• Happy New Year!!!

2009 was a very tough year for retailers. If you managed to survive, 2010 should be a better year. Economists forecast a lower unemployment rate. Consumers are slightly more optimistic. Things are looking up.

Imagine if Congress owned your retail store or restaurant. You would be able to completely modernize your business. Get rid of those old bathrooms and add new marble bathrooms. Your energy costs will go down with your new solar panels. Don't worry about paying for employees. It's all paid through your stimulus program. Health care is free. Just get rid of it. If an employee has a health problem, just pay the $750 fine for not having health insurance. Don't worry about making a profit. Congress keeps losing money, but our leaders keep getting raises. Imagine running your business at a loss, getting raises, and getting 3 months of paid vacations (called business trips).

Enough with the sarcasm and off to the good news. According to the National Retail Federation (NRF), Holiday sales are expected to decline by 1%. This is actually good news considering that last year Holiday sales dropped by 3.7%. On average, retail sales normally increase by 3.34% per year.

As a statistician, I believe in convergence towards the mean. I believe that we will make up for our 2008 and 2009 sales declines with greater than average sales increases in 2010 and mainly in 2011.

According to Ezra Pound, "Genius...is the capacity to see ten things where the ordinary man sees one."

According to me, successful entrepreneurs, business owners, and managers have the ability to see ten things where the bankrupt owner only sees one. Those of you who see, think and dream of all the possibilities are successful entrepreneurs. Those who keep the status quo are likely to fail. Thank you for reading our newsletter and sharing your thoughts and ideas. Happy New Year!!!

To see the latest NRF sales projections and forecasts, go to:

http://www.marketingcharts.com/topics/behavioral-marketing/2009-holiday-sales-expected-to-decline-1-10687/

• When Is It Time To Buy A New Computer?

Here's the short answer:

Every three years.

This answer applies to your retail store or business, your home computer, your kid's computer, your school computer or any other computer.

Computers are getting to be more like television sets. Hard drives going bad, your on off switch breaking off, memory getting fried, and other common computer ailments of the past are now very rare occurrences.

It's just that the technology changes so fast that using your older computer is like listening to records on a Victrola. For those of you who don't remember what that is, that was a record player before we had 8 track tapes followed by cassettes followed by DVD's which are now becoming extinct and replaced by MP's.

Using an older computer does not allow you to keep up with the newest software and technologies necessary to run your business. Computers are fairly inexpensive now compared to three years ago. Three years ago you may have skimped on buying a computer with lots of memory due to the costs. Memory is so inexpensive now that skimping on memory is a poor decision.

If your computer is more than three years old, it is likely to be much slower than when you first purchased it. It is not that the computer has slowed down, it is that all the software that you are using has been updated and requires more memory and resources in order to run efficiently.

Your kids need the extra memory to access their games, music, photos, and even things they need for school.

Having an older computer means that you must spend more time getting certain items to work properly. It means spending more money for minor repairs and enhancements. It could cost you $150 to add more memory to your older computer. You can purchase a new faster computer with the memory included for $500.

Many business owners complain about their software running slowly. It's not that your computer has slowed down. It's that you have updated Windows, your Antivirus software, your point-of-sale software, and whatever. Each of those products now use more resources than they did three years ago. Yes. They will still run. But, they will run more efficiently and effectively on a faster computer supplied with new, faster peripherals.

Now for environmentalists who feel that we are ruining the environment because we don't recycle, you have a point. However, according to Hewlett Packard (HP), a new computer will run 3 times faster while using half the electricity of your older computer. 

Go here to see the HP statistics:

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New computers are quieter. You always knew when an older computer was turned on. You could hear the fan. You need to look at your on off light to see if a new computer is working (or you may want to check the screen).

From a money point of view, your new computer is probably going to cost you about $1 per day. That same new computer is likely to save you about 50 cents per day in electricity, and another 50 cents per day in efficiency. Basically, your new computer is FREE.

If your computer has a problem and is 3, 4 or 5 years old, it's time to throw it out. If your computer has a problem and is less than 3 years old, it's probably best to fix it.

If you have a 5 year old computer that is running just fine and you don't need any new technologies, keep it. "If it ain't broke, don't fix it."

If you have an older computer that is running slow with less than 1 MG of RAM, you can add extra memory for about a $100. That extra memory can significantly speed up your computer. See our previous newsletter about speeding up computers at:

http://news.pcamerica.com/pcamericanewsletter347.html

To read other opinions, search Google for:

is it time to get a new computer

To read more about energy savings, go Mr. Electricity at:

http://michaelbluejay.com/electricity/computers.html

• I'll Never Buy Again (Unless It's 75 Percent Off)

We all know that this is one big problem.

Just as a personal aside, I have stopped buying anything from Macy's. I always feel that I am being ripped off. My 30% off coupons for regularly priced merchandise that is on sale but not including Polo, Seiko, house wares, makeup, designer jewelry, clothing made in China, and anything containing nylon, never seem to be valid in the store.

I actually have a magnifying glass to read all the small print. I just gave up with Macy's. I never seem to get that discount. It appears that the only thing I can get a discount on are their $200 wool sweaters that appear to be made from anorexic sheep.

Retailers have a problem. We have trained our customers to expect a discount. How do we remove the discount mentality?

Wal-Mart seems to have the answer. They are not discounting their clothing. They are offering high quality clothing at lower prices. Instead of emphasizing discounts, they are emphasizing value.

I was reading an interesting article by Patricia S. Pao. She's the CEO of a consulting firm that helps businesses increase sales and profits through innovative approaches.

Pao says that a successful business must make a commitment to providing newness and excitement at a great price. If you sell out of an item, don't reorder it. Capitalize on the appeal of scarcity. Keep moving forward. As retailers, "we need to position our products as 'want it' versus 'need it.'"

I'm not sure that this will work for a convenience store or a hardware store, but it does have some merit. My local hardware store keeps me coming back. They all manage to have some new type of item that sucks me in. Last week, I purchased a dozen $1.99 LED flashlights. I've seen those same flashlights selling for as much as $15.99 in stores such as Sears. This is a hardware store that manages to keep its prices and profits up by providing value and a few new, unique and great value items in the store. Once these items are gone, they are gone.

To read more about Patricia S. Pao, go to:

http://www.paoprinciple.com/home.html

There are some interesting articles under the "Press" section of the website.