Circuit City shut its doors, office supply stores are reporting slow quarters, and consumers are staying home. The slow economy has reduced sales in just about every retail store. If your company is selling in the retail channel (or thinking about it), the news can be frightening.

One year ago I could read the writing on the wall. The retail channel was either dead or mortally wounded. Consumers’ buying habits had changed and product sales in brick and mortar stores were in a steep decline. I had the dubious pleasure of steering a once profitable sales channel into the ground.

During a period when retail sales reports were appalling and getting worse each week, Palo Alto Software chose to review every aspect of its retail channel plan. We didn’t expect to be able to fully rebound; we were hoping that we could find a way to slow the decline. We looked at every partnership, channel position, and retail decision. We challenged ourselves to make wholesale changes where necessary. We threw out all of our preconceived notions and started from scratch.

Was our software selling on-shelf in the right stores? Did our pricing model maximize revenue? Did we know where our customers were shopping? What was our competition’s strategy? Were retail sales in the process of dying off? Every aspect of our retail strategy was researched, challenged and weighed. Our start-from-scratch approach immediately brought glaring problems to the surface.

By asking the right questions, our management team was able to get a better understanding of the retail market. We were able to correct our mistakes and identify some very significant opportunities. A year later, Palo Alto Software has a thriving retail channel that continues to realize significant growth, month over month. Retail is not dead, it’s not wounded, it’s just changing!

In retail, the learning curve can be very steep and unforgiving.

Over the next couple of weeks I will be blogging about the lessons we learned in retail. Hopefully this series will challenge your business to take a fresh look at retail. It is a complicated, time-consuming sales channel, but the returns can be well worth the effort.

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