New Data Reveals Brick-and-Mortar Retail is Far From Dead

With all the casualties in the brick-and-mortar retail world, it’s easy to fall into the mental trap that Amazon controls all of retail and is pretty much unstoppable.

And it’s easy to think that, since consumer momentum is trending toward online purchasing, you need to shift all your attention there.

Well, even though Adobe projected online spending to increase to 1 out of every 6 consumer dollars in 2018 (representing 14.8% growth over 2017), that still means 5 out of every 6 dollars get spent in-store.

It’s true online spending grew at a faster rate and stole some market share from in-store purchasing. While online spending was projected to increase 14.8% over 2017, overall retail sales growth increased just 4.5%.

What Keeps Consumers Going In-Store?

Believe it or not, Millennials and Gen Z power the in-store charge. According to Phil Rist of Prosper Insights and Analytics, they enjoy the social aspects of shopping and the fact that it’s become a family tradition.

Kit Yarrow, a consumer psychologist at Golden Gate University, agrees. Part of her research has led her to actually talk to consumers waiting in long lines on Black Friday, for example.

Why would they wake up at 4 in the morning? To score an awesome deal?

Surprisingly – no!

Yarrow found that, after actually talking to people waiting in lines, they’re usually willing to do so because they’ve done just that since they were kids.

But, let’s get more specific than this. Because, after all, if you want to build such a habit in your customers, that’s going to take years (at least).

To be more exact, consumers love “Buy Online, Pick Up In-Store.” They know they won’t have to brave long lines. They know they’ll get exactly what they want. This holds true on Black Friday and (to a lesser extent) throughout the year.

Small independent retailers also raked in a record $17.8 billion on “Small Business Saturday.”

But it’s important to understand why. And in this case it’s because consumers are tired of big box stores who treat you like a number and offer no real customer service.

One retailer noted they allow you to drink alcohol while shopping. They also focus on products that you need to touch and feel to make a decision on. And the company, Lone Star Dry Goods, knows you when you first come in.

Which Elements Can You Replicate?

If you’re interested in growing your physical retail store, you clearly still have plenty of reason for hope.

It all comes down to what you can effectively do at scale. And only you can make the right decisions for your business.

What Makes Placon Such a Great Packaging Company?

Placon was founded in owner Tom Mohs’ basement in Madison, Wisconsin in 1966 when he built a small thermoforming machine and made the first plastic jewelry box.

These days, you hear about all those internet and tech companies founded in garages and apartments. But Placon happened before them all!

By 1970, the company enlisted Kodak as a client. In 1998, custom thermoformed packaging became available, and Gillette was enlisted as a client.

And now, more than 50 years later, founder Tom Mohs has been inducted into the Plastics Hall of Fame for his groundbreaking contributions to the industry.

So when you use the words “innovation” and “excellence” to describe Placon, they’re not used lightly!

But more practically speaking, what makes them such a big deal? This:

1. Custom and Stock Packaging Solutions

Clearly, Placon understands plastic packaging. Since they’ve been industry leaders over the past five decades, they have quite a range of stock for many applications.

But, you get by now that they can more than handle any packaging situation you throw their way. And that’s evidenced by awards they’ve won while making packaging for DuPont and Ameristar.

Anyway, they’ll work with you to create custom packaging solutions specially suited for your products.

2. Industry Specialization

While Placon can operate successfully with any company in any industry, they particularly focus on the retail, food, and medical markets. Placon’s custom packaging designs allow for the most attractive display of products in large chain retail stores.

Food retailers benefit from Placon’s packaging allowing their product to stay on the shelf as long as possible and look as attractive as can be. And, medical products manufacturers get packaging that maximizes revenue, reduces costs, and increases speed-to-market.

Finally, you can top all this off with an on-site state-of-the-art recycling facility. Used packaging gets washed and ground into rollstock, which then gets used to package new consumer goods.

So when it comes to plastic packaging, you’re in good hands with Placon, and that goes regardless of whether you use their stock or custom packaging. And we’re more than happy to recommend them when they make a good fit for your company.

When It Comes to Commercial Vacuums, We’re Big Fans of Sanitaire

Sanitaire brands itself as “The Ultimate Time Machine.”

