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JUST ABOUT

everything
A RETAIL MANAGER
NEEDS TO KNOW

Just about Everything a Retail Manager Needs to Know


By the same author

The Modern Nurseryman


co-authored with Alan Toogood, Faber & Faber, London, 1981
The Garden Centre Manual
co-authored with Ian Baldwin, Grower Books, London, 1982
The Nursery and Garden Centre Marketing Manual
Reference Publishing Company, Auckland, 1992, 1994, 1994
John Stanley Says, Volume 1
Reference Publishing Company, Auckland, 1991
John Stanley Says, Volume 2
Reference Publishing Company, Auckland, 1995
The Complete Guide to Garden Centre Management
Ball Publishing, Chicago, 2002
Think For Your Customer
co-authored with Linda Stanley, Lizard Publishing, Perth, 2005

As a contributing author
Confessions of Shameless Internet Promoters
Success Showcase Publishing, Tempe, 2002
The Modern Public Library Building – Managing Planning
Libraries Unlimited Press, Westport, USA, 2002

Just about Everything a Retail Manager Needs to Know


JUST ABOUT
e ve r y t h i n g
A RETAIL MANAGER
NEEDS TO KNOW
John Stanley

Kalamunda, Western Australia

Just about Everything a Retail Manager Needs to Know


Copyright © 2005 John Stanley

Published 1999, 2003

Just about Everything a Retail Manager Needs to Know by John Stanley


is a companion volume to Just about Everything a Manager Needs to Know
by Neil Flanagan and Jarvis Finger

Series Editor: Jarvis Finger

All rights reserved. No part of this publication may be reproduced, stored


in a retrieval system, or transmitted in any form or by any means, electronic,
mechanical, photocopying, recording, or otherwise, without
the prior permission of the copyright owner.

Published by Plum Press, PO Box 419, Toowong, Queensland, 4066 Australia

National Library of Australia


Cataloguing-in-Publication data:

Stanley, John.
Just about everything a retail manager needs to know.
Includes index.
ISBN 0 9577362 0 7.
1. Retail trade - Management - Handbooks, manuals, etc.
2. Personnel management - Handbooks, manuals, etc.
3. Executive ability - Handbooks, manuals, etc. I. Title.

381.1068

Just about Everything a Retail Manager Needs to Know


FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS
v

JUST ABOUT EVERYTHING A RETAIL MANAGER NEEDS TO KNOW

Foreword
The prevailing nature of the The structure of the publication
international 'global village' economy provides for easy and prompt
is stimulating among people a comprehension of a diverse range of
heightened sense of enterprise and topics. Readers will be encouraged
entrepreneurship. Self determination by the challenges inherent in the
is appealing in an era in which long- questions which are posed, and
term security appears to be a thing of reassured by the guidance provided
the past. in the nature of the answers given.
At the beginning of the twenty- It is an original and innovative
first century, there are some 1.2 style which involves the reader in the
million businesses operating in learning process. The approach will
Australia, with a workforce of 8.5 foster personal development.
million. Significantly, the retail sector John Stanley is justifiably an
is the largest employer in the internationally recognised authority
marketplace, reflecting its on the broader discipline of retailing,
importance to the nation and, with specific skills in merchandising.
indeed, to the world. He brings to focus in this book his
Government initiatives are widespread first-hand experience in
fostering and promoting financial a manner which will accelerate
independence for all. However, learning. That will impact directly on
neither legislation nor regulation will the bottom line.
ensure success. The currency of the details
Common characteristics of most provided in the publication imply it
retail market segments include should be included in the
aggressive competitors, product management and staff development
parity, rampant discounting, short libraries of all retail organisations,
planning lead-times, and wafer-thin large and small. It should be, and
margins. Risk tolerance is low and doubtless will become, a constant
the scope for errors is limited. Minor reference source as differing
miscalculations can be terminal. circumstances and challenges arise.
Retail managers need external John Stanley is to be applauded
assistance, expertise, experience, and for writing the book. The reader will
creative input. Information sources be rewarded by making an
abound but, sadly, many are general, investment in securing this
generic, and lack local retail focus. invaluable resource.
This latest book by John Stanley is
timely and fills a void which is
conspicuous to many practising
retail managers. Retailers do not
have the time nor the inclination to
invest in researching the marketplace Barry Urquhart
for credible consultants and Managing Director
publications. In this book they find Marketing Focus, Perth
both.

Just about Everything a Retail Manager Needs to Know


vi
FOREWORDCONTENTS PREFACE TESTIMONIALS AUTHORS

JUST ABOUT EVERYTHING A RETAIL MANAGER NEEDS TO KNOW

How to turn your customers


Contents into lifetime customers
How to improve your customer
...................... 32

service
................................................... 34
How to develop a customer
loyalty program .................................. 36
How to conduct a customer survey ...... 38
How to set up a customer forum ........... 40
FOREWORD ............................................ v How to increase your customer
PREFACE .................................................. x .......................................................
base 42
How to handle those complaints ........... 44
TESTIMONIALS ..................................... xii
How to ensure your team
is customer friendly ............................ 46
How to profit from your
PA system ............................................ 48
Winning over How to close a sale .................................. 50
your Customer How to gift wrap ..................................... 52
How to select and fill
How to attract the passing a shopping....................................
bag 54
customer into your ......................
store 2 How to farewell the customer ............... 56
How to promote your business
to children
.............................................. 4
How to promote your business
to Generation X customers .................. 6 Promoting
How to promote your business
to young adults..................................... 7
your Products
How to promote your business
to baby boomers .................................... 8 How to select the right media for
How to promote your business advertising
........................................... 60
to the older generation ....................... 10 How to use a direct mailer to
How to develop quality services promote product .......................
sales 62
for special customers .......................... 12 How to use ‘how-to’ leaflets
How to communicate your beliefs to sell more product ........................... 64
to customers
........................................ 14 How to plan an advertisement .............. 66
How to make sure your team How to write advertising copy
members look professional ............... 16 that...............................................
sells 68
How to make a positive How to promote advertised lines .......... 70
impression in ten seconds ................. 18 How to conduct a general product
How to use positive body language promotion
............................................ 72
to make the best impression .............. 20 How to use demonstrations
How to train your team to smile ........... 22 to sell product
...................................... 74
How to greet a customer ........................ 24 How to get the most out of
How to communicate effectively your booth at a trade show ............... 76
—and make the...........................
sale 26 How to produce signs that
How to sell features and benefits .......... 28 sell products
........................................ 78
How to remove a customer’s How to use a ‘cut case’ display ............. 80
doubt—and make the................. sale 30 How to use a dump bin .......................... 81

Just about Everything a Retail Manager Needs to Know


WINNING OVER PROMOTING MANAGING MANAGING vii
YOUR CUSTOMERTHE PRODUCT YOUR STOREYOUR BUSINESS

How to dummy-up your displays ........ 82 How to introduce texture into your
How to display products displays
.............................................. 127
to capture customer interest .............. 84 How to manage product placement
How to display products on pallets ...... 86 in your store ...................................... 128
How to maximise sales using How to use vertical merchandising
the floor of your store ........................ 88 to maximise your.....................
sales 130
How to build a profitable How to use horizontal merchandising
power product display ...................... 90 to maximise your.....................
sales 132
How to maximise your sales How to manage relays .......................... 134
using hot spots/end..................
caps 92 How to face products correctly ........... 136
How to use a wall of value ..................... 94 How to manage your product
How to become famous range
................................................... 138
for something ...................................... 95 How to get the most out of
How to manage cold spot selling best sellers
.......................................... 140
positions
............................................... 96 How to manage slow-moving
How to manage shelf filling ................... 98 products
............................................. 142
How to create theatre How to manage counter displays ....... 144
in your store
...................................... 100 How to manage stands
How to prepare your staff provided by suppliers ...................... 146
for the holiday..........................
rush 102 How to manage perishable
How to maximise your holiday products
............................................. 148
promotion
.......................................... 104 How to manage shopping trolleys ...... 150
How to sell concepts not products ...... 106 How to write signs that sell ................. 152
How to introduce a new How to manage signs in your store .... 154
product.......................................
line 108 How to write a known value sign ....... 156
How to set up a shop window ............. 110 How to write a non known
How to create movement value...........................................
sign 157
in your displays ................................ 112 How to use signs effectively ................ 158
How to use background music
in your store ...................................... 160
How to use aroma in your store .......... 162
Managing How to make best use of colour for
your Store effective merchandising displays ... 164
How to make best use of colour
for the store exterior ......................... 166
How to maximise How to make best use of colour
your customer ..........................
flow 116 for the store interior ......................... 168
How to improve your
‘first impression’ image ................... 118
How to improve your
‘last impression’ image .................... 120 Managing
How to keep your store clean .............. 122
How to walk the floor and your Business
talk to customers ............................... 124
How to manage your aisles .................. 125 How to develop a retail business
How to make sure your displays strategy
............................................... 172
are................................................
safe 126 How to benchmark your store ............. 174

Just about Everything a Retail Manager Needs to Know


viii FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS

JUST ABOUT EVERYTHING A RETAIL MANAGER NEEDS TO KNOW

How to maintain standards How to get the best value


in your store ...................................... 176 out of Generation X employees ...... 212
How to work with percentages ........... 178 How to develop a mystery
How to work out mark up shopper program .............................. 214
versus gross profit ............................ 180 How to maximise the benefits
How to set prices that sell products .... 182 of team meetings ............................... 216
How to increase your prices ................ 184 How to train the team ........................... 218
How to set an advertising budget ....... 186 How to develop a good
How to maintain a competitive relationship with the local ..... press 220
.....................................................
edge 188 How to write a customer
How to develop sales promotions ...... 190 newsletter
........................................... 222
How to manage non price sensitive .......... How to become a sponsor .................... 224
products ............................................. 192 How to keep shrinkage
How to ‘open price’ under control
..................................... 226
your products .................................... 194 How to reduce shoplifting ................... 228
How to buy effectively .......................... 196 How to apprehend a shoplifter ........... 230
How to manage stockturns .................. 198 How to reduce credit card
How to monitor departmental and cheque fraud .............................. 232
performance ...................................... 200 How to handle a hold-up ..................... 234
How to develop open buy policy ........ 202 How to deal with emergencies ............ 236
How to increase your average How to develop and manage
sale—and increase your profits ...... 204 your store safety standards ............. 238
How to calculate the margin of How to monitor safety
safety for your business ................... 206 in your store
...................................... 240
How to grapple with absenteeism ...... 207
How to recruit effective GLOSSARY ............................................ 242
salespeople......................................... 208
REFERENCES ....................................... 248
How to interview potential
salespeople......................................... 210 INDEX .................................................... 250

This volume contains a useful cross-referencing feature.


In the black bar at the top of each page, readers are referred to
related topics in Just about Everything a Retail Manager Needs to
Know (See also:…) and in its companion volume Just about
Everything a Manager Needs to Know (Vol. 1: See…).

Just about Everything a Retail Manager Needs to Know


MANAGING MANAGING MANAGING INDEX
ix
AUTHOR
YOURSELF YOUR STORE THE BUSINESS

About the author

John Stanley eos on retailing for clients.


After leaving school, John Stanley be- In the new millenium, retailing is
came the course manager at Merrist going to go through some major
Wood College in the United Kingdom. changes. John’s international back-
Since then he has been involved with ground, working with multinational
many different types of retailing. He and individual one-site companies in
has worked in and consulted to super- Europe, America, Africa, Asia, and Aus-
markets, garden centres, pharmacies, tralasia, allows him to pick up on and
liquor stores, service stations, and hard- develop new ideas and trends rapidly.
ware stores. He uses these gifts when working
Since 1976, John Stanley has closely with clients in their own en-
been much in demand as a con- vironment, advising and encourag-
sultant, with his expertise ing them to profit and grow from
taking him to clients in over his wealth of experience and in-
15 countries. He is also a credible expertise in the area of
highly sought after key- retailing.
note speaker and motiva- This book brings together
tor at conferences and John’s skills in one useful for-
workshops around the mat that will show every re-
world. In addition, John has tailer how to benefit and
written several industry- raise their level of pro-
specific books. fessionalism, and im-
He is also a regular prove their profit-
contributor to written and ability by tapping
audio magazines, and has into John’s talents
produced a number of vid- and experiences.

