Canada's business magazine for traditional natural health retailers

Deane Parkes is an advisor, educator and creator of consumer demand to the natural product industry.  He gives seminars, consults to retailers and suppliers, develops sales and marketing stategies, and assists in business leadership development through his company Act Natural Corporation - Free Range Thinking.  Contact him at...

Deane Parkes is an advisor, educator and creator of consumer demand to the natural product industry.  He gives seminars, consults to retailers and suppliers, develops sales and marketing stategies, and assists in business leadership development through his company Act Natural Corporation - Free Range Thinking.  Contact him at deane@deaneparkes.com.

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Are you focused on inventory or selling

inventory or sellingAre you more focused on purchasing and inventory control than selling or merchandising?  One of the biggest improvements in health food retailing is the lower costs of software programs to manage and ‘control’ inventory.  Prior to having a proper inventory management system, one of the biggest challenges for retailers was having dead stock on the shelves and not being able to easily identify what stock was moving.

Since the 90s, I have preached the ’90-day rule’ of inventory management:  make sure at least one bottle is sold in 90 days from all stock on shelves.

Most stores without a good inventory management system often have 25 per cent plus dead stock, which means not ONE bottle has sold in the past 90 days.  So if you have $100K invested in inventory, $25K is wasted dollars on the shelf!

Now with the new technology, you can run a report daily or monthly, showing inventory movement. No product should be on the shelves for over 90 days. I know one store gets rid of the bottom 20 per cent slow sellers each month, and another store works to have 30 day turns, not 90!

As more retailers upgrade their systems to manage inventory, this will mean less product dollars tied up in slow moving items.  It will also make it easier for retailers to clean up shelves of dead stock.  As the algorithms track the movement of all inventory, I believe we will start seeing less product/brand selection offered in the stores with the focus on the products that sell consistently, exclusive to their business with strong vendor support (like mass market).

Suppliers may find retailers ordering less, more often or discontinuing brands that do not bring value and sell at shelf level.  Inventory management is vital to the success and profitability of a retail store so I understand why retailers have embraced and are focused on inventory management. 

However, what I am noticing is more attention being given to managing inventory turns than given to training floor staff on how to sell, serve customers and merchandise.  Of everything you do to influence your sales, number one must be customer service and number two is merchandising.

Hopefully as you continually improve the ability to manage each sku on the shelf, you are also making a similar – if not greater – effort to train the floor staff on exceptional customer service and merchandising or you just may find managing inventory becomes easier as you will not be selling as much.

Feelings, nothing more than feelings

The feeling a customer has when they walk out the door, hang up the phone, leave your website, visit your Facebook page, see your flyer, follow your tweets or Instagram determines whether they will come back to the store or follow your social media platforms.

Customer service is all about feeling.  We remember some of what we hear or see, yet recall 100 per cent of how we feel after any family, social or business interaction.

Do people feel like doing business with you and if so, do they feel like coming back? 

Watch for GMO ingredients

Meatless does not mean good for every body, human or planet!  GMO farmers must be doing a happy dance as veganism sweeps the shelves of natural and conventional grocery stores.

The food marketers for these large food producers are creating packaging that looks natural, organic and sustainable but a further look at the label often reveals ingredients full of GMOs, high fructose corn syrup, canola oil, soy or sugar beet - the four main genetically engineered crops.

Watch for GMO ingredients

It is becoming harder for conscious consumers to choose non-GMO food, even in health food stores, as food suppliers with profit as the main driver, find ways to hide and mislabel products to keep consumers confused and uncertain of where their food is coming from.

Follow and support activist Rachel Parent (kidsrighttoknow.com;@RachelsNews), as she continues her mission to convince Health Canada to properly label foods containing genetically altered ingredients or the new CRISP-R technology. 

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Conversations with customers

conversations with customersI believe the selling process comes down to having conversations with customers, to help guide them toward a healthier lifestyle. 

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Women serving women

women serving womenSeventy five per cent of health decisions are made by women.  This according to Faith Popcorn, author of Power of the Purse.  I’ll add this: 90 per cent of people who serve customers in natural food stores are also women.

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219 Hits

Fail to win

fail to winFailure is the quickest way to success. The faster you fail and learn from your failures, the faster you will determine a way to succeed.

Thomas Edison is a classic example. When he was asked if he was discouraged after attempting thousands of times to invent the light bulb, he replied “No, I am thousands of times closer to making it work.” Passion with persistence overcomes the fear of failure.

