Home Accessories and Gifts Business Plan

The Scarlet Tassel will leverage its expertise, product offer and marketing strategy to increase its customer base while driving sales and profit.  The following sections review the various strategies that will support this effort.

6.1 Competitive Edge

The Scarlet Tassel looks to establish itself competitively as a unique retail environment through its product offering, the scope and level of services it provides, and the expertise of its employees.

PRODUCTS: Sourced through established manufacturers via international trade shows and one-of-a-kind specialty craft fairs, the products offered by The Scarlet Tassel will provide a high level of quality and value to the consumer. The range of products will be unique, with little crossover to other retailers within the Atlanta marketplace.

SERVICES: Connecting with the customer is a key focus for The Scarlet Tassel. Through personalized design services, educational decorating workshops, gift registry, realtor programs, ASID discounts, gift certificates, gift wrap and preferred customer recognition programs, The Scarlet Tassel will provide a level of personalization not commonly found in today’s hectic, mass market. It is our desire that customers look to us as their valued resource to achieve a personalized home environment.

EMPLOYEES: Employees of The Scarlet Tassel will enjoy a friendly, fair and creative work environment, which respects diversity, new ideas and hard work. Development through experience and training will be a primary focus. It is our desire that employees are long-term ensuring an expertise that will support the customer experience.

6.2 Marketing Strategy

In addition to price and item promotional announcements, The Scarlet Tassel will focus its marketing efforts via several key direct-to-consumer advertising vehicles:

Local and Regional Magazine Publications: Each of these advertising vehicles provides a demographic base that lines up nicely with that of The Scarlet Tassel.

Direct Mail Postcards: The Scarlet Tassel will look to increase consumer awareness, retain the existing customer base and promote increased sales via seasonal postcard mailings. These mailings will be targeted around special events and are intended to liquidate slow moving products or showcase vendor negotiated specials.

• Spring Open House–15% to 20% savings opportunity.
• Fall Open House–15% to 20% savings opportunity.
• Holiday Open House–15% to 20% savings opportunity.
• Annual Anniversary Postcard–promotes in-store design seminars, special events and savings opportunities.

Website Marketing: As we establish our e-commerce business segment during Year Three of operation, we will support the business via search engine marketing, banner advertising, URL links and e-mail marketing on all correspondence. This third channel of business will increase the customer base, sales potential and service opportunities provided by The Scarlet Tassel.

6.2.1 Promotion Strategy

The Scarlet Tassel will leverage its expertise, product offerings and marketing strategy to increase its customer base while driving sales and profit. The following sections review the various strategies that will support this effort.

6.3 Sales Strategy

THE CUSTOMER
The Scarlet Tassel will approach sales from a salesperson-customer relationship basis. All sales associates will be trained and encouraged to assist customers in a personal manner, utilizing first names and asking the questions needed to provide the customers with the services they desire. Gathering key customer information and seeking performance feedback on the products and services offered will assist us in the following ways:

• Targeting our marketing efforts more effectively.
• Developing product offers and merchandising formats that will increase sales.
• Developing services that enhance the shopping experience.
• Training and developing sales associates in order to effectively service the customer.
• Increase awareness of The Scarlet Tassel within the retail consumer marketplace.
• Develop future sales opportunities that allow for continued growth of the business.

THE PRODUCT
In order to provide the customer with the most up-to-date home decorative and gift products on the market, we will attend international tradeshows which showcase all of the products manufactured within this category of business. Attending market will not only allow us to ensure our product offer is current and up-to-date but will provide us with fresh, new store merchandising and display ideas.

To stay abreast of market and product trends, we will utilize the following trade publications to reinforce and expand our knowledge base:

• Giftware News
• Home Accents Today
• Home Decor Buyer
• Residential Lighting
• Accessory Merchandising
• Gifts and Decorative Accessories
• Greetings etc.

MERCHANDISING
Products will be showcased via lifestyle merchandising that inspires and promotes multiple purchases. We look to create a strong visual impact creating an invitation to touch and purchase.

PRICING
It is the goal of The Scarlet Tassel to offer style and quality at a value to the consumer. Our pricing structure will support a 55% gross margin and position us competitively within the marketplace. Seasonal promotional offers and annual anniversary sale events will encourage additional sales and multiple unit purchases.

OUR EMPLOYEES
Employees of The Scarlet Tassel are an integral part of the shopping experience for the customer. All employees will be developed for growth and advancement, and compensated fairly with effective training that will enable them to confidently service the customer.