Just about Everything a Retail Manager Needs to Know


x
FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS

JUST ABOUT EVERYTHING A RETAIL MANAGER NEEDS TO KNOW

Eight reasons why every retail


manager will treasure this book
Every so often something really useful comes along. And, for retail
managers, this book is it. By distilling just about everything relating to
successful management practice into practical and immediately
accessible ‘how-tos’, the book provides answers to your retail
challenges and questions in straightforward language with the
minimum of fuss. If you, as a retailer, needed to own just one reference
tool, then this book is it! Flick through the pages. If you’re still not
convinced, then consider these points…

This book provides ideas when time is limited.


1 on retailing —quickly. On-the-job experience. This is a
Retailers are born. I've been told this wonderful teacher, but it can be
many times. Successful retailing is a mistake-laden, and you only get it
mix of personality and knowledge. It from one perspective—and it does
may be difficult to provide you with take time… a lifetime in some cases.
personality skills via a book, but this Travelling and looking overseas. This is
volume can certainly provide you great fun, but expensive—and, again,
with knowledge and management very time-consuming.
expertise.
It would be wonderful if all the
Retailers normally obtain their
above could be condensed into one
skills via:
quickly-accessible tool. This
Retail courses. These are valuable publication is just that, a working
opportunities to obtain knowledge— tool, based on a wealth of retailing
yet many retailers find that they are experiences from around the world.
unable to allocate time to the pursuit
of knowledge in this way. This book provides
Associations. Many retailers belong to
trade associations and use these as
2 proven retail ideas.
This is not a theoretical book. It is
opportunities to gather information. based on practical ideas, presented in
But, you may not meet all that often a practical way. Retailing is about
and you usually meet with your understanding ‘grass roots’
competitors—which means principles and this book addresses
information may not be spread as these in an easy-to-understand
freely—or as quickly—as you would format that will help you develop
like. your career and your business.
Retail books. I have built up a library
This book offers ideas from
full of retail books. The information
is there somewhere but retrieving it
can be quite a challenge, especially
3 all aspects of retailing.
If you work in a supermarket,

Just about Everything a Retail Manager Needs to Know


WINNING OVER PROMOTING MANAGING MANAGING xi
YOUR CUSTOMERTHE PRODUCT YOUR STOREYOUR BUSINESS
○ ○ ○ ○ ○ ○
○○ ○○ ○○ ○○ ○○ ○○ ○○ ○○ ○○ ○○ ○○ ○○ ○○ ○○ ○ ○ ○ ○ ○ ○

hardware store, fashion shop, florist


Management Memo
help myself realise my sales goals bya
or garden centre, you will find ideas
in this book that will help you I catching myself doing something right.
improve your skills. I have had wide
experience in various aspects of This book is an essential
retailing and have brought these
together in this book. Whether you
6 tool for the new or
experienced retailer.
are building a display indoors or This book provides ideas, even for
outdoors, in a small independent the most experienced retailer. None
store or in a multinational mass of us can learn all the skills of
merchandising store, you will find retailing at one time and be
this book addresses your particular proficient at them all. This book
needs. helps you develop your existing
strengths and improve your
This book is so easy
4 to use.
This is a companion to the bestselling
weaknesses. It provides ideas and
advice for when you have a problem
that needs solving.
Just about Everything a Manager Needs
to Know by Neil Flanagan and Jarvis This book should be
Finger. One of the reasons for that
book's huge success was its easy-to-
7 shared by your team.
Here is a book that won't sit on your
read ‘how-to’ format. shelf gathing dust. It is a tool your
Just about Everything a Retail whole team will refer to constantly.
Manager Needs to Know keeps to the Leave a copy in the staff room and
same successful format. This means let your team find a solution in it to
it is not a book that is meant to be problems as they occur. It can help
read from cover to cover, but rather a you improve the retailing skills of
book to be dipped into whenever your whole team.
you need practical help as a retailer.
This can become your

5 This book will help you


as a student of retailing.
8 total reference library.
In writing this book and its
In retailing, you never stop learning. companion Just about Everything a
We are all students of retailing. What Manager Needs to Know, the authors
we need are strategies, ideas and have read hundreds of books and
‘how-to’ tips we can use to keep extracted the valuable information
developing our business and our from them for you. This means these
careers. volumes can literally save hours
One of the aims of this book is to upon hours of valuable time and
help you, as a continuing student of money for you. The two volumes
retailing, to acquire the skills you provide a powerful tool based on the
need easily and in a format to help experience of many world experts,
you absorb the information with the and presented in an extremely
minimum of fuss. accessible and usable form.—J.S.

Just about Everything a Retail Manager Needs to Know


xii
FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS

JUST ABOUT EVERYTHING A RETAIL MANAGER NEEDS TO KNOW

Here's what people are saying


about this book…

In writing this book, the author aimed to provide a usable tool for
retail managers and students, a publication that would focus on
the day-to-day nuts-and-bolts of retailing and be free from the
distraction of theories and concepts. The extent to which the
author was successful in his quest is reflected in the comments of
the following leading retailers from around the world…

M anaging a retail supermarket


business in today’s competitive
environment, you must be ready to
seize on a new idea, and then enhance
these thoughts to increase retail sales. He
is truly amazing. Every manager who is
tackle a broad range of demands. Having serious about their career and their
the tools to enable you to do this is business should buy John’s latest book.
essential. Just about Everything a Retail Anne Sugden
Manager Needs to Know is such a tool. It Anne Sugden Enterprises
will give you the answers you are Haslingdon, UK
looking for, without the need for hours of
reading. Identify your problem, and you
can find your solution in seconds with a J ohn Stanley has done it again: Just
about Everything a Retail Manager Needs
to Know is the exquisite distillation of his
step-by-step strategy for implementing
that solution. For the hands-on owner/ worldwide experience in retailing. We
operator, it is the most valuable know John and his work as a coach,
management tool available. trainer and adviser—clear, direct and
Vince Belladonna focused on achieving practical results.
Dewsons Supermarket, Here now is the Retail Bible we all have
Wembley, Western Australia been waiting for. Start your day reading
a passage and practice it during the day.
The results will be overwhelming and
I have known John Stanley for a
number of years, first as a speaker,
then as a colleague. I recently toured
your personal and professional life will
benefit from it.
Australia with him on a workshop tour. Just do it!
John is a brilliant speaker, vibrant and Johan Van Wambeke
Manager Benelux
entertaining, and his knowledge on
EK Grosseinkauf, Belgium
retailing is awesome. This book will be a (EK Grosseinkauf is one of the largest
must for every manager. He has written non-food co-operations for
in a style that is easy to read, easy to independent retailers in Europe)
understand and, most importantly, easy
to put into action.
I have rarely seen a retail book which
goes into such detail on ‘How to’. It is as
A s a team of communications
consultants, Image 7 Group is
frequently communicating to retailers or
if he were in the store directing their customers. Just about Everything a
operations. Retail Manager Needs to Know fills the gap
John Stanley has the ability to walk between theory and practice. Most retail
around and immediately spot a trend, managers have developed their skills on-

Just about Everything a Retail Manager Needs to Know


WINNING OVER PROMOTING MANAGING MANAGING xiii
YOUR CUSTOMERTHE PRODUCT YOUR STOIREYOUR BUSINESS
○ ○ ○ ○ ○ ○
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

the-job by observation or through plain Management Memo


old trial-and-error. Just about Everything a
e judge ourselves by what we feel
Retail Manager Needs to Know is a wealth
of knowledge condensed down into W capable of doing while others judge
us by what we have already done.
easily digestible, bite-sized pieces. It is —Henry Longfellow
designed to be a handy guide which is a
ready reference when the retail manager
strikes an emergency. I believe this book
should be on the bookshelf of every shop
regardless of size or products sold.
There is no doubt... this is the best book
J ohn Stanley’s latest publication is
definitely for people who don't like
reading books—which is just as well
of it’s kind in the world. because most of us in retailing rarely find
Brad Entwistle the time to read all the books that we
Managing Director would like to. That’s why the format
Image 7 Group Pty Ltd, used in Just about Everything a Retail
Western Australia Manager Needs to Know is so useful for
managers.

A t Caltex Australia, we are


committed to providing the best
possible for our store managers and
It is clearly indexed and cross-
referenced which allows you to hone in
on the topic you want to know about
franchisees, as we strive towards the quickly and easily. This might be on how
highest standards of retailing. When I to write signs that sell, how to face
first discovered the Flanagan & Finger’s products correctly, how to set up a shop
companion publication, Just about window or even something as simple as
Everything a Manager Needs to Know, I how to use the PA system effectively in
immediately ordered one for each of our your store. There are a whole multitude
managers. Having just read the latest of topics to choose from and the
book in the series, Just about Everything a information given is simple, straight
Retail Manager Needs to Know by John forward and therefore easy to apply.
Stanley, the first item on my to-do list is It’s a wonderful format, tailor-made for
to get a copy into the hands of every the retail industry. Every manager must
retailer in our network. It won’t just keep have a copy of this book.
us ahead of our competitors; it will keep Jurek Leon
us ahead of our customers. Terrific Trading
Robert Bentley Perth, Western Australia.
Retail Learning & Development
Executive
Caltex Australia
Perth, Western Australia
J ust about Everything a Retail Manager
Needs to Know is definitely not a book
for the bookshelf. This is a book which
will hold its place on any retail
I have known John Stanley for many
years and have watched his expertise,
knowledge and continuous growth in the
manager’s desktop. You will have to
keep repairing those dog ears because it
will get so much use. It offers an easy-to-
area of retail selling. I am proud to say he access format with all the necessary
did it the hard way. He learned through keypoints for managers contained in a
practical, hands-on experience. In clear and concise manner.
reading John’s book, you will gain Today’s manager constantly needs to
wisdom that will help you not only keep up with the many changes that
succeed today but for years to come. occur in business and, in most cases, has
Bobbie Gee
Author: Creating a Million Dollar Image little time to read large volumes of
for Your Business literature. This is where this book really
Bobbie Gee Enterprises comes into its own. Its simple format
Laguna Beach, CA USA means you can just go for the key topic

Just about Everything a Retail Manager Needs to Know


xiv FOREWORD TESTIMONIALS
CONTENTS PREFACE

JUST ABOUT EVERYTHING A RETAIL MANAGER NEEDS TO KNOW

that you require, gain an understanding, been invaluable in the various stages in
and put that understanding into practice our organisation’s development.
almost immediately. I highly recommend This book highlights many of the
this book as it offers a no-nonsense leading best practices gleaned from some
practical approach to management— of the best retail organisations around the
ideal for today’s retail manager. world. It will be a useful reference
Bill Richardson resource for retailers in all positions of
Credit Services Manager Customer Service, Marketing, and
Australian Liquor Marketers (WA) Management.
& Johnson Harper
Perth, Western Australia I encourage you to challenge yourself
and your team to improve your business

M anaging the detail of retail, that


elusive, misunderstood and often
missing factor in many modern stores,
using John’s innovative ideas.
Trevor Cochrane
Category Manager
becomes all-clear in John Stanley’s latest Bunnings Warehouse
Perth, Western Australia
handbook Just about Everything a Retail
Manager Needs to Know. It’s not what we
do, but what we forget to do that
customers pick up on and it’s vital that
T his book is a wealth of information,
covering all topics pertinent to retail,
helping you to get it right the first time.
guidelines are so accessable and within It's easy-to-read, precise and
arm’s reach. Long overdue! comprehensive without being too
Bob Edwards
Managing Editor technical. The author's experience and
Commercial Horticulture magazine knowledge of the retail industry is
Auckland, New Zealand. second to none. His enthusiasm and
communication skills make him the ideal