…Wait a minute! What?

Are you in the middle of a sci-fi novel here?

Well, no. But what happens during the day at your building? Early in the morning, before customers and employees arrive in droves, you have a nearly pristine space.

By the end of the day, your building may look like the aftermath of an EF5 tornado with winds exceeding 200 mph.

That’s where Sanitaire vacuums “take you back in time.” Your building goes from near-devastation back to that spotless cleanliness you saw in the morning.

And here’s how Sanitaire makes that happen:

1. Every Product Fits 5 Main Brand Pillars

Sanitaire doesn’t mess around when it comes to their commercial vacuums. Every vacuum they make must meet the strict criteria of each of these five pillars:

  • Deliver an exceptional cleaning experience by meeting LEED and CRI certification standards
  • QuietClean, which means every vacuum operates at 70 decibels or less
  • Make your cleaning team happy with convenient features like light weight, cushioned harnesses, and easy maneuverability
  • Reliability, which means efficient use of cleaning time
  • Minimal maintenance and innovative features, which mean equipment costs stay low and let your business keep running

2. Industry Specialization

Sanitaire doesn’t just make “commercial vacuums.” They make vacuums specifically for several industries to meet tight requirements and maximize business value.

For example, for the medical industry, the SC3700A includes a brush and crevice tool for detailed cleaning. The vacuum also includes a brush that allows for cleaning of hard and soft surfaces.

For hard surfaces in a general office space, the Floor Machine SC6025D comes with steel housing, twin-motor capacitors, and a three-idler gear box for powerful and efficient cleaning at 175 RPM. And your cleaning team won’t complain about the machine because it includes triple-planetary action to reduce vibration and increase comfort while cleaning.

And finally, for the hospitality industry, the RESTORE Carpet Extractor SC6088B offers 100 PSI of water pressure (with optional heating) to quickly and easily remove floor stains. Large easy-roll wheels and carrying handle make it easy for employees to clean anywhere in your hotel.

So, as you can see, Sanitaire understands these industries (and others not mentioned). And you can bet that you can trust them 100% with your commercial cleaning needs.

That’s why we’re happy to recommend their products to you when it makes sense for your needs!

Where to Invest Your Holiday Sales Profit

This holiday sales season’s revenues were the best ever, according to Statistia.

US retailers raked in a cool $719.17 billion in 2018 versus $687.87 billion in 2018 – a 4.55% increase.

So, you’re probably sitting on a nice chunk o’ cash at this moment. And even though the stock market’s experienced some uncertainty lately, forecasts show the American economy (and consumer spending) will remain strong for the foreseeable future.

What do you do with all that cash?

Here’s some ideas based on data:

1. Use Technology to Showcase Your Product’s Relevance to Customer Needs

Millennials now represent more than $200 billion in spending power and will overtake Baby Boomers as the generation with the most money available.

They’re not big on hype-style marketing. But they do want you to use technology to display how your products meet their needs when they shop in-store.

And ⅔ of all Millennials shop in-store every week, says Retail Dive.

So, how can you meet their needs?

2. Focus on the Growing Health & Wellness Market

Weight Watchers will rebrand itself as just “WW.” This reflects their focus on health and wellness in general, and not just weight.

What? You don’t own products focused on health and wellness?

Well then, how can you tie your existing products to that industry?

For example, Kroger created a mobile app that allows you to evaluate the healthiness of their food products. The app assigns a score.

You might be able to simply show in your marketing the health benefits your product offers.

3. Optimize Supply Chain Efficiency

Has this one ever not been a challenge?

2019 brings additional difficulties to this. One is President Trump’s raised tariffs on certain goods imported from China.

And two is the trucker shortage, which is estimated to be around 50,000 or so.

What can you do about these problems in your own supply chain?

4. Raise the Market’s Perception of Your Product’s Value

Price is really arbitrary when it comes to your products. If consumers see the value in your product, they will pay more.

So, how can you understand their needs better than before, and then communicate in your marketing how your products meet their needs?

That’s a gross oversimplification of marketing. But, the more effectively you can meet a market’s perceived needs by solving their top problems, and the better you do it than your competitors, the more valuable you become.

Just ask Apple.

