I have been privileged to be offered the opportunity to travel throughout Mindanao in the Philippines through the Rotary Club to learn about retail and the culture.  So far on this trip I have met with many independent business owners and retailers. 

One thing is for sure, Filipinos can make a business out of ANYTHING!  Retail is different here.  Merchandising is a little more limited than in Canada; however service is above and beyond what we could imagine.  The staff to square foot ratio would be enviable by most merchants. And what they do with limited space just blows my mind.

In talking with retailers, it astounds me how much the entrepreneurial spirit is the same throughout the world.  When I share our vision statement 'sharing the passion for retail excellence' with many of these retailers, their eyes get as wide as saucers and they get it immediately. 

The passion and commitment they have to their business is remarkable as they ensure their work is social as well, and often have generations of family working in the business. On their shelves in their homes, they have 'The Starbucks Story', various books by Michael Gearber, and titles like 'increase your retail sales'. 

Though things in this land seem so different, the entrepreneurial spirit is a tie that binds across continents.  I'm looking forward to sharing more of these experiences and learnings with Shelfspace as this month long journey continues.  But rest assured, Western Canada's entrepreneurs are in great company with their Filipino counterparts.

Sonja Kennedy
General Manager

What have you done for Earth Hour?

Hundreds of millions of people and businesses around the world will turn off their lights for an hour to demand action on climate change and show commitment to energy conservation on March 27 at 8:30 to 9:30pm!

A poll by Environics Research Group ( http://erg.environics.net/ ) last year found that companies who switch off the lights for Earth Hour switch on their customers’ respect.

According to the poll:

– 90% of Canadians would feel more positive about a company or organization that participated in Earth Hour;
– 74% of Canadians would be more likely to buy the company’s products/services; and
– 77% of Canadians would be more likely to recommend the company to friends and family.

The poll was commissioned by WWF and is reported in their “Earth Hour Business Toolkit” that’s available for download. ( http://wwf.ca/earthhour/participate/toolkits/ ). The toolkit offers ways for companies to take part in – and promote – Earth Hour, including specific ideas for retailers!

Inspire others - tell us what you are doing in your retail store for Earth Hour!  

Not doing anything? Then show your customers that your business is committed to energy conservation by joining BC Hydro and people around the world to turn off the lights for Earth Hour at 8:30pm, March 27.

Want to know more? Check out: www.earthhourcanada.org

For the past two weeks I was reminded time and time again by CTV's Brian Williams that he's covered 13 Olympic Games. So let me preface my thoughts on yesterday's BC Budget by saying (only once) that this is about the 15th budget lockup I've covered on behalf of BC's retailers. And for first time in 15 years the budget does not contain anything that will directly affect retailers.

In spite of declining revenues, there are no changes to personal and business tax rates. According to Finance Minister Hansen, the previously announced HST will be revenue neutral to Government. While retailers know there will be winners and losers in the short term, most economists and industry groups believe the HST will have a positive effect on the BC economy in the long term. Most ministries will see their budgets cut back by up to 10 percent with the exception of Education with an increase of 140 million dollars and Health with almost one billion dollars.

The financial assumptions for yesterday's budget appear to be sound (if not overly cautious), our debt level is manageable, and expenditure constraint will result in a balanced budget by 2013-2014.

I was fortunate to be a presenter at a Tourism Vancouver event on Monday, focusing on what businesses can do in the final days before the Olympics begin.

 

My advice is: provide gold medal customer experiences; make your store look great; and, have flexible store hours.   In the final stretch to the games Shelfspace has received numerous enquiries from retailers on store hours, so we’ve decided to conduct a short survey in an effort to help retailers determine their store hours.  Please go to http://www.surveymonkey.com/s/shelfspaceolympicsimpact

 

Other last minute ideas are: make sure your windows look GREAT; sell you window to a supplier; provide PEAK training for your staff (go to http://www.shelfspace.ca/Events/Current_Events.aspx) extend your hours of business; make your business safe and accessible; provide signage in multiple languages; identify staff who speak a second language; provide staff with information about the Games events and the city; create a fun and festive atmosphere; post visitor information and maps in key spots; televise the Games; keep a list of key phone numbers or web-sites to assist visitors.

 

Please share your ideas here!