A recent study made to fail.  There were three groups

 

1. Business people

2 .Engineers

3. Kindergarteners

Each group was given spaghetti, marshmallows and duct tape. The objective was to build the highest structure to hold marshmallows.

They had 15 minutes to discuss among each other and 18 minutes to build. The kids won. The engineers came in at a close second and the business folks came in at a distant last.

Why did kids win over educated, experienced adults? Kids started immediately putting it together, failing over and over, until they got it. The engineers took some time to discuss but then started failing. Meanwhile, the business folks sat around discussing it so by the time they started, it was too late to learn from their mistakes, leaving them far behind.

So perhaps instead of sitting around ad infinitum in a “bored” room with the management teams discussing the annual sales plans, strategic initiatives, sales marketing objectives, competitor’s activities, budgeting proposals, and appeasing the bean counters so no one looks bad - Just Do It!!!

Listen up!

The ability to listen has been proven to build trust, lower sales resistance, build self-esteem and heal. A feeling of trust is the key to long-term customer engagement. But how do you listen? When a customer is speaking, make sure the spotlight is on them, not you.

Questions combined with active listening increases sales and customer retention. Ask questions to clarify the need of the customer. For example: “Do you want a therapeutic or preventative strength natural medicine? Have you been on a cleanse before? Have you used XYZ? Are you on medication?”

These types of questions help you quickly identify an effective choice so the customer is satisfied with results. It also gets the customer speaking, which allows you to listen attentively, creating an energy of trust and respect. With mindful practice to listen better, you will notice positive results in your personal relationships, and in your overall wellbeing.

I understand in today’s high-traffic stores, engaging customers is becoming less and less possible. Yet it is the foundation of our industry – to share the unique benefits of the products we sell.

Look how difficult it is to keep up with all the new products on the market with a wide variety of ingredients from all over the globe. Is it organic, free trade, non-GMO, ethical, gluten-free, grass fed, vegan, paleo, local, etc….

The “interNUT” is full of nonsense on natural heath products which as you know brings in customers with all sorts of ‘ideas’ about natural health. Some sound whacky and some are intentionally created to deceive.

Most stores have well-trained staff with accredited nutritional expertise to help guide the consumer to make a good choice within the ever expanding natural lifestyle movement. Yet sharing knowledge is not the best way to build trust.

The words you use during a conversation with the customer have little effect on building trust or engagement. Some studies suggest only a seven per cent effect.   Your tone of voice and body language speak far louder than words of nutritional advice in building long-term customer relationships.

In Whatever Arises Love That by Matt Kahn, he has these loving words on listening: “When human interactions become a way of practicing self-acceptance by treating others with more patience, kindness, and respect, a constant need to be heard drifts into listening as an act of love”.

I believe the business that listens best will become the trusted voice of natural health in the local buying community.

   Happy sales!

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The Recommender

Perhaps the most important role in natural retailing is the role of the recommender... the person who helps choose which product will bring the greatest benefit and value to the end user, the consumer.

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1183 Hits

The Core Shopper

I believe the core shoppers of health food stores amount to about 15 per cent of Canadians.  The core shoppers are fully engaged with the natural health food store lifestyle.

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1299 Hits

Sales. profit, inventory

The three key areas to focus on in order to thrive are sales, profit and inventory.  Sales is generally the first focus of a business because without sales, there is no business. 

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1418 Hits

Lead with your heart, manage with your head.

Lead with your heart, manage with your head.

While shopping at my local health food store not so long ago, I struck up a conversation with a fairly shy young woman about what she was demoing. 

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Be the Oz effect

Be the Oz effect

Hearing the ‘Oz’ effect has slowed which has had some impact on overall sales. The Federal Trade Commission (FTC) put him in his place!

So where did the Ozites go? Back to the land of OZ? Not quite…they went back to their cozy homes in your community, the eight miles around your store where 80 per cent of your business comes from. (One retailer said he walked the eight mile radius to get a real perspective of his business community.  Good idea!)

The Oz effect is based on basic marketing of natural health products 101 – sell the solution, NOT the product. He was able to do it on the strongest branding media - TV.

I have heard Oz does not bring in ‘our kind of customers.’ However, with a potential of purchasing $50,000 in their lifetime of natural products, I’d sure be trying everything to get them into ‘our kind’ of lifestyle.