I n my travels and speaking


engagements throughout Canada it
will be great to finally have a tool like
person to have written this book.
Andrew Heaphy
Marketing Manager
Just about Everything a Retail Manager The Plaza Shopping Centre
Needs to Know to recommend to many Palmerston North, New Zealand
retailers who are looking for a solid
resource.
Pete Luckett
Pete Luckett Marketing
T his book is a must for anyone in the
'people' business… I particularly
recommend its suggestions for
Nova Scotia, Canada developing customer relations and
promoting product. A great investment.
J ohn Stanley is a professional retailer
with worldwide experience. The blend
of John’s experience with the structural
Noreen Emery
Principal
Speech Dynamics
approach of the book gives the reader the Perth, Western Australia
opportunity to try things that have
worked around the world.
Applying his ideas into your day-to-
day organisation will give you the best
D uring the past decade, we've learnt
'just about everything we needed to
know' from John Stanley to develop our
opportunity for success. business selling plants as a successful
Arthur Trindall retail garden centre… We rate his advice
General Manger Operations
Foodland Associated Limited
as invaluable in our quest for excellence
Western Australia in retailing. Now it's here in his new
book. It will have pride of place on our

J ohn Stanley has consulted in many


areas such as retail floor layout,
merchandising, point of sale material,
bookshelf.
Jackie Hooper
Zanthorrea Nursery
and staff training. His expert advise has Perth, Western Australia

Just about Everything a Retail Manager Needs to Know


MANAGINGMANAGING MANAGINGMANAGING INDEX xv
YOUR CUSTOMERS YOUR PRODUCTS
YOUR STORE YOUR BUSINESS

And here's what people are saying


about the companion volume…

The essential companion volume to Just about Everything a Retail


Manager Needs to Know is Just about Everything a Manager
Needs to Know by Neil Flanagan and Jarvis Finger. This bestseller
contains over 200 additional strategies and solutions to help you
grapple with everyday general management problems. Winner of
the Australian Institute of Management's Booksellers' Book of the
Year Award, this volume has been widely acclaimed as one of the
most practical and usable management tools available…

Our all time bestseller! A book that Exactly the sort of desk-side reference
should be on every manager's bookshelf most managers secretly pray for.
from the first time manager to the CEO. Australian Institute of
Glenys Throssel, Manager, Management
Australian Institute of Management
Bookshop, Queensland One of the best investments I've ever made.
Gayle Ralston, Managing Partner,
This is the best management book of its Australian Medical Services &
kind that I have read. Personnel
Jim Kennedy AO, Chairman,
Queensland Investment …a constant and useful reference for
Corporation busy managers interested in staying
effective. It will make an impact
Here's an amazing litany of advice. because it is full of practical advice based
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magazine Professor Michael Hough,
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spread across the world. A wonderful tool for any business.
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Morgan & Banks, Sydney Whittaker Macnaught Pty Ltd

Just about Everything a Retail Manager Needs to Know


Just about Everything a Retail Manager Needs to Know
WINNING OVERMANAGING PROMOTING MANAGING INDEX
YOUR CUSTOMERS YOUR BUSINESS
YOUR STORE YOUR PRODUCTS 1

Winning over
your Customer
Take time to make friends
before trying to make customers.
Elmer Wheeler

Just about Everything a Retail Manager Needs to Know


FOREWORDCONTENTS PREFACE TESTIMONIALS
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2
ATTRACTING CUSTOMERS See also: 18, 164

How to attract the passing customer


into your store

Your retail business relies on attracting customers for, without


customers entering your store, your opportunities for making a
sale are extremely limited. Potential customers, of course, pass
by dozens of retailers each day. Your aim is to be one of the
few they notice—you have to attract them into your premises.
You need to stand out from the rest. It’s all about image, about
how other people see your business—and first impressions count
a great deal in this regard…

Assess your building Pay attention to your


1 before making changes. 2 facade’s colour.
A building’s colour can enhance the
Have you had a good look at your
existing building from the outside viewer’s experience or provide an
lately? Is it appealing? Can its facade objectionable episode which may
be improved, made more attractive? result in some customers actually
View your external facade from refusing to walk through your door.
the outside—through the eyes of a As a general rule, walls should be
customer. It can be a revealing painted in a lighter colour and
exercise. Consider the entrance, gutters, doors and window frames in
signage, windows, lighting, cobwebs, a stronger colour. When selecting
peeling paint, external fences, colours consider these points:
driveway, signs (are they drooping, • Single colour buildings are ideal if
faded, covered with vegetation), your signage and shop window
pathways, plants, shade, seating, displays are dramatic.
litter, the carpark—there is much to
• Buildings of contrasting colours
consider.
will stand out—but make sure the
Decide what should be kept, or
colours enhance the products you
cleaned, or changed. Natural
sell.
materials, such as bricks, limestone
and tiles require very little • Heritage colours may be required
maintenance and for this reason are to beautify an older streetscape.
wisely retained in their original state. • As a general rule, use bright
Do certain areas need repainting? colours in small areas only.
Walls in particular may need View your building as part of the
attention if they are to enhance the entire streetscape. Your aim should
street and make your business stand be to enhance the whole block of
out. Will the addition of an awning shops as well as your business.
or verandah provide shelter for
customers and passers-by? Is there a
need for seating?

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3
Vol. 1: See 248, 388, 390

Consider landscaping
Management Memo
3 the front of your premises.
Ray Kroc, the McDonald’s
O ne day while on his way back to the
office from an important lunch in the
r of
best restaurant in town, Ray Kroc, owne
entrepreneur, was adamant that the 's chain in the Unite d State s,
the McDonald
few
exterior of his stores be landscaped asked his driver to pass through a
ed
to the highest standard possible. His McDonald's car parks. In one he spott
ht up in shru bs along the oute r
view was that customers would papers caug
judge the cleanliness of the store to a fence.
He immediately went to the nearest pay
large degree on the level of its phone, called his office to get the name of
the
landscaping. McDonald’s stores rely ager to offer to
manager, then called the man
on a large amount of perennial help him pick up the offen ding rubb ish.
in
foundation plants and very few Both the owner of the McDonald's chain
suit and the youn g
seasonal plants to create the right his expensive business
met in the car park and got down on
image. On the other hand, in the manager
r.
United Kingdom, English pubs rely their hands and knees to pick up the pape
As managers we are frequ ently more in-
on seasonal plantings to create a terested in the activity inside our busin
ess
more colourful image. These need ing's outsi de ap-
premises than in the build
more care, and do much to make the appe aran ce of your build ing
pearance. The
pubs stand out from other premises. and its surrounds is at the front line of your
organisation's public image—as Ray Kroc
1
Make your external signs was well aware.
4 meaningful and
readable.
On the outside of your premises, you Don’t forget to include,
need to state who you are (and most prominently, a street number to
of us need to say what we do— ensure the Post Office and searching
exceptions being such well known customers can readily identify your
organisations as McDonald's, Shell premises.
and Harrods).
Advertise your
Buildings need signs that are
clean and simple. Signs usually
include words, trademarks, and
5 company—not others.
Remember: you’re selling your
logos, and they should be displayed store—your brand, your business.
in keeping with the tone of the street Do not minimise your organisation’s
and overall image of the business. importance, as many businesses do,
They must be readable, using a by promoting the brands of other
typeface that can be easily seen by organisations. Too often a retailer
pedestrians and people passing in will do an excellent job on the facia—
vehicles. Focus on simplicity and and then spoil it by putting up the
boldness—over-decorated signs are signs of their suppliers. Such signs
often not read. The total size of the should go outside that supplier’s
sign will be influenced by local place of business or next to the
council regulations as well as supplier’s products in your store—
company standards and financial not on the outside walls of your
considerations. premises.

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4
CHILDREN SHOPPERS See also: 100

How to promote your business


to children

Children are arguably the most influential group you could target as
a retailer. Importantly, they are frequently the key player when it
comes to decision-making within the family. For example, many
families eat at McDonald’s Restaurants simply because the child has
been the decision maker. Yet, often, many businesses fail to
encourage children as customers; indeed, at times they go out of
their way and actively discourage them. But children, as customers
of tomorrow and decision makers of today, are a vital focus group…

Develop a policy Provide play equipment.


1 and keep to it. 3
Children between the ages of four
Take steps to develop a policy on
how your business will deal with and seven can quickly become bored
children. Your policy will depend on when shopping with parents, and
what you sell. Some retailers will can become a nuisance in the store.
look on children as a major target, They need entertaining and you may
while others will deliberately, and need to consider the provision of a
justifiably, discourage this group of safe and secure play facility, even the
shoppers. Implement the policy, by employment of a competent,
ensuring all your team members are accredited child minder. A fear for
familiar with it and consistent in many parents in play groups is that
implementing your standards. someone will snatch their child. To
allay such fears, some larger
Introduce baby-friendly
2 facilities.
businesses take a polaroid photo of
parent and child as they arrive. This
Many customers, of both sexes, will gives you and the parent a passport
at times want to come shopping with to safety when the parent returns
babies. For this group, you may: from shopping—and a present you
• provide changing facilities in a both- can give them when they leave.
sex toilet.
• allocate parking spots where customers
Consider links
with prams can park, load and unload
safely. Many retailers combine their
less-abled and pram-parking spots.
4 with local schools.
Eight- to twelve-year-olds have a
• ensure that your company policy major influence on where their
requires staff assist customers in getting parents shop. They can also be a very
from the checkout point to their cars
profitable target group of customers.
with their pram, pushchair or stroller,
and purchases. A word of warning: Many retailers—supermarkets,
a pram or stroller is an ideal place to sports stores, garden centres,
store stolen goods, so your policy may hardware stores, and computer
need to take account of this. shops—have joined with their local

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YOUR CUSTOMERS YOUR BUSINESS
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5
Management Memo
school as sponsors of events, and
advertise in school newsletters. They
have become involved on special O h what a tangled web we weave
When we think that children are naïve. 2
occasions such as fetes, sports days,
and concerts. They have provided
product and become involved in age group can be displayed.
projects based on the items they sell. Remember, you will need to
The aim is two-fold—to bring the change shelf fitting heights for your
product to the attention of the school younger shoppers and you should
children, and to make their business define this department by using
known and the first choice in the bright primary colours and
child’s mind. Schools are only too childhood themes. The principles of
willing to work with the local merchandising stay the same but at
business community in appropriate different heights. By putting this
ways. department at the rear of the store,
you will encourage parents to shop
Create a children’s club. the whole store.
5 Listen to parents.
Many businesses have created
loyalty programs for their adult 7
You must listen to parents and make
shoppers. In some sectors it is also
profitable to create a children’s club appropriate adaptations to the way
which focuses on their products: you retail. Customer suggestion
• a supermarket can organise a Cooking forms should have a space for
Club parents' comments. In the past, these
• a garden centre can start a Gardening comments have included such useful
Club ideas as:
• an art shop can run a regular Painting
Club • "Have a checkout aisle with no sweets
• a sports store can organise sports in it."
sessions. • "Have a child-size shopping cart."
• "Have wide aisles for prams."
Such clubs can be promoted and held • "Do not place products that say ‘Keep
on specific days, thereby enabling out of the reach of children’ below the
customers who prefer to shop 1.2 metre shopping height."
without children present to do so on
Treat children as special
another occasion. You get all the kids
(and their parent shoppers) to come 8 individuals.
at a set time, freeing you up at other Always welcome children as
times to deal with other adults. individuals; companies that go out of
their way to recognise children and
Establish a children’s
6 department.
treat them as special people are more
likely to attract families. You could
Consider your overall product provide balloons, sweets (if parents
categories and whether it is feasible approve), or other small treats as
to develop a children’s section, acknowledgement that you look on
where all the products related to this these customers as special.

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FOREWORDCONTENTS PREFACE TESTIMONIALS
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6
GENERATION X SHOPPERS See also: 212

How to promote your business


to Generation X customers

A lot has been written in recent years about Generation X or


today’s young adults born between 1965 and 1980. Research
claims that their desires and interests are different from other
sectors of the population and therefore they need to be
addressed in a different way. Generation X is another market
sector which you may or may not wish to target, depending on
what products you sell.