 

- Mark

I came across this rather interesting point of view today on a newsletter I receive from the USA. I’ve never considered this before and thought there might be others in the Shelfspace community who would want to hear this commentary. It is from The Morning News Beat (MNB) and is geared mainly to US Grocery retail; first comment is from an MNB reader followed by a comment from the editor. To be clear not my comments or point of view necessarily but an interesting point to consider given the debate about merchant fees for credit and debit cards on both sides of the border. I’ve always had a gut feeling that a cash sale was less costly than a credit or debit card sale and I guess it still is in real dollars and cents if one takes into account the higher average sale on a card sale vs. cash sale. What I found most interesting is the question of what’s the real cost of handling cash?  Here is the post:

Your Views: Cashing Out

Responding to yesterday’s MNB notes about a New York Times story about the costs of credit and debit cards at retail, MNB user Ron Lunde wrote:

Cash ... what's the real cost of handling cash at retail? Very hard to find any studies on this subject. Government has many studies on costs of checks and cards, nothing apparently on the handling cost of cash. FMI did studies several years back, 1994, 1998 and 2000 ... but would guess those numbers are seriously dated.

A couple of well respected academic types did some rather extensive research a couple of years ago and published the following: The average cash transaction is approximately $11.52. They estimated cash costs around 0.27 per transaction to handle, including tender time, deposit preparation, bank charges and other direct costs. If you scaled the $11.52 to $100.00, the cost is approx. $2.35. Credit costs at the time were around $2.56, signature debit around $2.26 and PIN debit around $1.39 ... on the $100.00 scale. Based on the tier system, large volume accounts appear to get lower costs than those above.... so might be actually lower than cash for all types of cards. (The study for cards included the same cost matrix as cash.) The study showed that the three types of card transactions averaged about $40.00 per transaction, compared to $11.52 for cash.

Consider that several studies show that approx. 4% of customers = 30% or revenue and spend on average $90 to $190 per week. If plastic were banned, that would shift the cash carrying burden to a retailer's best big basket and potentially most profitable customers. Since most consumers don't like to carry a wallet full of cash for obvious reasons (tried to pass a $100.00 bill lately?) and essentially have stopped writing checks for retail purchases, how will retailers accommodate the 4% of their customers that account for 30% of their business?

Not sure anyone is arguing for an all-cash society. The debate is really about whether we should be getting ripped off by fat cat bankers.

One follow up on yesterday’s story, by the way:

I suggested in my commentary that if retailers are successful in getting the card companies to lower their costs and be more transparent, they have to respond by showing that the result to some extent is lower prices. That’s been the argument to consumers - that the costs result in higher prices.

Retailers have to deliver on the implied promise.

It is a safe bet that at least two retailers will do precisely this: Walmart and Costco.

So if other retailers don’t deliver on the implied promise, it also is a safe bet that these two retailers will put them at a competitive disadvantage because of it.

Gerry Spitzner-retailsos.ca

As if the HST, rising occupancy cost, and astronomical commercial property tax increases aren’t enough, Translink just slapped a new 200% tax increase to parking costs in Vancouver.

Thanks to their excessive spending, Tranlink once again is asking retailers, the businesses community, workers, consumers, and students to bear the brunt an unfair portion of their unbalanced budget.   Translink attempted a similar tax increase in 2006 but withdrew the plan due to fierce opposition from Shelfspace and public opposition. And since then, Translink’s debt has almost tripled. When the area parking tax program was scrapped in 2006, $9 million of additional taxes were added to Commercial property owners in downtown Vancouver to offset Translink budget deficits. A significant portion of commercial property tax is paid by retailers. If the parking new tax is approved, it will be applied at 21 % … but once HST is applied and compounded it will amount to 35.2% – the highest in North America followed by Pittsburgh and San Francisco. Considering that commercial property owners through property taxes already contribute $100m to fund Translink today in addition to the parking tax from stalls they own, it’s time to DRIVE OUT THE TAX!

If we don’t get rid of this tax I’m afraid there will be an increase to the mill rate for all commercial property undermining the City of Vancouver’s tax shift which is currently attempting to bring balance to residential  and commercial property tax rates which are currently 6 to 1  paid by commercial tax payers.  But it doesn’t end there. Translink has had a parking tax of 7% in place since 1999 which is collected by the province through PST.  The new tax is estimated by Translink to collect another $30.8m totaling $45m of their $130m previously announced shortfall. Despite this 200% increase Translink is still expected to run a $79 million deficit. The expected loss in parking revenue for Vancouver building owners with paid parking will result in a corresponding $500,000,000 reduction in the value of Vancouver buildings.  This will amount to approximately a $10 million loss in property taxes for the city of Vancouver.

