Business Insight
By Alan Miklofsky
P
ossibly, you may have heard the
stories of some independent shoe
stores closing their doors, especially
one-store operators. Often, the
"retiring" owner is interviewed by the local
newspaper and invariably the stated reasons
for their store's demise include: "the economy,"
"can't compete against the internet," or
"impossible to compete directly against
my vendors." In some instances, these are
not the real reasons for the store's closure.
Any shoe store needs a steady stream of
customers to survive. Customer Attrition is a
fact of business. Customers move, customers
are attracted to other retailers, customers are
fickle. My theory is that a failed business is
run by an owner/operator who is ultimately
responsible for allowing customers to flee to
other retailers without replacing them. As
part of the equation the failing retailer is
oen also responsible for not maximizing
the customer experience in his store. He can
blame it on the economy or blame it on the
vendor, but more oen than not, he needs
to place the blame on himself.
If you lose too many customers,
your business is lost!
e retail business is a grow or die business.
e business has a need to grow (usually
referring to increased volume) or it is headed
south. Since Operating Profits are measured
by subtracting Total Expenses from Gross
Profit Dollars, business growth can be viewed
as increases to Operating Income.
Expense Creep
Total volume (sales) might increase and
the business can be dying at the same time.
at is because Expense Creep has infected
all businesses, but specifically the retail shoe
business. Expenses tend to "creep up" and
begin to erode a portion of profits.
Certain expenses are fixed, or fixed
with regular increases (rent), or certain
expense categories have recently experienced
For more information on Alan, visit his LinkedIn page at: https://www.linkedin.com/in/alanmiklofsky
CUSTOMER ATTRITION
AND WHAT TO DO ABOUT IT
24 • Footwear Insight ~ January/February 2024 footwearinsight.com