So, those are some of the top places to invest your holiday profits for more business growth in 2019 and beyond.

How to Make Employee Turnover a Problem of the Past

You’ve certainly experienced high turnover at the least convenient time. It happens with every retailer.

But, you can certainly minimize this problem and make it one that rarely happens at your store.

You may feel tempted to rationalize,”Well, that’s how we save money. We pay a certain rate. And if an employee doesn’t work out, we simply find someone else.”

That works now as a short-term reactive approach. But, what are the long-term costs of such decision-making?

It’s kinda like putting a Band-Aid on a broken leg.

Case in point: Costco pays its average employee $20.89 versus Walmart’s $11.83, reports Business Insider.

But, that’s not the main point.

Costco’s sales per employee run double that of Walmart’s. And Costco can afford to do this because of that, and also because it runs a much leaner warehouse than Walmart, which leads to far lower overhead costs.

And then, to top it off, while Walmart and Target have struggled with a lull in sales in recent quarters, Costco continues to report strong sales results.

So, it simply makes sense: paying employees more leads to attracting happier workers who do a better job and make your customers ecstatic so they can’t wait to come back.

But it’s not all about money. Money is simply a way of doing this:

showing your employees you care about them and that they’re important to you as people.

And here’s what to do to make turnover a minimum:

1. Hire For Attitude

Finding an employee with the right skills, experience, and talent is easy. You’ll have plenty of highly qualified candidates.

When you interview, focus on attitude. Is your employee a self-starter? Do they take responsibility for their actions or blame others? Do they have a team-first or me-first attitude?

Do they want to learn or do they already know everything?

It’s clear what qualities you want. The challenging part lies in judging what the candidate’s true character really is.

2. Work with Employees to Tailor Their Jobs To What They Like to Do

No job is 100% perfect. Every job has its grind or drudgery. But to the maximum extent possible, keep your employees doing what they enjoy and excel at.

For example, if you have someone in sales constantly covering the cash registers, redistribute labor so they spend more of their time on the floor interacting with customers. Keep people who enjoy the cash registers working that position, or hire more workers to cover times of shortage.

Use this attitude for all employees at all levels of your organization.

3. Pay Well Above Industry Standard

Yep. Money’s a part of showing your appreciation and reducing turnover too. It just can’t be the only thing you focus on because employees value other rewards (praise or increased responsibility) too.

But, if you want to keep the best for a long time, you do have to pay them well. And that includes everyone – from the C-Level down to the janitors.

Include your perks in this. Some companies have nap rooms, on-site daycare, flex time, or free gym memberships.

Work with your employees to create a perk package that’s attractive to them.

Turnover never has to be a crisis. If it’s gone to that level at your company, you’re not getting something right.

So consider these tips, and work with your employees to create a workplace they’d never want to leave.

Top 4 Areas of Inefficiency in Retail in 2019

Do you know where you struggle with the greatest inefficiency in your retail operations?

Behind the scenes, retail’s brutally difficult. You have so many people and processes to manage. It’s no wonder you have at least some operational inefficiency.

If you’re not sure where you struggle because you’re already overwhelmed, these are some of the top areas to analyze:

1. Paper-Based Processes Slow Everything Down

Paper is your enemy. Always. You need to work to eliminate its use from your operations to the greatest extent possible.

Most retail professionals still do physical paperwork when performing in-store visits. This requires extra preparation, and if you forget the form you need, the entire trip can become a waste.

Then, these forms have to be manually stored and analyzed, which consumes even more precious time and labor. And as you’d expect, errors increase.

So, how can you transition all your paper-based tasks to digital ones?

2. Planogram Management

You know your planograms take a lot of time. Unfortunately, much of that time is involved in compliance. Then, to top it off, you don’t actually have the data to understand how consumers purchase, given the layout of your planogram.

How can you take more of the manual labor burden off of the processes involved with your planogram?

How can you implement smoother, more accurate methods for gathering purchasing data so you know exactly how to strategize to increase future sales?

As-is, most retailers unfortunately can’t gather this information in time to make wise business decisions. They’re caught in a reactive cycle.

3. Communication

As you scale your retail operations, communicating becomes extremely difficult. Traditional email doesn’t cut it because you have more complex teams and will need to keep records to account for compliance issues. This also affects your ability to keep employees accountable for their actions.

