Retailers Turn to Alternate Financing Options
Access to operating capital remains an ongoing challenge for some retailers, which are still facing a difficult time when it comes to securing a loan. The problem is particularly acute for small and medium-sized businesses: Among U.S. small business owners, 90% believe the availability of credit for small businesses is a problem, and 61% agree it’s harder to get a loan now than it was four years ago, according to a recent study by the American Sustainable Business Council, Small Business Majority and Main Street Alliance.
As a result, some retailers are looking beyond traditional finance options and seeking out alternative lending solutions. One such option is merchant cash advance services, which can provide retailers with the fast capital needed for renovations, inventory, expansion and other needs. Also known as business cash advances, the growing popularity of merchant cash advance services is driven by relatively low personal credit requirements and quick process of obtaining the cash advance.
“Merchant cash advance services supply retailers with working capital via a relatively fast and easy process, and are tailored specifically for businesses that accept credit cards. The firm purchases the future credit card revenues of the retailer at a discount,” explained Seth Broman, VP business development for New York City-based Merchant Cash and Capital, which provides working capital to restaurant, retail and services businesses.
The amount of funding the retailer is eligible to receive is based on its average monthly credit and debit card processing volumes, and most businesses can typically qualify for one to two times their average monthly processing volume, according to Broman. The advance is paid back by remitting a percentage of the business’ daily credit card processing receipts to the merchant cash advance provider.
“An advance can be paid back between six and 12 months,” Broman said. “A typical advance can be structured in three to five days, allowing the retailer access to the capital needed almost immediately.”
To be approved, the retailer must be open for at least six months, accept credit cards and process an average of at least $5,000 per month in credit card sales. Additionally, retailers are not required to pledge collateral or post personal guarantees as they often are with traditional commercial lending vehicles.
“Since the advance is paid back with a fixed percentage of future credit card sales, there are no large monthly payments bearing down on the business owner, which is especially helpful for seasonal businesses,” Broman said.
Retail operator Samuel Placeres, the owner of Seventh Avenue Stores, an East Coast-based women’s apparel chain with 11 stores, is among those retailers to utilize alternative financing. Having been in operation for just over a year, Placeres was focused on increasing profits of his fledgling chain. He wanted to open a location in New Hampshire but lacked the extra revenue needed to purchase all of the required inventory.
At Merchant Cash and Capital, Placeres was able to secure a $75,000 advance that enabled him to stock enough inventory to open the new store on time.
“You can’t open a new store without inventory, and Merchant Cash and Capital was able to provide the quick and easy financing I needed to overcome my financial setback,” Placeres said. “It was a great service and I plan on using it again in the future.”
I am sure that today it’s
I am sure that today it’s time for alternative lending and financing. More and more people choose alternative lending products. I think that banks, especially big ones like Bank of America, do not treat their consumers well. It’s better to apply to an alternative lender because there’s a chance to be offered really good terms and conditions. Also you can spend your time, money and enjoy a very good service. Times change and today there are lots of ways to get funding when it’s necessary. Melany from http://bit.ly/N1y0Iq
Are you delivering the optimal shopping experience for shoppers on tablets and smartphones?
By Thierry Costa, [email protected]
Your online customers are increasingly relying on their tablets and smartphones to research products they want to buy, and to complete their purchases. “Couch commerce,” where shoppers are using their portable devices to take their online shopping away from their desks, has grown steadily over the past several months: according to IBM’s Black Friday and Cyber Monday Reports from late 2011, sales from mobile devices were three times higher in 2011 than 2010. The New York Times also reported that tablets gained prominence with online holiday shopping, as 75% of web shoppers made purchases on their tablets and 94% on their laptops. Some experts predict that tablets will ultimately replace the desktop as a preferred method for purchasing online.
To make sure your customers are just as enthusiastic about your own mobile storefront(s), you should smooth out the navigational and search bumps that can get in the way of fast, easy browsing and shopping – and what you do for a smartphone shopper can differ substantially for tablet shoppers. The technical specifications of both devices require separate strategies for developing ways to help customers browse and find products. Tablets in general offer certain benefits over smartphones as the screens are bigger, which means content and images are easier to read and see.
The tips below are just a few ideas for what retailers can do to improve the user experience of their tablet and smartphone shopping sites by delivering a tailored search and navigation experience.
Assess image selection and zooming capability: Do your product photos rely heavily on a shopper’s ability to zoom in on images, select parts of images, or click back and forth among sets of images? Because tablet users use fingertip taps and swipes to select images and content, make sure you design the user experience to take these gestures into account. Allow users to pinch images, rotate them with their fingers, and hold their fingers on or tap an image to load a bigger image. Consider adding these capabilities right within search results pages. Allowing users to “play” with the product images in search results pages makes a lot of sense – users can examine a product and compare product options directly from the search page, where additional refinements and sort options are also available.
Rethink navigation elements for tablets and smartphones: As with images, tapping the screen is the standard method of navigation for tablets, and for most smartphones as well. However, small text menus – for instance, those that you might find in lists of refinements – are hard to tap on without hitting another menu item by mistake. The same goes for buttons that are too close together, or pagination numbers: these items are easy to click on with a mouse, but challenging to click on with a finger.
Consider making sure text font size and action buttons for tablets and smartphones are bigger than what you would normally use on your regular website. One good presentation idea is a drop-down menu, which gives users full refinement capability while saving screen space by hiding options when they are not in use. This helps reduce visual clutter on the mobile site, since visitors can view more products and content without having to scroll down.
