Business news posted on August 11th reported Australian music store JB Hi-Fi having a 45% profit jump in 2009.

Now, lets just look at that statement in context. 45% profit jump in just nine months. And not just ANY nine months, but the nine most horrifying months in recent Australian and global economics. The nine months that have seen every other retailer issue profit warnings, make substantial losses, or in the case of major competitor, Strathfield, collapse into administration back in January 2009.

Sure, the comparison between JB and Strathfield isn’t exactly like for like – JB offers a broader range of goods than Strathfield did/does. But there are enough similarities to be able to offer some key learnings of what to do, and what not to do between the two stores. Personally I shopped in a number of the JB stores in Queensland, and a couple of the Strathfield stores too. I’ve also visited one or two of the Wow Sight & Sounds too, which will also be worth a mention later on.

So what have JB done well? Well, a number of things, but these are the key areas they succeeded in that will offer a lesson to other retailers.

1. The brand is strong. An obvious statement, but for those who don’t understand branding or investing in brand awareness, JB are a great example of how a strong brand makes more profits.  They invest in their image, the tag-line – the famous ‘JB, you’ve done it again’, the look and feel and their communication. Brochures they produce are visually engaging, religiously consistent and packed full of things the consumers want to buy, rather than the manufacturers want to sell (although, that’s probably not the case but as I always say, perception is reality). Even the fonts they use in promotions are cartoony, appealing to the right people
2. They understood their target market. A certain demographic goes into buy DVDs, audio equipment, plasma TVs and so on. They researched that demographic and they talked to them. They talked to them
3. They’re experts. And I mean experts. They employ people who know what they’re talking about and know the items that they’re selling. And if they don’t, they fake it pretty well. Pick a random CD out of the racks and take it to the counter and you can pretty much guarantee the person taking your cash will have a comment about the quality of the band that you’re buying.
4. JB look carefully at their locations. High volume traffic passing them by is vitally important to the success of their business, be it on main roads or in the middle of major shopping centres.
5. Much has been mentioned about store layout too. Whilst it never seems to be the most pleasent of shopping experiences, many commentators have noted that its hard to leave a JB store without having bought anything. Once you’re in, they’re not going to let you leave with taking some of your cash! WoW Sight & Sound seem to operate the same concept but the environment in their stores is horribly enclosed and personally I feel very anti-shopping.
6. They looked at social networking, how it worked and they killed it. Actully, they didn’t. They have let that one slip. Believe it or not, their Facebook fan page has 15,000+ fans. Yes. 15,000+. That’s a lot of people. And they’ve posted two status updates. 15,000 people are waiting to hear from them and they’re silent! Maybe they don’t have control of that site? But either way, FAIL.

All in all, the JB story is one worth listening too. When your marketing department are delivering a ROI like JB’s have then you should be patting them on the back or giving them some sort of hefty bonus.

Go back to your business and look at the following things: location, understand your target market, be experts, check your location, layout your goods properly (either in retail or online) and invest in social media. Get those right, and you’re on the right road to emulating JB’s success.