The roller-coaster ride the banking industry and the stock market have taken over the last 2 weeks gives cause for Bill McCurry to share his thoughts in blog style.

The phone's been ringing the last couple of weeks. Email is coming in. Thank you to everyone who has asked for thoughts on "Where to this Fall Season?".

To those who were hesitant to call/email, let me ask you to please contact me. Staying in touch with "real" people who are out there in the trenches everyday keeps me current with our industry. Don't hesitate to ask a question or offer an idea. We all learn from each other.

Tuesday night was the NY/NJ PMA Division Business Improvement Expo. Attendance was very good and the conversation was buzzing with lots of questions and ideas from retailers and suppliers.

So, some thoughts in response to the most common questions:

Where is this very important Fall Season going?

What would Bill McCurry do if he still had retail stores?

Here goes a synopsis of those conversations/emails . . . not a blog but more of a blathering . . Chicken Little was wrong, the sky is not falling. That doesn't mean there aren't some scary things out there. Let's look at things in a logical way for a moment. A media driven hysteria sells papers and keeps people glued to the tube/computer for news. It sucks for retail but is good for ratings. So, where do we go from here? If unemployment is at 6.1% that means that 93.9% of Americans have a job . . . Hmm, maybe we should consider selling to those 93.9% of the people who have paychecks.

Participation in recessions can be to some extent voluntary. If you keep cutting back and cutting back you will cut yourself back to oblivion. Let's not go all Pollyanna here though, and be unrealistic while we run out of cash and crash. There is a happy medium.

Most imaging retailers reported September '08 as being "suck month" with October being slightly better. Mark Leonard of Dodd Camera brought a bit of reality to the picture by reminding us, "It's not an excuse, but it's an asterisk on the calendar. September of 07 we had the availability of Canon 40D's and there was pent up demand for a higher price unit that flew off the shelves. That boosted September '07 and we didn't have that in September '08."

Mark's the only one who mentioned that. That shows how smart Mark is as a retailer. He's looking back to see what worked while he plans what he's going to do going forward.

Credibility and Empathy are important . . . . Some people are suffering economically. Others are not really suffering but feel they are suffering or worse, feel they should be suffering. This concept isn't without controversy. . . If McCurry's was still in retail, I would probably price the top 25 selling cameras right in the dirt with the best "street prices"

Customers are more knowledgeable than ever. They are checking prices before they come in. If they know the street price on the product and you meet or beat it, they will lower their defenses somewhat and will be more open to your suggestions about buying additional products, classes, services to enhance their product purchase. In essence, by matching the street price you've given yourself credibility in the customer's mind and you have given a bit of empathy to the pricing fear they came in with.

Once upon a time . . . we used to think that we could get $10 to $20 over street price because we were McCurry's - the specialty store - with the best customer service team in the world . . . We were worth it. I believed that then, I believe it now. The problem is the customer is being trained by media and experience to not believe it. So, a customer comes in and you show them your product and spend 15 minutes trying to convince them you're worth an extra $10 to $20. And you're good, you make a good case and the customer agrees to buy the camera. When you start talking about additional purchases, the customer is both weary and wary. They've just given you $20 for "nothing" and think they should be done spending money.

There are hundreds (thousands?) of cases where when you price at street price the customer is so relieved and trusting they will add on worthwhile products that represent hundreds of dollars of margin.

Take a trick from Best Buy. They sell printers for 8% - 15% margin. The cable to connect the printer costs them $3-$4 and they sell it for $29 or more.

The customer realizes the printer is a good deal so they just assume the cord is also . . . On printers below $200, Best Buy probably has more margin in the cable than in the printer. (What will Best Buy do when these printers all go wireless? Don't know, that's a different question for a different blog).

The point here - customers will be shopping this year. There will be a Christmas rush. No, it may not be a record setter, but Santa is still flying.

So be ready for your customer's inquiries and respond to what the mood of your customers will be.

There are those who say customers come into a specialty store expecting to pay more and we shouldn't disappoint them. I have historically believed that to be good policy.

For me, this year is a different year and I have to match or beat the customers' expectations on price of the popular items, making it up on the less price sensitive products

Now, before you run out to cut your price, stay abreast of where the market prices are. Steve Baker, one of NPD's most brilliant gurus told the New England PMA Tuesday night that margin destroying price cuts may not be so relevant this year.