Understand For example, they are considered


1 Generation X. to be more computer literate than
any other sector of the population.
These days, young adults are staying
at home longer and living with their They have grown up with computers
parents. Researchers tell us that they and are comfortable using email and
have a more negative view of the web pages as a source of
world, are selfish, and will readily information. This, for example, is one
question authority. They believe key target area for this group.
having fun is important, they want
Be aware
freedom, challenges at work, and to
be well off. Generation X are 3 of fashion trends.
generally enthusiastic, creative, and The group is very fashion conscious
energetic but feel insecure and when it comes to styles, trends,
hunger to be noticed. They do not colours, food, and music. As a
know how to handle difficult people retailer you need to be aware of the
and situations, and are not trained to relevant trends by reading magazines
give service. But they have and watching television programs
considerable spending power. that this age group relates to. To
attract them, you'll need to embrace
Focus on their interests. their current trends and fads.
2 Communicate
Generation X often lack basic
knowledge which older generations
take for granted—Australian
4 with these customers.
The key to building a business
research has shown the majority of relationship with Generation X
them do not know how to cook a customers is to be able to relate to
potato!—but it is a mistake to talk them by approaching them in an
down to this group because they are understanding way and being
street-smart in a range of other areas, prepared to listen, and show you are
and it could put them off your responding to their particular needs
product and your company for life. and wants.

Just about Everything a Retail Manager Needs to Know


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YOUR CUSTOMERS YOUR BUSINESS
YOUR STORE YOUR PRODUCTS 7
YOUNG ADULT SHOPPERS See also: 64, 222

How to promote your business


to young adults

Those customers whose ages fall within the 25- to 40-year-old


range can be classed as young adults. As a general rule their
requirements are different to other groups and therefore your
products, displays, and promotions need to be tailored to
their particular demands…

Present products done and to suggest useful tips and


1 to meet their needs.
The young adult sector is primarily
hints to make the job easier. For this
reason, take appropriate steps to
the independent, do-it-yourself ensure that your staff have the
market. This market group requires knowledge and information required
that you have products laid out in a and are prepared to cheerfully pass
format and presentation that allows on the necessary information and
them to select all the products they tips to customers.
need to do a task effectively when
they get home. Have your price strategy
4 match their needs.
Provide leaflets Young adults look for quality at a
2 and information.
How-to leaflets and basic guides will
price. They are not prepared to
spend excessively, but do expect
help this sector. As a general rule quality and reasonable service. To
they want to learn how to do the job service their needs you may wish to
properly themselves—whether this is introduce a ‘basic range’ within your
cooking a meal, building a patio, product categories to meet their
painting a house, or planting a rose. requirements, and a more expensive
Which is why supermarkets, category for the more discerning of
hardware stores, paint stores, and your customers.
garden centres these days usually
stock a range of useful brochures for
the ‘home handyperson’.

Ensure your team can


3 pass on knowledge.
Young adults are looking to your
team to provide the product
knowledge they need to get the job

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8
BABY-BOOMER CUSTOMERS See also: 20, 36, 40

How to promote your business


to baby boomers

The ‘post-war baby boom’ refers to the increase in births when


servicemen returned home from World War 2. The ‘baby boomers’
are the generation who were born in the late 1940s and 1950s and
are now in their 40s and 50s. They have had a considerable
impact on society—and retailing—beginning with their ‘Flower
Power’ revolution in the early 1960s. Over recent years the main
target market for many retailers has been baby boomers, for they
represent the largest single market sector in Western societies.

Know today’s Egonomics – Customised products,


1 baby boomer.
To focus on the customer needs of
‘me’ products.
Female Thinking – ‘Female think’.
the baby boomer generation, it is Requiring a relationship before the
essential to understand this market sale.
sector. According to Faith Popcorn in Mancipation – New age males are
Clicking, the following features more expressive of their emotions.
highlight today’s baby boomer
99 Lives – They are time-poor due to
generation:
their busy lives. In the United
Cocooning, or becoming 'home' States the Elephant Secretary
bodies – In the United States, 33 service reminds them 24 hours a
per cent of people have changed day of important birthdays etc.
shopping habits for safety reasons.
43 per cent do not shop after dark Cashing Out – Dropping out or
due to safety reasons. One in three copping out.
homes has an alarm system. Alive – They want to live longer, yet
Clanning, or socialising with like- skin cancer has doubled since
minded people – They are forming 1970. The new disease is stress.
special interest groups. Down Ageing – They act and dress as
Wanting Safe Fantasy Adventures – if they are ten years younger than
Virtual reality and exotic meals they are.
are in vogue. Vigilante – They distrust major
Pleasure Revenge – Smoking defiantly, suppliers of goods.
diet rebelling, drinking harder. Icon Toppling – If they do not like a
Small Indulgences – They search for company, they will topple it.
small pleasures… the sale of Save Our Society – They seek
champagne, perfume, and cut environmentally-friendly products.
flowers, for example, has increased. —so sales of $100 pollution control
Anchoring – Spiritual awareness is in devices, leaf blowers, and shower-
fashion. head water savers have soared.

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9
Management Memo
Provide DIM products
2 and services.
The baby boomers now have the
D espite their soul-searching and ideal-
ism, the baby boomers are a genera-
tion of passionate consumers. Eschewing
reputation for being the DIM (do-it- old-fashioned methods like saving up or lay-
for-me) sector of society. It is the by, the baby boomer generation has created
time-poor and money-rich a credit-based society to equip itself with
generation. Baby boomers have been every conceivable domestic gadget from
VCRs to CD players to microwave ovens.
responsible for major growth in the
Increasingly middle class and middle
service industries, home meal aged,…with their widened horizons and their
replacement, and the patio garden. plastic money, baby boomers have travelled
To expand your sales in this market extensively at home and abroad. Their par-
you need to provide finished ents pursued the dream of the three bedroom
products or services. Within reason, brick veneer home almost to the exclusion of
this customer sector is prepared to all else. It's on the baby boomer's agenda
too, but now, it has a family room, en-suite
pay for these services.
bathrooms, a landscaped garden and an in-
ground pool. And, of course, security locks. 3
Provide exceptional
3 customer service.
This group of customers is becoming
less loyal and more demanding conscious when it comes to style and
through its insistance on a higher colour. You need to be a leader, not a
standard of customer service. If their follower, when it comes to trends
perception is that you are failing in within these areas. And remember,
customer service, then baby boomers these days fashion shows up in the
will shop somewhere else. kitchen, garden, food we eat, living
room and ornaments, as well as in
Provide time-poor
4 service.
Be aware that baby boomers as a
what we wear.

Be aware of the wants of


group are short on time and are
willing to pay for services that will
6 baby boomers.
Baby boomers are the ones that are
save them this valuable commodity. leading the trends towards:
With this in mind, consider:
• Safety – They shop where they feel
• Home delivery
safe.
• Ready presented products
• Freshness – They purchase
• Gift-wrapping products they believe are fresh
• Selling on the web and healthy.
• Providing unique products. • Hygiene – They shop at businesses
they believe are clean.
Be fashion conscious. Remember, retailing is about
5
For many retailers their prime target
perception in the eyes of your
customers. You need to promote the
will be a baby boomer female. Many areas that are important to them—
of these women are fashion safety, freshness and hygiene.
Just about Everything a Retail Manager Needs to Know
FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS
10
OLDER CUSTOMERS See also: 160, 162

How to promote your business


to the older generation

Ageing populations are a feature of many western societies. ‘Silver


Tops’ or ‘Grey Tigers’ are currently an important market sector with
specific needs that must be acknowledged and catered for. But, as
baby boomers begin to retire over the next two decades, this retired
sector of your customer base will increase dramatically. You’ll need to
be developing strategies now to meet the demands of this expanding
group of customers who will require 'silver service' from you…

Promote nostalgia. ‘screaming kids’ and therefore they


1
Many retailers already refer to this
may appreciate the opportunity
afforded to them to shop in ‘their’
growing group as the nostalgia time at their own pace.
market and many products, services You may have Nostalgia Days,
and even prices of yesteryear are Weeks or Months. And if you’re
being taken up in the marketplace brave, you may have a promotion
today to reflect this trend. For using prices from another era as part
example, nostalgia includes aromas of the promotional campaign—even
and scents, hence the recent growth to the complimentary hard-boiled
in herbal related products and cures. lollies wrapped in newspaper cones!
To attract this senior customer Remember, when it comes to
group, you will need to ensure the nostalgia, we remember the good
nostalgia theme is reflected in your things about the ‘good old days’—
product mix. and they must be our focus.

Cater for the less able.


2 Have nostalgia days. 3
As we become older we become less
Many supermarkets already
agile and our faculties slow down.
encourage this group to shop on For this reason, retailers must ensure
specific days, for example when that their stores cater for the needs of
special buses transport residents the less able, both in terms of the
from retirement villages to shopping physical facilities and the services
centres, entertainment venues, and offered:
other retail outlets.
• Make sure a wheelchair can get to all
On such occasions it is possible parts of your store safely.
for retailers to target this customer • Ensure your floors are safe. Check
sector in various ways to the benefit there are no areas where a less able
of both customer and business. customer could trip or slip.
Greying Tigers often get annoyed if • Provide seating areas around your
their shopping is disturbed by store.

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11
• Make sure signs are easy to read. As
Management Memo
o not relegate your considerations of
we get older our eyes deteriorate and
we often forget to wear our glasses!
• Have staff as a matter of policy and
D service to the quality of interaction that
takes place at the point and time of sale. You
as
courtesy help older people carry their have to start to think about your service
mer does . Serv ice is ever ythin g
purchases to the vehicle. your custo 4
your company is and does.

Make your products


4 accessible. not be able to remove the car's petrol
cap at the pump, or open certain
Place favourite products in positions
containers in your store—providing
that can be reached comfortably by
an opportunity for your team to offer
the older person. Stretching and
a much appreciated service.
bending is something this market
sector is not prepared (or even able)
to do. If product positioning presents
a problem, ensure your staff
members are on hand to assist when
required.

Train the team to relate


5 to Silver Tops.
Many younger sales staff find it
difficult to relate to older customers.
Younger people need to be made
aware that the language of today’s
youth may not be understood by an
older client. For example, for older
A Western Australian shopping centre, The Park Centre,
people, ‘cool’ relates to temperature, offers a free shuttle bus service to its senior shoppers.
and ‘fresh’ relates to the condition of
perishable products. The key is to Beware of those
use the language of your senior
customers without being
7 talkative oldies.
Many older customers are lonely and
condescending. go shopping for companionship. This
often means they may talk to the sales
Make their stress
6 go away.
team excessively, stopping them from
serving other customers. Your team
Canadian fashion retailer Donald members need understanding and
Cooper defines customer service as patience to show they are listening,
'anything you do that in some way but to politely remove themselves
reduces the stress in your customers' from the conversation after a few
lives'. Make your sales team aware of minutes. Other team members
the stresses faced by the aged should be observant to what's
population and how they can help happening so that they can, under
minimise the problem. For example, some guise, rescue their colleague
an elderly person with arthritis may without offending the customer.