Search page results should also follow device-specific guidelines. For instance, on a smartphone shopping site’s search results page, make sure to use only one column in order to maximize the use of the limited space. Include clear thumbnail images, with product name, short description, and price. On your tablet shopping site search results page, you should use two or three columns in a grid view compared to the three, four, or five you might use on your regular web shopping site. Better yet, allow users to choose the number of grid columns on your tablet shopping site, with a simple swipe of the finger!
Help shoppers do their research – and find the “Buy” button quicker. Consumers using smartphones are sometimes referred to as “hunters,” since they’re usually doing product research or hunting for the best price. For instance, these browsers might be looking for store location and hours, finding out if a particular product is in stock – or looking for a better price online while in a brick-and-mortar store. So how do you turn these browsers into shoppers? One way is to encourage them to shop by rendering the “shop” step easy and natural. This can be done by adding a “Buy” button on the search results page right under the product description or image. Consider showing discounted prices to encourage browsers to become shoppers. Simplifying the checkout process, by reducing the numbers of steps, is also recommended.
Also, make it easy for smartphone users to find localized information, such as product availability near their present location, with simple “In Stock” or “Available Nearby” buttons that take them to the “Buy Now” page directly form the search results page.
On the other hand, when your customers are using tablets to browse your storefront, they’re often sitting comfortably on their couch and are ready to commit to a purchase. In fact, 49% of tablet owners say they plan to buy more via their devices in the coming year, compared with 19% of smartphone owners, according to a study from Zmags and Equation Research. Make sure your search and navigation tools help speed the path from browsing to buying for tablet users – for instance, indicate whether products are in stock or out of stock in search results, so that shoppers can quickly find a product that’s available now.
Give prominent placement to the search box – and add a search box to the bottom of the page. While tablet users benefit from more screen real estate, they can still use some help in finding the search box. For both smartphone and tablet storefronts, make sure the search box is large and easy to find. On Gotapparel’s mobile site, the search box takes up much of the space on the home page, which makes sense – it should be more prominent than the search box that appears on your standard online storefront. For smartphone users, it helps to add an extra search box at the bottom of webpages. This allows shoppers to easily continue exploring the site without having to scroll back up to the top.
The smartphone and tablet landscape is changing rapidly, as new models flood the market and capabilities improve. At the same time, consumers show increasing willingness to shift their browsing and buying habits to these convenient devices. Keep a close eye on website analytics that can tell you which devices shoppers are using when they browse your site and when they make a purchase – and make sure they’re indulging in the best possible m-commerce or couch commerce experience.
Thierry Costa is VP marketing at SLI Systems, a full-service, customized, on-demand solutions for site-search, navigation, merchandising, and user-generated SEO. He can be reached at [email protected].
No comments found
Focus on: Operations
Given the escalating cost of fuel, conventional wisdom dictates the way to save money would be to schedule fewer miles. But this is not always the case, as witnessed by specialty retailer LifeWay Christian Resources, which found that more frequent deliveries translate to less cost across its retail enterprise.
LifeWay Christian Resources, which operates 170 stores throughout the nation, reinvented its distribution model — shifting from one consolidated truckload delivery per week to its stores to multiple UPS deliveries of smaller quantities.
“Even with the increases in fuel costs, it is still more efficient overall to have frequent store deliveries with smaller volumes rather than one large delivery per week,” said Mike Harry, chief supply chain officer at LifeWay Christian Resources, Nashville, Tenn., whose stores sell a wide variety of Christian materials and services, including books, music and videos.
The benefits to store operations have been numerous, particularly the reduction in time to process deliveries and the ability to get product on the selling floor more quickly. Store managers know precisely when UPS will deliver each day and exactly what is in each shipment. This visibility, plus the smaller volume of product arriving in each shipment, enables more productive scheduling of store associates and more proactive outreach to customers waiting for new or special-order merchandise. Previously, LifeWay found that while it often had stock on-site, associates couldn’t find the items they needed because supply rooms were jammed with boxes of inventory needing to be unpacked.
“At a high level, we save approximately one hour per store per week — that’s 170 hours saved per week, which is very significant when multiplied across the year,” Harry concluded.
Before adopting the new distribution model, 65% of merchandise shipped direct to store and only 35% went through the LifeWay distribution center. Today that model is reversed: 65% of store deliveries are processed through the DC and arrive at stores in small, easily processed quantities.
“Our goal is to make delivery of product as seamless and quick as possible,” Harry explained. “We have taken steps to minimize the impact of deliveries at the store level by doing things like pre-pricing product before it ships so it arrives floor-ready, and store associates can focus on serving customers rather than performing backroom functions.”
In addition to maintaining and replenishing some 16,000 SKUs in its stores, roughly 130,000 SKUs are available to LifeWay customers via special order and the company’s e-commerce site. A robust visibility tool available through UPS, the Quantum View Inbound Notification system, marries the physical movement of goods with the movement of information — effectively providing store managers with an advanced view of inbound shipments so they know what is arriving on any given day. This visibility and the consistency of UPS deliveries contribute to a positive shopping experience in the store and enhanced service for e-commerce as well as special-order customers.
Looking ahead to the 2012 back-to-school and holiday seasons, Kiel Harkness, UPS retail strategy manager, noted: “E-commerce is the fastest-growing channel, and excellence in fulfillment operations is becoming a key differentiator for retailers. Increasingly, retailers must have the ability to deliver packages when consumers expect to receive them and provide information along the way.”
Lifeway’s Harry acknowledged that the new distribution model was counterintuitive to the retailer’s historical practices and certainly presented a cultural shift. But he said the chain drove the change by helping everyone to understand costs from a holistic standpoint rather than just based on one segment in the operation.
“You have to look at the savings from the standpoint of total operations, not just transportation costs,” Harry emphasized.
No comments found