3 Ways Boutiques Can Become Better Buyers with Data

Hey, guys, it's Ashley Alderson, the founder of the boutique hub here. And I'm so excited to bring you this video because I have a special guest and we are in one of the cutest boutiques I've been in for a long time. We're in Adeline in Dallas, Texas, which you can check out online@Adelinestores.com and we're going to talk today to our special guest about some processes that are crucial to boutique owner success. So I want to introduce Josh Orr, who is the founder of Streamline, which is a technology company that is partnering with the boutique hub to offer something really special to the entire boutique industry.

Sure. Thanks, Ashley. So we are from a company called Streamline. We're based in Houston, Texas, but we work with retailers all across the country. What makes us unique is that we are a retail technology company, which means that we're going to work with your inventory control, your point of sale, your website and your technology. Because as you know, as they know, all these things are so interwoven, and it's such a pain to have to have one company for your it, but then you have your point of sale guy, and then you have this other dude for this, and you end up calling all these other people, and we kind of push those all into one place for boutique owners.

Yes. So I love this because when you and I first met and we were visiting on the phone, it's. It's the same concept as what we do at the hub. So for those of you who don't know, the boutique hub does two things in terms of the boutique community. We help consumers around the world discover boutiques to shop them directly. And then we help the industry itself connect, collaborate and learn and grow. And you have a hub model yourself, where you're bringing all of these pieces of technology that are crucial to the boutique owner together so they aren't sitting there pulling their hair out at the end of the day, banging their fist on their computer, which I think I've done as well. So you have a really unique solution that I think is brilliant.

Thanks, I appreciate that.

Yeah. So let's talk about process for a second, because as you and I discussed, there are boutique owners who guess and they throw spaghetti noodles at the wall and try to make informed decisions when it comes to inventory management. And really their greatest maintained margin and actually putting money in their pocket at the end of the year. And then there's boutique owners who have a system and they have a process and they have reports that can give them an educated decision. So that's what we want to dive into to help you understand what that process might look like for you.

Absolutely. I think one of the things that's really challenging today for a brand new retailer is that you sign up for something like Shopify or you sign up for something like Square, which are kind of the two things that we see a brand new retailer gravitating to, which we love. We love those tools. But what they don't really teach you is that there's a way that we can track inventory that lets you know that you are successful, why you're successful and what you can do to be more successful. Because at the end of the day, if you aren't tracking some of these important metrics, even if you end up making good income, because I think what we see is that retailers like yourself, you're actually going to do a pretty good job. You're going to make some money, you're going to grow your business. But what can be really hard and blinding is when you're successful, you could always be more successful and that success isn't always going to be there. And so once you have some process in place, it really gives you a way to guarantee your success as you continue to grow. And even as the owner may remove themselves from the business, like the day to day and being the one checking out constantly.

Yeah. You know, the key to driving business is growing your business deep rather than growing your business wide. To get started, there has to be a great foundation. So whether it's building the business for the long term, and that trickles down to when you're in a place like we're here in Dallas, we're going to Dallas Market Center. Your boutique owner, your buyer that works for your boutique, you have to go in with data that can help you be a better buyer, that in turn give you that profit at the end of the day. So let's talk about how we get there in terms of just the initial breakdown of inventory in the store and how we can look at sales by class so that we can track those sales numbers and in turn understand how to be a better buyer.

Yeah. So there are a few things that you're going to want to do. First off, when you are setting up whatever system you go with, like these principles, they are old, they are tried and true things that retail has been around for a very long time and these things haven't changed. And it really, it's a paper and pen process. We're going to find that you want to find a system that makes that process as easy as possible and gives you the best data possible. And one of the things that you're going to want to do is organize your inventory efficiently in a way that gives you really good data coming out. So, you know, we're in a really cute boutique. They have everything from denim and dresses and blouses and sweaters and jackets and these various pieces. And it's really easy to lose track of exactly what is driving your success. So the first thing that we think that you should be looking for this is once your system is set up, is what are your sales by category, Which I know that seems so obvious, but as you have these areas that are driving the success of your business, we want to make sure that the next trip to market that we're continuing to invest in the areas where your sales are the highest. But on the flip side of that, we also want to look at your profit by category. It's not just your revenue. You could technically be selling a ton of jewelry. But if that jewelry has a really low profit margin, it isn't really worth the store. So you want to use those things to drive traffic into the store. But then we want to make sure that we're upselling these higher profit items. So that gives you an action item of beginning to train your staff. Hey, when someone's in here just to buy jewelry, I'm saying using this thing as an example, jewelry is actually a pretty high margin item. But you guys get the idea.

Well, are you selling something that's full price? Are you selling something off the sale rack? Because a sale isn't a sale, you have to understand at what point and how fast is that inventory turning. But before we go to that point, let's go back to category and how a boutique owner might even look at their category. Because for some, I think they think it's tops, it's bottoms, it's jewelry, it's accessories. But it's so much more than that, because a top isn't a top. A top could be a graphic tee, A top could be a fashion top, A top could be outerwear. A top could be a romper. If you want to put it in a top rather than a bottom, there's a number of ways to look at it, and the number of classes you track is up to you. But you have to look at it on that.