Finally, this also affects your reporting and ability to achieve your goals.

Near-field communications (NFC) can be used to make communication far easier to implement and track.

4. Implementing Sustainability

Customers want to see this from every business. But due to the complexity of managing retail operations, it’s difficult to implement.

Nonetheless, you must find a way to do it because customers avoid retailers who don’t value sustainability as much as they would like.

So, how can you identify ways (even if seemingly small) in which you can advertise that you use sustainable business practices?

Remember, eliminating paper makes you a more sustainable company. So, the more you improve your operations in general, the more likely you increase your sustainability also.

Efficiency in all aspects of retail is a key contributor to success. Analyze these areas in-depth to see how you’re doing and find the greatest areas for improvement.

Top 4 Strategies for Marketing Your Physical Store

Only 30.1% of holiday sales happened online during the 2017 holiday season says the National Retail Federation.

With the way the retail sales situation appears, it seems as though the number would be much higher.

So, that means 70% of retail sales still happen offline in stores.

How do you increase your market share versus the competition?

Here’s a few ideas to try out in 2019:

1. Give Customers a Reason to Go In-Store

Why should your customers go in-store versus shopping online? You might hold an exclusive event. You may advertise online that you can only purchase certain items in-store. And you might offer coupons that only work in-store.

You could also offer a sensual experience. For example, if you sell scented products, you make sure a pleasing aroma circulates throughout your entire store, which makes it much easier for customers to remember.

2. Add a Genuine Sense of Urgency

What products can you make available in limited editions or for limited times? That’s a little easier to strategize around Christmas during the fourth quarter.

And how can you offer gift sets, collectible pieces, or even a cross-brand collaboration?

In your advertising, make it clear what you offer is available for a limited time only. Communicate a hard deadline so customers know exactly when they have to act.

And then follow through and don’t offer those limited editions or sets again until next year.

3. Implement Customer Loyalty Programs

Forget about offering one-time sales and deals. That attracts customers who come for the sale and never return again.

Instead, add in a customer loyalty program. Offer points and discounts for continued purchasing over the long haul.

Do these programs take some time and money to set up?

Yes. But they pay off well over the years ahead.

4. Add a Subscription Service

Similar to loyalty programs, these keep customers coming back to you for years ahead.

How could you offer a customer something they need monthly for a fee?

For example, a pet store might send bundles with new products for cats and dogs each month. Maybe you include a free small gift with a customer’s regular monthly order.

Or, maybe you send your customers a surprise beer or wine each month.

This applies in every niche. Research examples online, or test out your own.

Physical stores will always remain in demand. Those who differentiate and offer a unique experience will stay in business, regardless of market conditions.

Paragon Films Turns Stretch Film into a Fascinating and Unbeatable Niche Product

You know the value of a niche specialist, right? The last thing you want is a generic company that “does it all.”

Because, you know that niche specialists get you better outcomes and quality. They offer the product or service you want all the time. So, they know which mistakes not to make because they’ve made them already. And that saves you time and increases your profitability.

Well, Paragon Films does stretch film and stretch film only!

They’ve got stretch film down to a science. That means better product quality and more time and money saved for you.

In specific, here’s what makes them such a big deal:

1. Products Highly Developed for Various Applications

Regardless of what you need stretch film for, Paragon has the perfect film for it. We can’t go over all the stretch films available. But we can talk about a few to give you an idea of the diversity of product available.

Nexus is Paragon’s toughest stretch film for wrapping by machine. It will contain and control your load no matter what. And it has almost unbelievable puncture resistance.

Torque is one of Paragon’s leading stretch films that gets wrapped manually by hand. It has a thin gauge to reduce consumption and costs. However, it comes with folded edges to give you added strength and to reduce the possibility of tearing.

Finally, Paragon’s PET film has been designed specifically for wrapping containers. PET, or polyethylene resin, has low cling properties so it sticks to itself, but not the metal or plastic containers you’re wrapping.

2. Stretch Film for Extreme Temperatures

Okay, Paragon has such highly specialized products that we just had to mention this one too. Cold Force, as its name suggests, works especially well in extremely cold temperatures.