While the immediate threat exists for Vancouver, I believe Translink is setting a precedent that all retailers should be keeping an eye on. If Translink gets away with this in Vancouver I suspect they’ll attempt the same tax grab in other municipalities as well!

- Mark

It’s Christmas time, and as a retailer I know we’re all up to our eyeballs in inventory, people issues like training and just generally dealing with busy customers. And it’s the time of year when we either triumph or we don’t.

But I also know that although we are retailers, we’re people too – with financial pressures and limited time. As an independent myself, I want to support independent business, and I appreciate it when others in this community support my business.

This is why I support shopping local over doing a pile of shopping at the local big box.  But my issue is really with other independents who tout ‘shopping local’ to benefit their business, and do all their Christmas shopping either south of the border or in big boxes. Who is that benefiting? Isn’t this the season that we all as consumers spend the most money that could really support local businesses?

Don’t get me wrong, I am ALL about healthy competition, regardless of the size of business. But it frustrates me when I hear business owners talking about shopping local and calling for the community to ‘purchase your gifts at my store’ and then I see them turn around and not support their neighbour. If we’re really honest with ourselves, how many 'shop local champions' will forgo unique, community building merchandise in exchange for a quick, cheap and easy purchase at the neighbourhood big box?

Shouldn’t we lead by example?

Ian

LET THE BUYER BEWARE! IF IT SOUNDS TOO GOOD TO BE TRUE, IT IS!

When I think of these age-old clichés, I can’t help but think of the growing number of “third party” payment processors offering retailers incentives that are simply too good to be true…like fixed very low base rates for 1 to 5 years and low transaction fees to name a couple.  My advice any retailer thinking of switching from one of the few national payment processors to a third party is BEWARE! 

I’ve heard stories of additional statement fees, additional ‘per-item’ fees and other charges.  And once a retailer realizes the costs are higher than originally hyped, the penalties for ‘breaking’ out of the contract can be excessive. In the world of payment processing, a handful of national processors are the manufacturers, and the third party processors are the retailers who buy transactions and then mark them up in order to pay for their cost of business. So ask yourself…how can the retailer sell the product for a price that’s lower than the manufacturer’s price…and guarantee the term for periods longer than the manufacturer can? One of the answers is, “not for long before they either go out of business or attempt to increase the price”! 

Retailers also benefit when their trade association is working with a national processor.  For example, Shelfspace’s endorsed national supplier is Global Payments. This puts Shelfspace in the position not only to negotiate low rates for all members, but also assist members to resolve disputes that occasionally arise.

Shelfspace! Thanks for the email about the Workplace Training Program. What a great opportunity for employers to cover some of their training costs.
This will be incentive for me to continue with more PEAK courses for La Gang at LaLa's. If your company has 50 or fewer staff members download the PDF and send in your request too, free training, can't get much better than that.

Kristina @ LaLa's in Deep Cove

This week Interac is celebrating the 25th anniversary of the debit card.

In my view, Canadian retailers should be reluctant to join the party because while debit and credit card use in Canada has soared over the past 25 years, retailers have almost lost all control over their point of sale and costs are on the rise. It all started over 50 years ago when the charge card hit the market with the promise to consumers that, rather than paying with cash or by cheque, they could “charge” their purchases to a piece of plastic and make one convenient monthly payment to the credit card company. The card companies enticed retailers into the system by offering a wider market of consumers with the added benefit of reducing the risk (and cost) from bad cheques.  Credit card processing fees to retailers in the early days were higher than 5%, but retailers were also achieving net margins north of 10%.

The next step to loss of control over the retailer’s POS occurred 25 years ago with the introduction of the debit card. I can still remember how I originally gloated when I used my new debit card to get cash. While the late adopters of the debit card waited in lines 30-40 people deep to be served by “human” tellers, I was unwittingly participating in a huge shift in cost from the bank to the retailer by using the “automated” teller.  It wasn’t long before debit card holders began asking retailers to dispense cash – a job previously performed by bank tellers! While Interac celebrates, the Canadian retail industry is waging an all out battle in Ottawa to ensure that the government does not allow card companies to have complete control over all transactions at the retail POS.

To learn more please visit www.shelfspace.ca and read about the Stop Sticking It to Us campaign.

- Mark