Absolutely. In that case, what you're using is you really want to utilize the category and subcategory levels. So you do get that top level idea of what's selling, why it's selling from the fact that just tops are selling, because that's really important. But we do want to see that graphic tees are really driving your business forward. Or you went to market and you kind of got on a little graphic tee kick. But they're just not driving revenue to the level that you would think they.

Were serving too many margaritas in the graphic tee booth at market. I mean, that's right. And then you get home and you're like, what was I thinking? It was five o' clock the last day of market. I had too many margaritas and now.

Look at what I have now. We're a graphic tea store.

Merry Christmas. Right, so not only by class and category, by style, but also by brand a lot of times.

Absolutely. Yeah. And in almost any system, those are really going to be separate. So one thing that will that kind of the backdrop to any of this conversation is whatever system you choose, whatever point of sale solution you go with, make sure that you really understand the nuances of how they organize their inventory, how they organize their brands and what reports you can pull based on those. Because you do have big brands that could drive the success of your store. Or maybe you'll find that that actually has nothing to do with how revenue is driving.

Right. So you're going to have that data and the next step you're going to take once you understand what that data is, is you're going to be a better buyer and you're going to have open to buy data. You're going to know what to take to market with you. So you know where to make it, your purchases.

Absolutely.

Right. So how about the next point about how fast that inventory is turning in those categories?

Absolutely. So another number that's a little different from revenue from category is going to be your inventory turnover by category. You technically could sell a lot of jackets and your revenue is high. They're probably because they have a larger price tag. And so obviously that's going to be a huge bit to your business. But the inventory turnover, if it's six months, eight months, nine months, it's actually costing you a lot of money to keep that stuff on the shelf. So we want to make sure that we are purchasing things that turnover quickly. So whatever those items may be, and so pretty much any system you get, this can actually be a really challenging report. And so we're going to be making some other content that's going to push you to how do we find that number? Because that's an incredibly important number for.

A retailer to know exactly how about customer data? Because when it comes to point of sale information, I mean, there's so many different reports you could run, but one of the most important is definitely customer information. As you know, in the majority of boutiques, 80% of your revenue will come from 20% of your list. So understanding who your best customers are is crucial to you to increase your bottom line.

Absolutely. I mean, as you guys know, the more expensive, the most expensive marketing out there, targeted marketing. So, you know, putting a billboard up just goes to everybody that's really cheap and you can get that stuff. But getting something that goes to a girl between the ages of 18 and 22 who's interested in fashion, who's interested in this, that becomes a little more expensive. But as a store owner, your goal and what is so valuable to you is who are your top revenue customers, your top profit customers, who's visiting the most often and retargeting so you can send them value, send them content if they haven't been in your store in a long time. You know, one little thing that we like to do is to pull a report of who are your top 10 customers for an entire quarter who did not come in that next quarter and sending them a personalized email saying, hey, we love your business, we appreciate your business. Here's a $25 gift card, no strings attached. Just here's a tidbits, bring you back into the store because these people were spending money in your store, so it's worth getting them back in and rewarding that 20% who's driving 80% of your revenue, but maybe hasn't been in for some time.

You can reward the top tier of those customers, but then you can also, perhaps the ones who haven't been in a while, not only give them an incentive to come back, but also use that as an opportunity to ask questions.

Sure.

That's an opportunity to reach out and understand maybe why they haven't been back. So you're doing a customer survey or something else along those lines to get more customer information from that targeted data that you already have.

Absolutely. And I think, you know, a big piece right now once you have that data is, you know, we have a lot of brick and mortar stores who don't have a website yet, and you have a lot of online stores that are moving to brick and mortar, and it gives you the ability to immediately drive business to the other. So if you're opening your first online store, you can send some information to your top customers and say, hey, check out our new store, especially for boutiques I think something we see a lot is girls graduate and they go to school and they move cities and they have their favorite places to shop, but they're not able to connect with that boutique. And it leaves that connection with that favorite boutique from their hometown or that favorite boutique from vacation or whatnot. It lets you drive that revenue. And the same applies from if you were online now, pushing people into your store.

It's omnichannel marketing. Right. It's going to wherever your customers are. So point of sale systems are across the board. Whether you're online, mobile, brick and mortar, you name has a very important piece of the process in your business.

Absolutely. Yeah. Awesome.

Well, these are great tips. And I think talking about that college girl who travels around the country and she's not sure where to find her favorite boutique. She could also come to the Boutique hub to find her favorite boutique as well. She's still in contact with you there too. So if you want more information on what Josh and I are talking about today, you can hop on over to the the boutiquehub.com join if you're not already a member. We have a complete training library inside, and we're gonna have some extra videos in there, some checklists, some tours, and talk about different point of sale systems, technology, website development, you name it. Because you guys offer something in all of those categories.

Absolutely.

I'm excited about having you guys inside of the hub. And if you guys want to learn more about Streamline.

Yeah. You can visit the Streamline. That's the Streamline Co the BoutiqueHub. We're glad to connect. We work exclusive exclusively with retailers, and in particular, we love working with boutiques and helping grow your business.

All right, we're gonna get him a boutique boss shirt while we're at it. Awesome. Thank you, guys.

Thanks.