high-ticket goods is 100% about interruption. Leveraging cost-per-click ads or banner ads on 3rd party sites does not interrupt the consumer. It is just like placing a billboard on a highway. To get the right placement you have to pay more than you want to and ultimately have to keep competing to keep that spot.

How do you capitalize on it? Spending on interruptive medias (TV, radio, direct mail, Facebook, Email) help drive activity to your site because that is where the consumer goes first. Spending your dollars on these vehicles is going to help increase your web activity and ultimately qualify the consumer to be an easier sell when she walks thru the door.

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