TECHNOLOGY
As we enter the 21st century, proper technology is becoming key to meeting the customer’s expectations. The Scarlet Tassel has chosen Celerant Advanced Retail Management System (Celerant ARMS) as its retail management software. After careful consideration of Retail Pro and other well-known retail software programs, Celerant ARMS was chosen for its advanced real-time capabilities. Company-wide real-time data access in lieu of nightly polling or other end-of-day processes is a feature not offered by most software in this price point. With an eye towards the future, real-time will greatly enhance the experience of The Scarlet Tassel’s customer, especially in an Internet or multi-store environment, without an expensive software change.

Additional features include:

Point-of-Sale	Transaction Tracking	Customer Management	Inventory Management
Customer transactions: receipts, gift certificates, special orders, gift registry Barcode scanning Price check Inventory lookups Gift receipts	Track and review each register transaction Daily summaries by store and register	Multiple ship-to addresses Preferences Advanced reporting: lazy/active customers, minimum purchases within inventory class, geographic	Item entry: matrix, 12 customizable categories, unlimited barcodes Pricing: markdowns, price changes Physical counts

Purchase Orders & Receiving	Vendors	Analysis	Administration	Others
Quick receiving Order approval process	Full contact management Multiple contacts for a single vendor Link multiple brands Link multiple remit to contacts for payable generation Track terms and payment	Complete inventory performance profiling Ordering analysis Graphing Search multiple unrelated brands, classes, styles, etc. Exceptions based on: on-hand levels, sell-thru performance, sales performance, aging Data export to excel	Store management: centralized administration from a single location Employees: complete rights-based security	Return Authorizations Wireless Applications Integrated E-Commerce Integrated Accounting with QuickBooks and MAS 90

6.3.1 Sales Forecast

The Sales Forecast, as detailed in the table and charts following, is based on The Scarlet Tassel’s planned retail space of 3,500 square feet and the average $ sales per square foot expected. All revenues in the forecast are from direct retail sales and do not include any miscellaneous income. Monthly sales, as noted in the Appendix, have been adjusted to reflect the “valleys” that the retail business is noted for. Dips in sales are expected, in particular, for the months of January, February, and March.

Quarterly sales are expected to be driven by each major category as follows, and will be enhanced with sales supporting seasonal holidays or gift giving occasions as noted below:

1st Quarter
Holiday Clearance, Valentines Day, Easter

70% – Decorative Accessories
3% – Accent Furniture
6% – Wall Decor
2% – Home Textiles
7% – Special Occasion Gifts
5% – Personal Accessories
3% – Seasonal Decor
4% – Garden Decor

2nd Quarter
Mother’s Day, Father’s Day, Memorial Day, 4th of July

70% – Decorative Accessories
3% – Accent Furniture
5% – Wall Decor
2% – Home Textiles
8% – Special Occasion Gifts
5% – Personal Accessories
3% – Seasonal Decor
4% – Garden Decor

3rd Quarter
Labor Day

70% – Decorative Accessories
4% – Accent Furniture
6% – Wall Decor
2% – Home Textiles
8% – Special Occasion Gifts
5% – Personal Accessories
2% – Seasonal Decor
3% – Garden Decor

4th Quarter
Halloween, Thanksgiving, Christmas, New Year’s

70% – Decorative Accessories
4% – Accent Furniture
4% – Wall Decor
3% – Home Textiles
8% – Special Occasion Gifts
5% – Personal Accessories
4% – Seasonal Decor
2% – Garden Decor

Growth rates for Years One through Three are planned as follows:

• 2003 to 2004 (Year One) – $179 per square foot
• 2004 to 2005 (Year Two) – $237 per square foot; 32.40% growth
• 2005 to 2006 (Year Three) – $284 per square foot; 19.83%% growth

With the industry average estimated at $300 per square foot, growth planned is attainable. In spite of the economic unpredictability we are experiencing, these projections are supported by the continued strength in the Atlanta home decor market. Source: Home Accents Today, Spring 2002

6.4 Milestones

The following table lists important milestones, with dates and persons primarily responsible for planning, as well as budgets where applicable. Mentioned by first name in the table are a few persons whose expertise in their field of work are required to make The Scarlet Tassel a reality. They include:

• Bob Levine – Real Estate Agent, Coldwell Banker Commercial
• Jeff Burkholder – Graphic Artist, Burkholder Designs
• Victor Moldovan, ASID – Store Planner & Designer, Moldovan Interior Design
• Barry Brouner, CPA – Accounting & Tax Consulting
• Steve Anderson – Attorney, Anderson & Dailey