Nine Lives Outdoor Gear Consignment Shop
Strategy and Implementation Summary
Nine Lives will be heavily promoting the store early on to drive in both buyers as well as suppliers. Having a wide range of inventory is important and this can be best achieved through a two prong approach. The first is advertisements in local outdoor magazines/journals announcing the store and requesting people to bring in their extra clothing and gear to sell. The second approach will be by contacting outdoor manufacturers, retail outlets, and manufacturer representatives and alerting them to the option of selling their excess products at Nine Lives.
Nine Lives will be attempting to turn over inventory often to promote people coming in often to find some new bargains. This will be done through reasonable prices so customers feel that they are getting a good value.
5.1 Competitive Edge
Nine Lives competitive advantage is two-fold:
- A selection of used clothing and gear not replicated in the city. Although there are many different outdoor retailers in Eugene, there are none that sell used merchandise. Used merchandise can be up to 60% less expensive than the new counterpart, so there is definitely a draw to the product, particularly in a town where people enjoy their outdoor activities at the expense of making money.
- Superior, personalized customer service- although Nine Lives’ product is used clothing and gear, there is no reason to assume that the patrons of a used store deserve any less quality of customer service that you would expect from a top shelf retailer. Even consignment shop retailers have expectations of high service. At Nine Lives the customer will be treated with very personalized service. It is not unusual that consignment shops have regulars who visit often. With this in mind Nine Lives will have a database of customers and purchasing history so when they enter the store the sales person will have very personal information about the customer.
5.2 Sales Strategy
Nine Lives’ sales strategy will be based on solid retailing techniques of proper display and proper lighting. The store will be set up so that the floor space is divided up in thirds with the best sellers in the most accessible front third, and then the next best sellers in the second third, and so on. This will help highlight Nine Lives’s best offerings. In addition to this strategy for retail, the store will be well lit with natural lighting.
The clothing will be tagged with bar code price labels, providing inventory control as well as discouraging the modification of the prices by unethical customers.
Nine Lives will also be rotating their unsold stock every 90 days. This means that if an item is not sold within 90 days the owner will pick it up. Having forced inventory turnover provides an incentive for people to come in frequently in order to view the new items.
5.2.1 Sales Forecast
The first month will be used to get the store ready for business and there will be no sales activity. To prepare the store, display counters will be set up as will all of the racks. Dressing rooms will then be built. Month two will mark when the store is officially open, and business will be slow. During month two Nine Lives will begin to build up inventory. This will be done through advertising in the many different local outdoor magazines/ journals, as well as advertising at the University of Oregon generally, as well as through their Outdoor Program.
Month four will finally have a decent amount of sales activity and it should steadily improve from there.
|Year 1||Year 2||Year 3|
|Outdoor participants-limited $$$||$135,152||$185,214||$210,412|
|Direct Cost of Sales||Year 1||Year 2||Year 3|
|Outdoor participants-limited $$$||$67,576||$92,607||$105,206|
|Subtotal Direct Cost of Sales||$117,385||$155,650||$172,041|
Nine Lives will have several milestones early on:
- Business plan completion. This will be done as a road map for the organization. While we do not need a business plan to raise capital, it will be an indispensable tool for the ongoing performance and improvement of the company.
- Completion of the store redesign and back office set up.
- Year to date sales exceeding $100,000.
|Milestone||Start Date||End Date||Budget||Manager||Department|
|Business plan completion||1/1/2001||2/1/2001||$0||Jim||Marketing|
|Completion of the store redesign and back office set up||1/1/2001||2/1/2001||$0||Jim||Department|
|Y-T-D Sales exceed $100,000||1/1/2001||6/30/2001||$0||everyone||Department|