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12
CUSTOMER SERVICES See also: 34, 36, 40, 56

How to develop quality services


for special customers

Many retailers often confuse the terms ‘providing customer


service’ and ‘providing customer services’. Customer service
is how you treat your customer. Customer services are what
you provide them with, other than the products you sell. You
need to provide services as part of your customer care policy
and the range of services will vary with the type of customer
and the style of retailing you are offering…

Understand common provision in many retail


1 your customers.
Because the list of services you could
situations.
• Do you have supermarket trolleys with
facilities built into them to carry
offer is so large and varied, you need babies? Children’s buggies can also be
to narrow it down to the services made available, free for customers who
your specific customer segment request them.
would expect. Remember, however, • Baby bottle heating facilities.
you are there to make a profit by • A carryout service to the car for parents.
selling product. The skill is to
provide enough services to impress Provide for parents with
and attract your regular and special
customers, while limiting excessive
3 toddlers and small children.
Consider these options:
expense connected with the service • In large retail stores, security tags for
you are offering. As a guide, begin parents and children can help if
by considering the ages and needs of children get lost.
your customer base and link • Creche, supervised by qualified
appropriate services to these. personnel for the 2- to 8-year-olds can
allow parents to shop without
Cater for parents worrying about their children; the
2 with babies.
It's a real challenge having to manage
result is the parents spend more.
• Children's entertainment programs in
larger retail stores can include
baby and the weekly shopping, so jugglers, magicians, soft play areas,
you’ll win over many mothers by party rooms, and so on.
providing special services for them. • Children’s clubs that demonstrate
These may include: products you sell are becoming more
• Baby parking zones. Parents with popular and a profit centre in their
babies have to manhandle prams and own right.
strollers out of cars. Why not provide a
car parking area near the door that is
Consider the disabled.
reserved for parents with babies?
• Unisex baby changing facilities and
4
Among the services for the disabled
breast feeding rooms are now a

Just about Everything a Retail Manager Needs to Know


WINNING OVERMANAGING PROMOTING MANAGING INDEX
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YOUR STORE YOUR PRODUCTS 13
Vol. 1: See 248, 388, 390
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
○ ○ ○ ○ ○ ○
customers would be: Management Memo
• The allocation of parking spaces near
the entrance.
• Toilets for the disabled. B oots, a UK company, has been provid-
ing its Christmas catalogue in braille for
three years, even though only 50000 Engl
• The provision of battery-operated ish
people can read braille. In 1990 it start
wheelchairs once in the store. This ed
offering an audio cassette version. One in
encourages shopping throughout the 20
in the 60+ age group is visually impaired
whole facility. and
1 in 4 in the 75+ age group. Is this something
• Elevators or lifts, if you need them, to
you can do for your customers? 5
accommodate wheelchairs.
• Carryout services to the car park.
• Some stores have personnel trained in
sign language to assist customers with one case, midday. It was all so
hearing difficulties. frustrating.”
The message here is—do not
Assist overseas visitors. disappoint your customers. They
5
The Japanese word for guest is the
expect all your services to be
operational when the business is
same as customer—and therein lies a open. You may think your excuses
message. If your business attracts are justifiable—but often customers
visitors from a specific country then are not prepared to believe you.
your team needs to be aware of their
culture, so that your guests are not Gain a reputation
offended. Encourage team members
to learn an overseas language; this
7 for your special services.
The list of services is endless and
really impresses the overseas could include:
customer and puts them at ease. • A lay-by service for Christmas or
Where appropriate, be able to birthdays to provide something
guarantee delivery to the customer’s special to an individual.
homeland. The last thing they want • Allowing customers to take as many
is to have to carry delicate items on a items as they like into changing rooms
to show you trust them.
long journey.
• Complimentary refreshments to put
them at ease if they have to ‘linger
Ensure all your services
6 are open.
Consider this report: “I recently
longer’.
• Complimentary gift-wrapping and
gift cards.
visited a world renowned retail mall, • Accepting foreign cheques, notes,
expecting to be overawed by the leading credit cards etc.
retailing excellence I was about to Brainstorm with your team what
see. The centre opened at 9.30 am. I services they feel customers would
arrived at 9.15am to find the car park like to experience. We have to accept
locked until 9.30 am for security that customers are taking more and
reasons. I wanted breakfast, but once more of our services for granted and
inside I found restaurants within the are still asking for more—but that’s
complex had signs up saying ‘Closed the competitive nature of retailing
till 10.00 am’, and 10.30 am and, in today!

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FOREWORDCONTENTS PREFACE TESTIMONIALS
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14
COMMUNICATION See also: 28, 32, 34, 46

How to communicate
your beliefs to customers

Every retailer must be committed to providing the highest possible


levels of fair trading and customer service to consumers.
Commitment, however, is one thing; how you demonstrate that
commitment and how you tell customers of that commitment is
something else. How do you tell your customers what they can
expect from you and your store?

Understand what between the customer and the


1 customers expect. retailer
It’s simple—the customer expects • Service provided at a cost the
quality goods and quality service. consumer perceives as reasonable.
The problem for the retailer comes Remember, however, your job is to
when the customer's perception of exceed customers’ expectations. Set a
quality is different from yours. It is standard that the customer will be
your job to set the standards and to happy with, and then train your
communicate them to the consumer. team to consistently exceed that
A quality product can be safely limit.
defined as:
• A product free of defects, fit for Communicate your
the job it was designed to do, and
of a satisfactory quality
2 beliefs to your customers.
Stew Leonard, the fresh food retailer
• A product accurately described on in the United States communicates
the box or label in language the his beliefs on a slab of stone at the
consumer can understand entrance to his store. He ensures that
• A product guaranteed against everyone—customers and passers-
fault within a specific time frame by— knows what he and his team
believe in. Some businesses will
• If the product is not up to standard,
display posters around the store,
it is clearly marked as such for the
while others distribute leaflets or
customer to easily read.
newsletters to shoppers. It does not
Quality service can be defined as: matter how you communicate your
• Service that is delivered to the message as long as you do communi-
customer with competent care and cate your beliefs to customers…
skill
• Service delivered within a Be prepared
reasonable time frame 3 if things go wrong.
• Service delivered, as agreed to, We do not live in a perfect world and

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there will be times when you will fail Management Memo


n analysis of the top power words used
your customer. It is important that
they tell you—and not your A in the Top 100 Good Headlines re-
veals the following: 6
competitor, and that you have a
Number of
positive action plan in place to Appearances
remedy problems. YOU 31
Ensure you have a procedure YOUR 14
where customers can let you know HOW 12
without getting embarrassed or NEW 10
feeling threatened. Train staff in how WHO 8
MONEY 6
to handle complaining customers.
NOW 4
Remember, you want those 4
PEOPLE
customers to leave, satisfied with WANT 4
your store’s handling of the crisis, WHY 4
and with a smile on their face.
Use these in your verbal and silent promo-
tions. They will increase sales.
Use words which avoid
4 conflict.
Customers frequently get annoyed Instead of ‘You shouldn’t have done
because the salesperson uses the it that way’, try ‘Here’s how I
language of conflict. Train your team would have done it’.
to practise ‘positive English’, as the Instead of ‘Why didn’t you do it the
following examples illustrate: way you were told?’, try ‘Help me
Instead of ‘You did this’, try ‘Here’s to understand why what we
what I suspect went wrong…’. agreed to do didn’t happen’.

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FOREWORDCONTENTS PREFACE TESTIMONIALS
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16
DRESS See also: 118, 208, 210, 216

How to make sure your team


members look professional

Retailing is about perception and your team members are


your company’s ambassadors. Customers will judge your staff
in ten seconds, and since judgements are initially made with
the eyes, staff appearance can be a critical factor in your
company’s success. So, while their communication skills are
vital, how your staff are dressed can play an equally
important role, particularly in terms of first impressions…

Consider the image to wear the uniform. Your role is to


1 you’re trying to create. ensure that their views are consistent
with the image you require.
Your uniform provides a very strong
message to your potential customers,
Aim for consistency.
and the message will vary depending
on how customers perceive your
business. The uniform can provide
3
Success is about consistency in
the following signals: everything you do. This often means
Authority: The police officer’s uniform you may need written standards on
and the bank managers suit (yes, it's a how the team uniform is to be used
uniform) are symbols of authority. in your company. Issues for
Status: The cabin crew in an aircraft wear consideration should include:
uniforms as symbols of status. This says • Can or cannot the team wear the
to the customer that the uniformed uniform outside work. e.g. Can they
person has a higher status in a particular go to the pub in a company uniform?
situation than the customer. • Who cleans the uniform, how often,
Colour: Customers associate colours with and who pays for it?
specific industries and your uniform may • What accessories are to be provided
need to reflect your industry—barbers by the team to wear with the uniform,
(red and white), butchers (blue and i.e. type of shoes, trousers/skirts,
white), gardeners (green), cooks (white). jewellery and other garments?
• What cosmetic style, hairstyle and
Involve your staff other personal criteria are important
2 in decisions on dress.
Before introducing a team uniform or
to provide consistency in the team?

Develop and publicise


dress code, first seek ideas from staff.
You will find that different genders 4 a staff dress code.
It is important to have standards that
and ages will have different
perspectives as to what should be your team can accept. Below is an
worn. You need everyone to share example, compiled by a retailer with
ideas. Staff views are important and staff input, for you to consider:
consensus should be your aim. The Our Dress Code
team must feel comfortable and proud Because we are members of a professional

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17
Vol. 1: See 2, 394, 396

retail organisation, we believe we should


Management Memo
provide professional selling skills and service.
Therefore to help us achieve these objectives,
we have the following dress and behavioural
A ppearance does not make the man,
but it will pay any man to make the
best appearance possible. 7
code:
All female staff will be provided with two
tabards, one of which will be worn at all times
when in the retail areas. • tailors can hang a tape measure
around their necks.
All male staff and female outdoor staff will be
provided with two shirts, and one water-
• hardware experts can have a tape on
proof coat. Shirts will be worn at all times their belt.
when in the retail areas. • clothing retailers can wear the clothes
they sell.
It is the responsibility of the employee to
ensure these garments are kept clean and in
good repair. Consider the use
Failure to wear this clothing in retail areas
will result in the person being sent home with
6 of name badges.
Wearing or not wearing personal
an appropriate loss of pay.
name badges depends on what level
The storeowner will provide replacement
garments once the old ones have deteriorated of customer service you wish to
through normal wear and tear. provide. If your aim is to give the
Jeans may be worn by outside staff, but must impression that your team is friendly
be clean when you arrive to work. Torn jeans towards customers, then a name
will not be tolerated. Again , the person will badge is essential. This allows
be sent home with an appropriate loss of pay.
customers, rather than your staff, to
For safety reasons, staff will not be allowed to
wear open shoes in any areas of the retail area.
decide at what level of formality they
Light facial cosmetics are acceptable on fe-
wish to hold a conversation. If you
male staff, but nail varnish is not permitted. use name badges, consider this advice:
No facial cosmetics are acceptable on male • Have a policy that your team must
staff. wear their name badges when on the
shop floor.
Rings, earrings and light necklaces are ac- • Only use the team member’s first name
ceptable on female team members.
on the badge. If you include surnames,
Earrings and excessive jewellery will not be you may find some staff receiving
accepted on male team members. unwanted, even obnoxious phone calls.
Team members will wear name badges at all • Do not put titles on name badges. The
times in all retail areas. title Manager, Supervisor, and so on,
All clothes worn by the team should be in does not help your customer service
good repair. relations. In fact it may result in your
Smoking, eating and drinking will not be customer becoming selective in terms
allowed in the shop area. of whom they deal with. Your aim
should be to ensure everyone in your
team is an equal in the eyes of the
Add that touch
5 of credibility.
customer.
• Have two badges for each person.
Keep one badge in the office. If a team
In retailing, credibility is based on
perception, not knowledge. To make member forgets a name badge they can
then collect one from the office. Before
your sales team look credible, try they collect it, ensure they put coins
including a tool of the trade as part in a charity box as a fine. (This is a
of the uniform. For example, useful motivator and the ‘punishment’
• garden experts can wear secateurs on is less onerous when staff know the
their belts. fine goes to a good cause.)

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18
FIRST IMPRESSIONS See also: 2, 118, 120, 124, 176

How to make a positive impression


in ten seconds

Retailing is about making the right impression upfront.


Researchers tell us that we have ten seconds at best to make
that first impression on the customer. For that reason, everything
must be spot-on—your external appearance, inside the store,
your staff’s appearance and involvement, the products, the
check-out… At every stage, first impressions count.