Major retailers are worrying about profit. The theory some are talking about is that gaining sales at the cost of margin and profit may be self defeating and causing grief with shareholders. Steve held out the potential that some major retailers will be forced to not cut prices as deep because the gain in market share won't translate into additional volume. The lesson for specialty retailers is to stay flexible and nimble responding to changes in the market.

Steve also reminded the PMA audience that brand is important to buyers - and the brand of the store is part of the consumer's buying decision. "YOU are the brand" is Steve's message here.

Manufacturers are demanding big load in orders. Retailers said, "To be sure I have hard to get items and/or to get the bags of advertising money being thrown around, I must do a huge load-in order." Again, this won't be popular, but here's my reaction. Our friends at NPD (disclosure; NPD is a client of McCurry Associates) say in August '08 there were 719 point and shoot digital camera SKUs actually sold by more than two reporting retailers in the US. That means, a customer that looked at "all the options" had to investigate at least 719 camera models. How many of those are really "must have" models? My suggestion, pick and chose your battles. I know many PRO members/Affiliates who are ordering a moderate supply of products they think they have to have, then will reorder if they need them. If they can't get them they will fill in with the Olympus, Fuji or Panasonic models from the PRO warehouse. Their attitude is better to miss one sale than to end Christmas with a pile of unsold product and miss the cash to make payroll on January 1. Seems logical to me.

For the record, August saw 103 Digital SLR SKUs sold in the US. Again, which are the "have to haves?" and which can be substituted?

Will my bank be there when I need them? This question used to be would the bank be in place to loan you money when you need it. Now the first part of the question is, "Will the bank even be there?" Then the next question is "If you need cash, can you get it?"

Those are two different questions. Chances are your bank will still be there. Will they still love you is a different question.

Rule of thumb, don't surprise your banker. Call your accountant first. Ask the accountant their opinion of taking your latest financial statements to your banker and having a "just to tell you what we're doing" meeting. Just to touch base. Let the banker know you see them as an important part of your team. Keep them apprised of what you're doing. Ask what the banker's response would be if you miss your Christmas sales projections and need some cash to tide you over.

If they say they would loan you the money, get a written loan commitment today . . . It will be easier to get it today than it will be if you need it.

Oral promises from bankers aren't worth the paper they are written on. You have to have it in writing to be able to really count on it.

What can we do to survive and thrive this season? Point blank, you can't continually cut costs to infinitesimal profitability.

That isn't to say you shouldn't make some hard choices with personnel.

Two books I'd add to your recommended reading list - "Our Iceberg Is Melting" by John Kotter of Harvard fame - it's a bit of a "Who Moved My Cheese" format. It can help you and your team understand the urgency and steps to go through to make change happen.

The second book is from Stanford management guru Robert Sutton under the less than sophisticated title, "The No Asshole Rule". Sutton's premise is there are toxic people that will do an organization more damage than good and how to deal with them. While the title isn't polite, the book is right on target and should be required reading for all business people.

This doesn't mean you can read these books and not take action - they've got tools to help you take the action you have to embrace. You know your business better than anyone. So do what you know you have to do, even if it is unpleasant and something you don't want to do.

Buying Groups - Yes, I'm talking about it again.

I finally said it to someone.

When asked why a retailer doesn't join a buying group, my late-night answer was they were either naïve or stupid.

(Disclosure: PRO is a client of McCurry Associates and McCurry Associates has done work/spoken for IPI). What totally dumped me over was that a significant retailer told me Tuesday night he took the quarterly rebate he got from PRO at the convention this July and bought a BMW for his wife with it. It was all "found money because of PRO. I thought I was buying good before PRO, Wow! What a difference."

When I asked what his plans were for the upcoming season, he said, somewhat misunderstanding the question, "This quarter's check should be bigger and I'm thinking of getting a BMW for my daughter in college."

It's illogical that a single store can buy better than a group. I've been around PRO for 35 years and IPI for at least 15 . . . Never met anyone who could do better outside the group than inside. If you're having trouble with this concept, call me.

Please send us your marketing idea as well as comments on those ideas posted by hitting your reply button or emailing to editor@mccurryassoc.com. You may offer free subscriptions to your colleagues by sending them this link: http://photoimagenews.com/mccurry.htm

Please Enjoy, Consider and Profit from these ideas. All the Best, Bill

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