As a retailer, I always included in the budget to run a monthly ‘advertorial’ style, solution-based article in the local community paper.  Print still works to bring in new customers while the advertorial positions your store as a solution-based resource for their health.

Other retailers have had success with their own radio show, with some retailers having become local celebrities with their shows.

TV is often not in the budget but if possible, it may be a good place to run ads during the Oz show.

Remember when using your co-op dollars to not spend it all on discount price flyers.  Make sure to build your brand on solutions as well.  No one complained about the price of raspberry ketones. They were just upset if we did not have stock.

Natural health resource center…

Quite a few people have told me recently how customers come in for answers to their health questions, then leave to buy product elsewhere.  I know this is tough.  However, it does show that you are seen as ‘the’ natural health resource in your community.  Do not take that position lightly.  Play it up.  Make sure they leave with solution literature on a product or service only you sell. 

Be the Oz.

The recommenders – it never ceases to amaze me the dedication, care and quality of people who work in the health food stores. Many of you have worked in the same store serving customers for 10, 15, 20 or more years. Think of all the lives you have changed…think of how many more in your community could benefit from the solutions you sell…be the Oz.

The two ads included are an example of the kind of advertising that built multi-billion dollar corporations.  These would be highly illegal today, yet the billions made on deceptive advertising created an epidemic of diabetes, heart disease and obesity.   Now, some of these mega corporations control most of the organic packaged goods business.  Sorry, but I always find this stuff interesting, although twisted.

What is a BILLION DOLLARS?

If a million dollars weighed 20 pounds, a billion dollars would weigh 20,000 pounds.   Let’s say a supplier to health stores does $10 million/year or 200 pounds of business, statin drugs ALONE do over $20 billion in business or 400,000 pounds of business!  One company that makes statins and other suspect remedies does four million pounds of business!!

With that kind of poundage, you can create major Oz effects to the point medical doctors think everyone should be on statins from birth, …like COLA…and do it in a VERY convincing manner.  Take them or you will die…and they believe it, as the doctors also thought cigarettes were healthy…why?...because a sales rep told them.  The College of Physicians needs a wakeup call!

 Margin of error

Instead of only finding ways to increase sales, make sure you are always looking for ways to increase margin. One per cent on a million dollars is $10,000, which goes a long way to covering expenses.  I understand price is being driven down as NHPs are sold everywhere and becoming more commoditized.  I suggest you brain storm with each department on how to raise margins while maintaining sustainable sales growth.  Perhaps have a contest between departments on who can raise margin the most while maintaining sales. Your margin is vital to the sustainability of your business.  Keep the focus on raising and maintaining margin as much as you do on sales!   Happy sales…• 

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CNHR News Podcast

cnhr radio hour

News, Views and Happenings in the world of Canadian Natural Health.

Check out this month's podcast here

CHFA West Preview

Build Your Brand through CNHR Magazine • Include CNHR in your branding strategy 

What's in the Jan-Feb issue:

  • • CHFA West Show Preview
  • • Alberta store features
  • • Wrap-Up of HFN AGM
  • • Amazing business columnists

Get into the hands of 10,000+ retailers

Reach 10,000+ natural health store professionals via CNHR Magazine.  CNHR is delivered by Canada Post six times per year to virtually every health food store across Canada.  Retailers are your true sales force.  So, get your product into more stores and get them selling for you.  

Remember, your first sale is to the retailers.  CNHR can get your message in front of them. Connect with the retailers who sell and recommend your product.

Put CNHR’s many resources to work for you:

Display ads, Product Profiles, Trade Talk news in CNHR Magazine along with Facebook, CNHR web page, 

podcasts, inserts, videos posted to our website, sending product samples to stores…we have the access to Canada’s natural health retailers.  Put our many resources to work for your company and products today.

CNHR is your Trade Media source.  We’re more than CNHR Magazine.  That is just part of what we do.  

We are keeping the industry informed and updated through the magazine, the CNHR Website, our Facebook Page, the CNHR Podcast and our industry e-blasts.  Ask me about all we can do to connect you to the industry and give you blanket coverage across Canada.  Let me help put all of CNHR’s resources to work for you!

Contact:  Katherine Stevens:  kstevens@cnhr.ca   647/975-3370         Contact:  Candace Sicari:  candace@cnhr.ca   705/209-9280

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