See your store through The checkout


1 the customer’s eyes.
■ It is clean.
■ It is uncluttered.
The following checklist focuses on ■ There are adequate bags/boxes.
the types of things which a typical ■ All the equipment is working.
■ The checkouts have enough change.
customer can react to in the first ten
seconds of an encounter. For this
Develop a checklist.
reason, they are aspects of your store
which require your consideration
2
To ensure all is well in your store in
and attention if you want to leave the
customer with a positive impression terms of giving a positive impression
first up: at all times, it is wise to compile a
formal checklist that focuses on all
Outside your store
■ The store has clean, distinctive entrance directions. aspects of the store. This should be a
■ The windows are clean. vital tool for retail managers and, if
■ There is no litter in front of the store. used correctly, is a guarantee that
■ The shop windows look inviting.
■ The entrance to the store is swept/mopped.
everything that the customer
experiences is consistent with your
Inside your front door
■ All the lights work. minimum standards—hopefully you
■ The primary product display is in position. can excel this basic standard.
■ The product on display is well signed. The following is a suggested
■ There is adequate product on display.
format for a checklist. You should
■ The floor has been swept/mopped.
■ All safety issues have been addressed. compile a similar list to reflect the
Toilet facilities
specific nature of your enterprise.
■ There is adequate toilet paper.
Department Action By
■ There are soap and hand towels.
■ The facility is clean. Required Whom
■ We are promoting the right products in the toilet. e.g. Fashion
The team All products priced
■ They are all in the agreed team attire. Signage in place
■ They are using positive body language. Aisles clear
■ They are greeting every customer. Carpet clean
■ They are using positive verbal language. Products clean
Lights working

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19
Vol. 1: See 394, 396

e.g. Indoor Plants


Management Memo
Labelled
Sub-standard stock removed
Irrigation systems working
D etermine who your store customers
are and then you can decide what retail
niche you're really in. It sounds easy, but for
Area tidy and litter free
Customer info available those sitting at the top of the pyramid – and not
Trolleys/Baskets available working at the front lines in day-to-day contact
Linked sales on show with customers – it can be tricky. 8
Benches look stocked
Lighting checked
Shading checked
CUSTOMER/TEAM RATIO SURVEY
Heaters unobstructed
Date: Observation 9.30 10.30 11.30 12.30
Tidy under benches Times: 1.30 2.30 3.30 4.30 5.30
Preparation area clean/tidy Activity (✓)
Storyboards used Name of

Total no. of
customers
Selling (S)

duties (A)

Break (B)
Team Member Comments

Ancillary
Pot plant sleeves available

in store
Idle (I)


e.g. Food
Shelves clean 1
Floor clean 2
Product clean 3
Counter clean 10
Food preparation area clean
Waste bins empty (b) Convert the information gathered into
Signage relevant a graph. See a possible outcome
Food fresh, well displayed provided below. By referring to the
Linked sales obvious completed graph, you will obtain an
Impulse purchases obvious overall picture of the working status
of your staff for that day, in particular
Walk the floor who is actively selling and how
3 with your checklist.
Apart from the quick visual check
ineffectively others of your team are
involved. You can then reprogram
your team timetable to ensure staff are
that should take place every morning available to serve the customers at
before the front door is opened, a vital times of the day.
much more thorough check should
No. Customers in Store

50-
take place at least twice a week. Your
formal checklist will prove 40-

invaluable in this regard. 30-

20-
Monitor what team
4 members are doing.
10-
TIME 9.30 10.30 11.30 12.30 1.30 2.30 3.30 4.30 5.30
When customers enter your store, 1- S
S S S S
No. Staff and Allocated Activity

they get the wrong impression if S S


2-
they see idle team members. You 3- A
S
S
therefore need to occasionally check, 4-
A
Gone Home

5- A
record, and analyse how the team is B B A
6- I
performing: 7- I
I
(a) Record your observations regularly 8- A
B
throughout the survey day on a 9- B I B
customer/team ratio survey sheet. A 10-
typical example follows: Key: S = Selling; A = Ancillary work;
B = Break; I = Idle

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20
BODY LANGUAGE See also: 16, 18, 218

How to use positive body language


to make the best impression

Most of us, often without knowing it, communicate a great


deal without actually saying anything. Our facial expression,
the way we look at someone, our posture, the movement of
our hands—all send clear signals about how we're feeling or
responding to another person. Body language can send many
messages to customers and others with whom we deal daily. It
is an important concept for retailers to grasp…

Know why body Practise positive body


1 language is important.
Research shows that people interpret
2 language always.
Strangers can often sum up a person
body language before they interpret in ten seconds—the moment of truth
tone of voice and words. In fact, 75 in a sales encounter. Since you have
per cent of what we absorb when we only one chance to make a good first
meet somebody is based on how they impression, make sure your body
use their body in interacting with us. language provides a positive start.
In retailing we are constantly Body language is read, often
meeting strangers whom we judge unwittingly, by first observing the
through their body language. That face and then the body. Monitor your
stranger, of course, is also assessing own body language—keep it positive:
our body language. Positive: Make eye contact—we normally
In retailing the salesperson likes read the eyes first.
to be perceived as the dominant Negative: Don’t look at the person. Look
person in the encounter —which is past the customer.
why they aim to control the body Positive: Smile—and this is really only
effective if it comes naturally.
language game. If the salesperson
Negative: Frown.
has positive body language then the
Positive: Keep your hands away from
outcome of the interaction with the your face.
customer has every chance of being Negative: Stroke your hair, rub your ear,
successful. However, if the stroke your beard or scratch your nose,
salesperson has negative body indicating that you are nervous or do not
language then this can have a know what you are taking about.
negative impact on the selling Positive: Use open arm gestures and talk
with your hands to show you are open
encounter.
and confident.
It is difficult to train people in Negative: Fold your arms and you reveal
body language, but as retailers we you are hostile, bored, or not interested
must be aware of, and be prepared to in the customer.
work on, the use of our bodies to best Positive: Stand upright and face the
effect in the sales process. customer squarely.

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21
Vol. l: See 2, 116

Negative: Lean against something, and


Management Memo
you say you are not really interested in
the customer or do not have time for them. I f you recruit people who are naturally
pleasant and positive, acceptable body
language will be second nature to them. When
Positive: Touch the customer's hand when
interviewing, look for staff who: smile easily
giving change back.
and often, have a sense of humour, be them-
Negative: Drop change into a customer’s
hand or on to the counter, and this selves, are fun loving, issue compliments
shouts negativity. easily and often, display common sense, ex-
ude self confidence, engage you in conversa-
tion—about you in first 15 seconds, are not
Consider distance
3 from the customer.
afraid to admit they do not have all the an-
swers, can laugh at themselves, are touch-
How close should you get to a able and approachable, know the difference
customer when serving on the shop between honesty and tact. 9
floor? Women generally seek more
space than men, but this comfort
zone varies with cultures. Australians Know the body language
tend to seek the largest comfort
zones, with men prefering two thirds
5 at the checkout.
Culturally, Caucasians tend not to
of an arm’s length between strangers,
touch strangers very often. Harass-
while women prefer an arm’s length
ment legislation also makes this a
between them and a stranger. But
travel to Indonesia or Thailand and difficult area. There’s no problem in
you'll find the salesperson will come touching when we shake hands or
right up to you and may even touch when we pass money to each other.
you—in cultural terms, their personal Indeed, we look on the dropping of
comfort zones are much smaller. change in our hands or the placing of
it on the counter for us to pick up as
Be aware of cultural being a negative sign. For this
4 differences.
Unfortunately, there are no universal
reason, cashiers should always place
change in the customer's hand. And
rules for body language. The rules smile. Small points like this can make
change from country to country, and a big difference with customers.
often within countries. For example,
Be sincere.
as a sign of respect, Aborigines,
Zulus, and Japanese tend not to make
6
Many retail staff will tell you that
eye contact straight away when they
meet a stranger. On the other hand, they are competent actors—they
Caucasians see eye contact as an claim they can 'put on’ a positive
essential precurser to an encounter. approach to customers. Actors may
And the thumbs up signal is a indeed be skilled at this, but most of
positive sign in many countries us are untrained in the dramatic
while, in others, it’s a rude gesture. arts—and the customer is quick to
So the best advice is to attempt to perceive a counterfeit smile or gesture.
have your team culturally aware and The key is to employ positive,
constantly learning from each other pleasant people and to train them in
on matters relating to the varying the skills of retailing—and that
cultural rules of body language. includes the basics of body language.

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22
TRAINING See also: 16, 18, 20, 214, 218

How to train your team to smile

Every retail manager will know that they want team members to
smile when greeting a customer. But smiling is supposed to be
primarily a biological function. Smiling occurs naturally. Yet still
many staff members smile reluctantly. The secret for retail
managers is really quite simple: if you want your team to smile,
you need to create a culture where people want to smile… and
that may warrant a training program—for management, or
team, or both.

Consider a change invest in possibly their greatest


1 in culture. asset—their people. All the customer
often wants is a positive, courteous
Research carried out in the United
Kingdom by Nicholson McBride response from your staff members,
revealed that one in five customers but to achieve that you will need to
change their shopping habits due to invest in them and show you care
the lack of friendly customer service. about their job satisfaction and their
And supermarkets came at the future. A happy employee is a
bottom of the league table in terms of smiling employee.
public perceptions in this area.
Customer feedback included: Conduct an interactive
• ‘I often wonder if it is my fault that
checkout operators are so rude.’
3 workshop.
A first step in encouraging team
• ‘The staff have no product knowledge.’
• ‘They do not really acknowledge you.’
members to change is to get them to
• ‘The calibre of people is not the think positively about their own jobs.
friendliest.’ Telling the team will often be
• ‘The quality stores like Waitrose and perceived as preaching and
Marks and Spencer are very good, but preaching is usually resented.
the others are like the pits.’ A useful strategy is to conduct an
With comments like these, many interactive workshop where team
stores were advised to change their members are encouraged in a free-
culture or lose their customers. wheeling environment to think for
Perhaps it's time for you to address themselves about their roles—from
factors of friendliness in your both their own and the customer’s
business. perspectives.
Many companies use an ‘outside
Invest in your team. provider’ to lead the workshop since
2
Many businesses invest in new
these people are usually more
objective than your own leaders and
technology, shopfittings and possess the skills and experience to
promotional campaigns, but fail to manage such sessions.

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23
Vol. 1: See 342, 344
Management Memo
Seek the facts from
4 customer feedback.
The majority of your team will
P ositive business culture comes down to
leadership. Around 95% of leaders are
traditional and 5% are the ‘fabled’ service lead-
honestly believe that they are ers. Consider the qualities of both: 10
providing appropriate customer MANAGERS LEADERS
service. Many won’t be. If you want Traditional Fabled
people to change, you’ll have to Focus on power Focus on empowerment
provide proof that they need to Top of the hierarchy Centre of the circle
change—which is why you must Autocratic Participative
Exclusive Inclusive
present a true perspective based on Seek deference Seek consensus
what customers believe. This can be Conscious of rights Conscious of responsibility
obtained via mystery shopper reports, Inwardly focused Other focused
questionnaires, customer comments, Bureaucratic Entrepreneurial
or more sophisticated research. Feed
this evidence into the workshop
deliberations, without picking out will encourage your staff, with
individuals as the focus of customer guidance, to share their own views,
complaints. and seek solutions, and will limit the
imposition of their personal opinions.
Provide formal training. The trainer normally provides a
5
Once the team has identified the
workbook for individual use and for
later use as a workplace reference.
need, introduce a formal training
Measure the results.
session to correct any problems. The
program might embrace: 7
If you conduct a workshop session,
• A formal presentation of the reasons
for change and what specific changes and then fail to follow it through in
need to be implemented. the subsequent days and weeks, then
• Small group ‘think tank’ sessions that your team will be motivated for the
allow the participants to resolve short-term only and eventually
problems cooperatively with peers.
become disillusioned. You must
• Role play sessions that allow team
members to practise newly acquired follow up with mystery shopper
skills and attitudes. audits or surveys to ensure the
• A question-and-answer environment newly learnt skills are implemented
where all of the trainees feel they can in your store.
confidently ask questions and will not
be ridiculed.
Remember—all the team

Use a competent,
8 must smile.
6 fully qualified trainer.
Your business has internal customers
(all your own people in their varied
To maximise your investment in roles) and external customers (the
training, you should employ an public, suppliers, maintenance
experienced trainer, not simply a people and so on). All your team need
presenter. Presenters offer their own training in friendly customer service
views on how to improve. Trainers to deal with all your customers.

