One of the most common concerns that I hear when working with retailers is that “we need more sales!” Of course, but sales are just one component of determining overall profitability as “costs” can also dictate whether a retailer makes or loses money. Retailers are faced with many challenges these days and increasing sales is typically at the top of the list. I always suggest that our retail clients continuously review their strategies designed to increase sales, develop customer loyalty, and maintain the overall consumer appeal of their store. In my experience, increasing sales these days requires some creativity and a willingness to shed “legacy mindsets” and try new concepts and strategies. It also requires strong diligence, accountability, and continuous reinforcement of these concepts across all levels of your organization. Below are ideas we typically suggest to achieve increased sales for your retail entity:
Avoid “No Sales” – allowing a customer to leave your store empty-handed should be avoided at all costs. Whether you know it or not, a sale is always made in your store. You’ve either sold the customer a product or service, or you’ve sold them on a reason why not to purchase. A no-sale can originate in many ways…out-of-stocks, poor customer service, or the customer’s inability to find what they’re looking for in your store can all contribute to no sales. As such, we recommend training your employees to engage the customer every chance they get to ensure the customer is finding what they need, encourage them to teach customers how products/services can solve their problem, and how they contribute to the overall profitability of your organization. Of course, designing some creative incentives to promote this behavior and mindset always helps too!
Product Training – aside from “not being able to find a sales associate,” one of the main reasons why consumers choose to shop elsewhere is the lack of product knowledge by the employee. If there is one key advantage that traditional brick and mortar stores still have over the online segment is that they can connect the consumer through demonstrations, putting the item in their hands, and engaging in a discussion on the practical application, or ideas on usage. We recommend retailers take the requisite time to train their employees on how the products and services apply to your customer’s needs and encourage them to understand the product, how it’s used, and to share ideas and/or experiences with the consumer. This transfer of knowledge and engagement can create a loyal customer very quickly.
Future Empathy – one of the key ways that your retail establishment can be a trusted resource for information and be considered as a “go to” resource, is to have your store associates embrace the concept of future empathy. Future empathy first involves employees engaging the customer and understanding their core needs. From there, future empathy requires the associate to think of other products and/or services that the customer may need. For instance, if a customer is starting a tiling project, train the associate to suggest other products that may assist in the project such as grout, sponges, chalk line, and other accessories that the customer may need, or make their project easier. This mindset will accomplish two things…remind and/or inform the customer of what he or she may need and, increase sales via additional or “add on” products and supplies.
Big-Small Rule – embracing this concept is simple. Whenever an associate sells a large or big-ticket item, he or she should always suggest a smaller accessory item or part to complement the sale. Generally, the larger item does not contribute much to the gross margin however, the smaller items tend to have a higher gross margin. In addition, the last thing you want is for your customer to get home and realize they didn’t have all the parts and/or accessories to complete their project. When this happens, the customer could decide to purchase the remaining items from a competitor which essentially equals a lost sale and a lost opportunity to connect with your customer.
Key SKU’s – ensuring you are in stock on your most important SKU’s is key. Running out of the core SKU’s is sometimes called “project killers” and can contribute to abandoned cart syndrome when you’re out of stock on these items. As such, we suggest retailers understand their “core” items and strive to keep these items in stock to the extent possible. For home improvement stores, these items are 2 X 4’s, 4 X 8 drywall, plywood, light bulbs, tile, mortar, concrete, and mulch. For food retailers, these items are bread, milk, eggs, sugar, flour, and bananas. Consider asking yourself “what are my project killers?” and “how do I ensure that my core products are always in stock?”
The 80/20 Rule – the 80/20 concept in any retail organization generally holds true. Essentially, 80% of your revenue and/or profits are derived from 20% of your products and/or SKU’s. What this should tell retailers is that these key SKU’s should be promoted, prominently displayed, and understood within your store by all sales associates so they know what they should be promoting with your customers. It’s worth taking the time to understand what these SKU’s are for your organization and how your retail entity can capitalize on maximizing their sales velocity.
Summary
Again, these unprecedented times have created a landscape of uncertainty however, the aforementioned concepts and strategies should still hold true and deliver success no matter what a pandemic might present to retailers. As such, we suggest our retail clients continue to embrace these concepts and fully understand the impact that each can have on increasing sales.
For more information or to learn how our retail professionals can assist your organization, please contact Tim Reynolds at 828-322-2070 or at tim@dhw.net.