High puncture resistance and load retention, along with great clarity, make this the perfect film if you have to wrap products that must be in the cold.

The bottom line is that Paragon’s stretch film, regardless of the type you choose, easily outperforms that of the competition in all categories.

You’ll save money while still being able to easily control the loads you need wrapped.

And we’re happy to recommend Paragon when they make sense for your needs.

Why The Packaging Wholesalers Are a Can’t-Miss

This is the first packaging company we’ve profiled from our President’s Club supplier partners.

And they’re a phenomenal one.

Founded in 2001 as “JIT Packaging,” the Packaging Wholesalers has now grown to a total of four locations across the country and nearly 1.5 million square feet of warehouse space.

So no matter where you’re located, they can quickly get you the packaging supplies you need. The company currently has warehouses in Hazleton, PA, Elgin, IL, Dallas, and Atlanta.

With benefits like a matching 401K contribution of 4% and free life insurance, The Packaging Wholesalers understands how to treat their employees so you get the best service.

What’s the big deal about this company? Here’s what:

1. Niche Specialists

Owner Mike Hrbacek has more than 30 years of experience working in packaging distribution. And nearly all of that comes as an owner and operator of his own company. He opened his own packaging distribution business after just one year as an employee with another company.

Plus, since the company only focuses on packing supplies, you know they know what they’re doing.

2. Focused Product Selection Yields Higher Quality

A quick review of the categories of shipping supplies available from The Packaging Wholesalers reveals just 21 different product categories.

At first, that seems small. However, it allows the company to focus on providing the highest-quality products so you don’t have to worry about products breaking or tearing before they should (and other quality issues).

3. Reduced-Price Product

For whatever reason, some packaging supplies don’t move as quickly as anticipated. It happens in every business.

And the Packaging Wholesalers passes the savings on to you by offering closeout specials.

4. Rapid Delivery Times

Distributor’s top complaint with other packaging suppliers was that they often had to quote their customers weeks to deliver their shipments.

The Packaging Wholesalers puts that discussion to an end. They’ve integrated FedEx seamlessly into their quoted delivery times, and you can count on getting your packing supplies in just days.

Combined with a lightning-fast website that allows you to quickly navigate and buy, and you have a recipe for unmatched service.

So, if you need packaging supplies and want them delivered in tight timeframes, we wholeheartedly recommend The Packaging Wholesalers.

They just can’t be beat.

3 Examples of Hard-to-Beat Competitive Advantages from Leading US Retailers

It’s tough to get the top in business. But somehow, a handful of companies always manage to outshine the others.

You may not be in position to dominate the market like some of these retailers. But, you can learn from their examples and use that to expand your leadership in your niche or inspire new strategies.

Here’s what some of the big guys do:

1. Wal-Mart’s Supply Chain

One of the many advantages of Wal-Mart’s supply chain management lies in how they work directly with manufacturers. Back in their early days, this was unusual.

Today, Wal-Mart has a policy of “Vendor Managed Inventory,” which means manufacturers manage their own product while it sits in Wal-Mart’s warehouses.

They also use “cross-docking,” which is the practice of moving product directly from an inbound truck trailer to an outbound one without any storage in-between. This reduces operational costs a ton, which Wal-Mart then uses to pass on lower prices to customers.

2. Costco’s Savings and Value-Based Experience

Costco makes around 75% of its profit off membership fees. Different membership types cost $55 – $110.

Why will customers pay this?

They make that money back, assuming they shop at Costco enough. Costco has a partnership with Visa that offers a card which gives customers money back when purchasing. And if they shop just a reasonable amount, customers make back their membership fee throughout the year.

To encourage buying, Costco is extremely fussy about their vendors and product quality. They also sell in bulk. Consumers don’t shop at Costco because of the cheapest price. They want both quality and low prices.

3. Kroger’s Private Label Brands

Costco sneaks some of its store brands into customer’s hands too. Kroger takes a more strategic approach to creating its own brands.

The Private Selection, Banner brand, and Kroger Value target high, middle, and low-income customers.

These brands wow customers because they don’t contain preservatives and additives found in competing brands. At the same time, they’re equal in quality to other name brands.