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24
GREETING CUSTOMERS See also: 14, 16, 22, 56, 208, 210

How to greet a customer

The culture of retailing varies from society to society. In Italy and


Indonesia, for example, the customer is more important than the
merchandise and being an effective host is an integral part of store
life. In the United Kingdom and Australia, the merchandise is often
perceived as being more important than the customer and, as a
result, the customer is sometimes ignored while the merchandise is
displayed to maximise effect. But whatever the culture, the need for
retail staff to greet the customer warmly is seen as desirable…

Select staff who enjoy Understand the basics


1 working with people.
When recruiting team members, it’s
3 of greeting customers.
Make sure your staff are familiar
an advantage to select people with with the following essentials:
personality and who enjoy working • Make eye contact with the
with customers. This is not always customer. People read eyes first.
easy. Too often, managers lack the Suggest that your staff make a habit
finer skills of interviewing, while of always noting the colour of every
interviewees, having been trained in customer’s eyes—a sure way of
the nuances of interview, are often guaranteeing eye contact. And, if in
able to disguise their true your business you wear sunglasses,
personality. In this regard, a useful do take them off for a few seconds
interviewing technique is to pass when you meet the customer so that
compliments to the interviewee and eye contact can be made.
then to gauge the reaction. A
• Smile. A true smile can only come
confident, 'people' person will
naturally. It shows a friendly face
graciously accept the compliment
and it also is capable of giving your
without embarrassment. Such people
voice a warm, friendly ring to it.
are likely to be useful additions to
your sales team. • Give a sincere welcome. We can
name global franchise organisations
with the staff trained to trot out their
Insist on a ‘meet-
2 and-greet’ policy.
In any retail business, it is imperative
standard, insincere greetings.
Sincerity is important. Allow your
team members to use any greeting
to have in place throughout the store they feel comfortable with—Hi,
a minimum ‘meet-and-greet’ G’day, Hello, Good Morning, or
standard. Your staff should, as a whatever—provided it comes across
matter of course, welcome any sincerely.
customer entering the premises with
a friendly greeting and a warm • If you know the customer's name,
smile. use it. We’re all flattered to hear our

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25
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Management Memo
name being used. If your staff know
the name of a regular customer, then
they should be encouraged to use it.
S urveys of customers indicate that they
wish to be greeted promptly and prop-
erly. In the United States, 80 per cent of
As well, if they can refer to a recent customers believe they are greeted properly.
incident, holiday or other event in Most customers surveyed felt that a greeting
the customer’s life, they will within three minutes of entering a store was
strengthen the bond with this essential. 11
person. The relationship will move
from a customer/salesperson link to
Check out your business
a friend/friend bond. Such
relationships within your business
5 for customer friendliness.
To assess your company's
will increase customer loyalty
dramatically. friendliness towards customers,
the following checklist should be
• Keep the body language positive.
completed at least annually:
Remember, our body language can
YES NO
send strong messages—both positive Have you a service strategy ■ ■
and negative. clearly defined in terms of
• Focus on the customer not the customer benefits?
merchandise. If, for example, you are Do you have a well-defined ■ ■
building an intricate display, it is promise?
advisable to stop for a second, greet a Have you a service strategy
customer, and then carry on with the clearly communicated
task. To continue working may send • outside your store? ■ ■
• inside your store? ■ ■
a message that the customer does not
matter. Are your systems and procedures ■ ■
always aimed at the customer?
• Never ignore a customer. During a
Have you measurable quality ■ ■
busy trading period, how should you standards for all the service areas?
greet a customer when dealing with
Are they communicated to all ■ ■
an existing one? Simply glance at the members of your team?
new customer, make eye contact and
Is your recruiting, training and ■ ■
smile. This alone says: ‘Hello and I promotions oriented towards
will be with you in a moment.' customer service?
Each month, do you reward ■ ■
Keep the basics
4 on the boil.
somebody for something really
special that s/he does for a customer?
Desirable retail habits are often Do you deal with letters of
simply ‘common sense’, but complaint or praise
• rapidly? ■ ■
regrettable such essential conduct is
• to the customer's satisfaction? ■ ■
not evident all the time. For this
reason, it is wise to initiate a Is your team involved in the ■ ■
setting-up of service quality
procedure for updating all team standards?
members every six months in those
Do these team members ■ ■
important, basic retailing skills— participate in chasing errors
including ‘meeting and greeting’. through quality circles?

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26
COMMUNICATION See also: 18, 24, 28, 30

How to communicate effectively—


and make the sale

US research claims that 70 per cent of people start their working life in
retailing—yet only 3 per cent of them really want to be in retailing. In
other words, the vast majority of them are reluctant starters when it
comes to retailing as a career. Little wonder then that, despite the
volumes that have been written on communication, customers
come across indifferent communication skills in stores. As well, we fail
to train newcomers to communicate effectively. Perhaps the
following advice will help…

Know when to Try the Merchandise


1 approach a customer.
Not all customers want to be
3 approach.
This strategy is used when the
approached. The experienced customer is seen to be looking at or
salesperson is able to read the signals handling the products. The approach
that indicate a customer wants to be here is to give a brief piece of
approached. The signs include: the information on the product as you
customer is looking lost, looking approach the customer. Examples
confused, back tracking to a product, include: ‘Hi, let me tell you that
approaching the counter, making eye those oranges are delicious’, or ‘Hi,
contact with you, looking impatient, I’ve just purchased one of these, and
walking towards you. The real skill it’s working wonderfully’, or ‘Good
is in reading the customer and morning, did you know those clothes
deciding which is the most are on special today?’.
appropriate way of approaching, and
opening up a conversation. Try the Service
Three approaches might be
considered…
4 approach.
This is the most common—and most
misused—approach. A service
Try the Greeting
2 approach.
This is the friendly path where you
approach should be friendly, non-
aggressive and offer assistance.
Service approaches used come in a
greet people in a positive way. It number of different guises…
relies on the use of positive body Closed—This style of communication,
language as the customer is greeted. when used to start a conversation,
The opening might begin with a actually closes down selling. Common
simple statement such as: ‘Hi, How closed approaches are: ‘Can I help you?’
are you today?’ The important or ‘Are you all right there?’ Over 70 per
cent of customers answer ‘No’ to the first
message is that the greeting must be question and ‘Yes’ to the second. Since
sincere, otherwise customers could you have given the customer the
regard you as being ‘pushy’. opportunity to close down the

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27
Vol. 1: See 74, 212, 220, 224, 226

conversation, the result is that the average


Management Memo
sale is much lower than it should be.
Open—This should be the most used
S ales training is about saying the right
thing to customers, but we also need to
be aware of the things we must not say to
approach. Open conversation starts with customers. For example, it’s a sin to say…
how, what, when, where, why, or who. It is
designed to encourage the customer to ‘You have to…’
‘open up’. Examples include: ‘Good ‘No, …’ at the start of a sentence.
morning, how can I help you?’ or ‘Hi, ‘So-and-so screwed up.’
what can I demonstrate for you?’. ‘I don’t know. I’m new to the company’ (What
you should say is: 'I don’t know the answer
Leading—Here you try to get the
myself, but I’ll find someone who knows'.)
customer to agree with you—which is
‘We can’t do that.’
fine if you do both sincerely agree with
each other. When leading, end sentences ‘I’ll have to put you on hold.’
with ‘…isn’t it?’, ‘…didn’t it?’, ‘…aren’t ‘XYZ Co. carry shoddy merchandise and
they?’, and ‘…hasn’t it?’. For example, their prices aren’t as low as ours.’ 12
‘Lovely flowers, aren’t they?’ or ‘Now
that looks great on you, doesn’t it?’ If you
are not being sincere when using leading
statements, the customer will soon quickly become friends with the
become suspicious. This approach can customer and have a far higher
prove futile if you consciously
manipulate the conversation. average sale per customer than other
members of the sales team.
Probe, probe, probe.
5
Gentler probing encourages the
7 Be aware of the
importance of listening.
customers to really get into a deep Your listening skills are probably
conversation at a personal level more important than your verbal
about the product they are buying. skills. A good listener can soon
Probing questions usually make use establish the needs and wants of the
of the word ‘feel’. For example, ‘How customer and then recommend the
do you feel about…?’ most suitable product. Listeners also
give the impression that they are
Become emotionally genuinely interested and care about
6 involved in the purchase.
Top salespeople are emotional
the customer. They then get the
chance to do add-on selling as well.
salespeople and, generally, women
Remember the basics.
are better at this skill than men. An
emotional salesperson finds
8
Finally, as Chris Newton (Results
something attractive about the
person they are talking to and then Corporation) summarises:
compliments them on it. For example, 'To be a successful communicator…
‘I do like your dress’ or ‘Now that Make your customers feel welcome.
colour really suits you’ or ‘What a Enquire about their needs and wants.
lovely selection of plants you’ve Talk in their language.
chosen’. The important thing is to be Ask questions constantly.
sincere when using the emotional Invite them to buy.
approach. Emotional salespeople Leave them on a high.'

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28
FEATURES AND BENEFITS See also: 156, 157

How to sell features and benefits

The successful salesperson knows the difference between


the features of a product and that product’s benefits for
the customer. In the end, people are more attracted to
a product’s benefits than to its features. For this reason, it is
important for a salesperson to be able to translate features
into relevant benefits if the deal is to be sealed…

Understand the changing Understand the


1 role of the salesperson.
In any sales encounter, the
2 importance of ‘features’.
Features are what a product is and
salesperson will, as the sale how it works. Although your sales
progresses, adopt the role of host, team need to be familiar with this
consultant, and seller. The following technical knowledge to have
diagram identifies the sequence of credibility in the eyes of the
these functions: customer, most customers are not
particularly interested in the features
of the product. Research tells us that
THE SALES PROCESS the majority of them make their
The decision to purchase on the basis of
The
Salesperson Potential 15 per cent product knowledge and
Customer 85 per cent emotion, an important
As Host As Guest concept for a salesperson to grasp.
Greetings So, if you rely on product know-
As Consultant how alone and emphasise features to
sell merchandise, you are not relating
Ask
questions
➞ ➞ Wants effectively to the customer. You run
the risk of using product jargon,
Listen words the customer cannot under-
stand, and are in danger of over-
communicating, over-complicating
Features/
Knowledge ➞ Benefits the product—and losing the sale.
As Seller
Understand the
Pre-close
questions
Close the sale
3 importance of 'benefits'.
Benefits are what the product does
Satisfied
Farewell customer for the customer and often embody
the important emotional areas of the
decision making process. Consider

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29
Vol. 1: See 98, 212
Management Memo
the banking service, for example, to
differentiate between features and
benefits. A bank may argue that its
B uying motives can fall into two groups,
emotional and rational. 13
Emotional reasons for buying are:
features include:
Automatic teller service Fear—of competition or being left behind
Open till 6.00 pm on Fridays Envy—of another's successful achievements
Many branches Vanity—recognition by others that you have
Friendly staff made a wise decision
Deposits are secure Love—approved by family and friends
Travellers cheque facility Entertainment—enjoyment and relaxation
Sentiment—family tradition
10 per cent interest on savings.
Pride—being associated with success
It may argue that the benefits of Pleasure—derived from the appearance of
banking include: the new purchase.
Saves you time Rational reasons for buying are:
Can obtain money any time of day
Profit—increase efficiency, reduce wastage
Gives you peace of mind.
Health—less hazardous, less strain
Explore the difference between Security—well-established firm or brand, or
features and benefits for such a proven track record
products as a household fire alarm, a Utility—easier to use, less effort, time saving
garden sprinkler system, and a long- Caution—fewer service calls, long life
life paint—and you’ll understand the
value in promoting benefits
whenever you can. their motive is (d), (e) or (f), because
they want the product.
Understand your
4 customer's motives.
5 Train your team
in selling the benefits.
I believe people buy a product for
one of six reasons (although Pat As an integral part of your sales
Weymes' categorisation differs training program, you should
slightly—see the Management Memo include the procedure of identifying
above). During a sales encounter, a the features and benefits of your
skilled retailer can soon identify the merchandise. During these sessions,
customer’s prime buying motive and your trainees might consider
approaches the sale accordingly. completing the following chart to
These six buying motives include: drive home the importance of going
(a) Money gained or saved
beyond a product’s features in the
(b) Useful or convenient item selling process:
(c) Security/Protection
(d) Status Product Features and Benefits to Buying
name and functions customer motives
(e) Pride description (what it does (what it does
(f) Pleasure. and how it works) for the buyer)