Then, Kroger also uses their private label brands to access different customer segments. For example, they may offer an organic version of a certain food.

About 28.2% of Kroger’s sales came from their own store brands.

So, what did you learn from those examples? Will you completely transform your company’s strategy?

Or, have you identified incremental changes that could help you dominate the market without your competition even noticing?

2018 Retail Sales Projections

With record-low unemployment in the US and consumer confidence at high levels, everything’s looking good for the 2018 retail holiday sales season.

Just how good?

About 5.0 – 5.6% better than last year, which equates to around $1.1 trillion in sales, according to Deloitte.

Their forecast says you should do especially well if you have a “distinctive value proposition.” “Off-price” products will continue to do well. And they believe luxury items should see a rebound.

E-commerce sales will rise 22% through the holidays, compared to just 16.6% from November to January of last year.

And here’s some of the growing trends powering this rise in sales:

1. Shoppers Will Buy More on Mobile Devices than Any Other

This is actually an industry first for all retail holiday seasons. An article at ZDNet notes:

  • 46% of all online orders will happen on smartphones
  • 68% of all consumer traffic will happen by smartphone
  • The total traffic for smartphones will eclipse that of all online traffic for all types of devices in 2015
  • 83% of 18-44-year-olds will use their smartphone in-store

So, what can you do to make sure mobile plays a huge role in your retail holiday sales strategy?

2. AI-Recommended Products Will Drive 35% of All Sales

You know how you’ll see that “People who bought item X also bought,” on many e-commerce sites?

Those recommendations come from AI. Some systems are more sophisticated than others.

You can even see these on websites for quite small businesses.

The article at ZDNet claims this will be a huge trend powering sales growth.

And it makes logical sense as to why.

So, how can you incorporate that into your sales strategy? And, what can you do to make sure it’s more effective than in the past?

3. Video Will Continue to Dominate the Advertising Market

If you’re going to advertise online, where should you do it?

Through video.

2017 saw an astounding 1400% increase in ad requests via video over the previous year. For non-video mobile ad requests, growth was still great, but much smaller (at 200%).

About 80% of brands will increase their video advertising spend in 2018.

It’s definitely worth your time to add video to your marketing strategy, or to increase your budget for it.

That’s what you can expect to see this Holiday Season. So, which trends will you focus on to grow your sales this year?

Orora acquires Pollock Packaging – a market leading Texan packaging and facility supplies business

Orora Limited announced today that it has acquired Pollock Packaging.

29 November 2018

Orora Limited (ASX:ORA) announced today that it has acquired Pollock Packaging (Pollock) for USD$80.5 million (approximately AUD$110 million). The acquisition represents a multiple of 8.7 times trailing earnings before interest, tax, depreciation and amortisation (EBITDA).

Pollock is a market leading provider of packaging and facility supplies, headquartered in Texas, America’s second largest and fastest growing state economy. In addition to 6 distribution centres located throughout Texas, Pollock has distribution centres in Georgia, North Carolina, New Jersey and California. The Company has been in operation for 100 years and predominantly serves the industrial, retail and facility supplies market segments, employing more than 440 people and generating revenues in excess of USD$260 million (AUD$355 million).

The addition of Pollock to the Orora Packaging Solutions (OPS) business in North America, increases OPS’s geographic presence across several states and enhances the existing customer offering, particularly in the growing facility supplies market segment. Pollock also operates a corrugated box manufacturing plant and in-house packaging design service in Dallas, Texas.

Orora Managing Director and CEO, Nigel Garrard said, “The addition of Pollock to OPS’s business provides a scale platform to leverage the capability and customer reach of both businesses to continue to drive sales growth with existing and new customers.”

“In addition to a strong core packaging solutions offering, Pollock brings a well-established facilities supplies business that will give OPS the platform it needs to expand in this key market segment and Pollock’s customer base will benefit from access to OPS’s broader supply portfolio and geographic footprint.

“The Pollock management team has a strong track record of proven performance and will remain with the business to support integration of the two businesses and delivery of anticipated synergies.

“Pollock aligns with Orora’s stated returns focussed approach to allocating capital, as was the case with the acquisition of Bronco Packaging in August 2018,” Mr Garrard said.

Orora Limited