Customers become price sensitive


when their motive for purchase is
identified as being (a), (b) or (c),
because they need the product. They
become less price sensitive when

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30
REMOVING CUSTOMER DOUBT See also: 20, 26, 28, 50, 152

How to remove a customer's doubt—


and make the sale

Most people do not make instant buying decisions. They need


to have their doubts removed by a person they have
confidence in—and this is one of the roles of a salesperson.
You need to be able to identify a customer’s doubts and
then, by combatting that uncertainty, you can achieve the
sale…

Know that customers Be on the lookout for


1 have doubts.
Doubt is due to one (or more) of four
3 customer cover-ups.
Most of us conceal our real doubts.
factors looming large in the potential How often do you hear people say:
customer’s mind. According to John ‘I’ll think about it’ or ‘I’ll talk it over
Wren in Yes, Thanks! I’ll Take It!, with my partner and get back to you’
these can be summarised as: or ‘I was only really looking at this
• A doubt due to an unanswered point in time’. Such cover-ups
question or a misunderstanding in usually hide the real reasons for not
the potential customer’s mind. going through with the purchase.
• A doubt due to lack of clarification According to Jeffrey Gitomer in
or the need for approval by a Sales Bible, the real reasons for doubt
qualified person. by customers are normally:
• A doubt due to not believing the
I do not have the money on me.
product is going to satisfy the I have a credit problem.
customer’s needs. I cannot decide on my own.
• A doubt due to conditions that will I want to shop around.
not allow the customer to purchase I do not understand the product.
when they want to purchase. I have a friend in the industry.
The price is too high.
I have money, but don't want to spend it.
Welcome customer
2 doubts.
If prospective customers raise
I need someone else’s financial approval.
I have something else in mind.
I’m too rushed to purchase at present.
I don’t really need it.
doubts, this normally is a clear
I don’t trust your company.
indication that they are wanting to I don’t trust you.
make a purchase, but they need a
salesperson to remove those doubts
Discover the real
and to help them make the decision.
The presence of doubt is, in reality, a 4 reason for doubt.
positive opportunity that should be Being aware of the above, you are
welcomed. now in a position to discover the real

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31
Vol. 1: See 74, 98, 220, 222
Management Memo
reason for doubt. The customer may
not always tell you (especially if they
do not trust you) but you do have the
P ick a trading day at random
whole day keep a record of how
your customers say 'no'.
and for the
many of
opportunity to probe. To discover That day could
become a high point on you
r sales calendar
the real reason, you must be —particularly if you thereafter
use a different
confident and this comes with selling technique to reduce
the number of
training, especially in product no's. 14

knowledge, selling skills,


negotiations, and listening skills.
providing yourself and your team
Be methodical when with the confidence to approach and
5 dealing with doubt.
John Wren advocates four steps
deal with the doubting customer. It
provides an opportunity to make
when dealing with doubt: mistakes and to learn from other team
members. This is far more effective
Defuse any objections by listening,
showing empathy, and using open than bungling a real-life situation
questions to discover the real reason for with a customer and losing the sale.
doubt. Role plays can be undertaken in
Prove facts by using magazines, technical training sessions or in team
reports, demonstrations, testimonials and meetings. Introduce them as part of
any other material that is available to your culture so that your staff see the
you.
value of such scenarios. If role play is
Clarify to make sure the doubt has truly
a normal practice, embarrassment
been removed in the customer’s mind.
will be minimised and staff will not
Refocus on the sale, after having removed
the doubt. be reluctant to get involved.
Situations with customers where
Always keep to these
doubts have arisen should be
discussed in team meetings. These
7 basic rules…
When talking to a customer with
are an opportunity to get other team
members' ideas and to look at ways doubts, remember these golden
of preventing them in the future. rules:
As a sales tool, develop a • Keep calm at all times. Never let your
portfolio which includes technical frustration show. If you feel yourself
getting agitated, take some deep
literature, customer testimonials, breaths to help you calm down.
articles in the press, references in • See doubts as opportunities to make a
books, and any other relevant sale. If you can remove doubts
information. This portfolio can be an successfully you will often find the
excellent sales reference when customer will become loyal to you and
discussing product selection with a your company.
potential customer. • Never take any comments personally.
The customer is not being critical of
you as a person; they have problems
Build up staff confidence
6 through role play.
with the situation.
• Always be prepared: know your
Role-playing those difficult selling product and have the skills to deal
situations is an ideal way of with the customer.

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32
LIFETIME VALUE See also: 26, 222

How to turn your customers


into lifetime customers

Successful retailing is a long-term affair. It is not simply about


making a sale—it is about keeping customers for life. All your team
members should know the lifetime value of your customers and
how to ensure that they work towards generating life-long
customers. Unfortunately, too many retailers start with good
intentions, but lack the commitment in building those essential long-
term relationships. The following advice will help in that regard…

Calculate the lifetime customers for life.


1 value of your customers. The key to lifetime relationships
is KIT—Keeping In Touch. The skills
According to data released by the
New Zealand marketing research required to develop lifetime links
company Go Direct, the lifetime value with customers are different from the
of a customer can be as follows: skills of product selling. So,
Supermarket customer NZ$250,000 encourage and train your team to
Motor vehicle customer NZ$150,000 foster lifetime value, to keep in touch
Women’s wear customer NZ$ 90,000 with customers, and to build genuine
Menswear customer NZ$ 30,000 relationships. Not only do they need
You can calculate the true value of skills training, but they also need the
your lifetime customer by using the commitment to make it work.
following formula:
Lifetime value of customer = Adhere to the 1-5-15-30
Average sale of customer x Frequency of
spending visits annually x Lifetime with your business
3 technique of follow up.
In most retail situations, the lifetime John Wren in Yes, thanks! I’ll take it!
value will vary between 5 and 7 promotes the concept of the 1-5-15-30
years, not, as is often assumed, 20 or follow up technique. A decision to
30 years. use this technique should be based
on the type of product purchased,
Keep in touch. the amount of money spent, and the
2
John Goman of American Express
relationship formed between the
salesperson and the customer.
believes there are only three ways to The 1-5-15-30 concept relates to
build any business: the days after the sale when a
Have more customers. salesperson should communicate
Have customers shop more often. positively with the customer.
Have customers buy more when they Day 1—a personally handwritten note
come in. from the salesperson to the customer is
Obvious perhaps, but just as obvious all that is required. This could be along
is the point he missed—you also the lines of a short thank-you and a hope
need to work towards building that the customer is getting pleasure out

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of the purchase.
Management Memo
Day 5—a telephone call may be in order.
Never start the telephone call with ‘Are T he 25 attributes of a good business-
customer relationship, ranked in order
of importance by long-lasting customers:
you happy with…?’. If you do, you may
get a negative response. Start with, 'I Being called back when promised
wanted to telephone you to make sure Receiving an explanation of how a problem occurred
you were enjoying…’. Being provided with information on how to contact
relevant people
Day 15—check again over the telephone. Being contacted promptly when a problem has been
Day 30—mail an added-value gift related resolved
to the purchase. Being able to talk to someone in authority
Being told how long it will take to resolve a problem
After 90 days, and every 90 days Being given valuable alternatives if the problem
thereafter, they should receive your cannot be solved
newsletter as a loyal customer. Being treated as a person, not as an account number
Being told how to prevent a problem in the future
Being given progress reports if the problem will take
Make people remember
4 you as a salesperson.
People do business with people, so
some time to resolve
Being able to talk to people without interruptions
Not being put on hold without asking
Being treated with appreciation for their business
your aim must be to build a person- Having a person, not a recording, answer the
to-person relationship, not a telephone
relationship with the business. To do Being given service people’s names and telephone
numbers
this, you need to make a lasting Getting through to a department on the first call
impression. Depending on your Being offered suggestions on how to minimise costs
business, consider such strategies as… Being able to talk, on the first call, to someone who
can resolve a problem
• Always hand your business card to
Receiving an apology when an error is made
the customer, preferably one with Being helped without being put on hold
your photograph so that the customer Having the telephone answered on the third ring
is reminded of what you look like. Being greeted with a ‘hello’ or ‘good morning’
• Send relevant newsclippings, articles Being able to reach the service area after 4pm
or new information on the product as Being addressed by name
and when it becomes available. Being able to reach someone after hours. 15
• If the person is interested in joining a
club that relates to the product, then
policies that outline achievable
introduce them to a club member.
• Send birthday or anniversary cards. strategies and embrace a constant
These work more effectively than program for training team members.
Christmas cards which get lost in the
Instigate a reward
volume of other cards received.
• At Nordstrom in the United States,
individual salespeople keep profiles
6 system.
Team members, as well as customers,
on their specific customers, enabling
them to match new products with
need recognition for building
relationships and you need to put in
identified customer needs/wants.
place a reward system for your team.
Rewards can be low cost, but show
Have written policies that
5 everyone adheres to.
Too many businesses fail because
that you value the dedicated team
member. Consider everything from
tickets to the movies, to dinner for
they are not consistent. Consistency two at a local restaurant, to
comes with having realistic written enrolment in a keep fit club.
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34
CUSTOMER SERVICE See also: 32, 36, 44, 218

How to improve
your customer service

Numerous surveys have been carried out over the years to


determine what kind of things upset customers when they go
shopping. After the findings of these surveys are collated and
analysed, the customer comments are found to be strikingly
similar. If you want to improve your customer service, then
obviously these surveys can provide some valuable guidelines
for action…

Keep your tills open Resist charging for


1 and your queues short. 3 wrapping or bagging.
In a recent Australian survey by Les Some 37 per cent of people surveyed
Barnett Advertising Agency, 44 per complained about having to pay for
cent of shoppers said this was their shopping bags and wrapping
biggest complaint—not enough tills services. Bags and wrapping are an
open at busy times; the result: queues! opportunity to promote added-value
The answer seems straight- services. Wrapping services at
forward: minimise those queues. Christmas, St Valentine's Day, Easter,
Have a policy where another till is Mother's Day, Father's Day, and
opened whenever a queue of four Secretaries' Day will be a pleasant
develops. But remember, when you bonus for most customers.
do so, invite the next person in line
over to the new till. If you don’t, the Limit staff overkill.
last to arrive may be the first to be
served—and you will still end up
4
Nearly one-third of customers get
with unhappy customers. annoyed by staff who they perceive
are pestering them. This highlights
Keep your staff up on the lack of sales training in many
2 product knowledge. retail businesses. Properly trained
team members can read customer
Over 40 per cent of customers
surveyed felt that lack of staff body language and know when and
knowledge about products was a when not to approach. Hold training
major disappointment. It is essential sessions on a regular basis to remind
that all team members participate in team members of these basic skills.
product familiarisation sessions.
Remove disinterested
Suppliers and manufacturers are
often keen to help as it is a win-win 5 staff.
The complaint that staff show little
situation. Alternatively, rotate the
leading of these product knowledge interest in customers is a reverse of
sessions around your team members. the last point, but again nearly one-

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35
Vol. 1: See 248, 388, 390
Management Memo
third of people surveyed believed
this to be a major turn-off. The
solution is the same as above— V alue innovators do not worry about
staying ahead of their competitors.
They worry about staying ahead of their
although the key is to recruit keen customers. 16
people with personality. Given the
correct skills, enthusiastic team
members with personality will enjoy Appraise your staff
the challenge of selling. 9 regularly.
All businesses should carry out staff
Welcome legitimate
6 customer returns.
Being made to feel in the wrong
appraisals at least annually. The
following appraisal sheet is a useful
first step in turning your staff into
when returning products upset 17 winners in terms of customer service:
per cent of those surveyed. The
majority of customers are genuine Assessing Staff Selling Skills
APPRAISAL FORM
when they return products and, as 4 - Excellent 3 - Good 2 - Average 1 - Poor
retailers, we should accept their
4 3 2 1
honesty. Again, team training on SALES IMPRESSION ■ ■ ■ ■
how to deal with complaints and Appearance and approach
returns is necessary. e.g. alert, poised, at ease, pleasant
SELLING ATTITUDE ■ ■ ■ ■
e.g. Enthusiastic, mature, socially
Assist customers
7 to load their cars.
Your company should have a policy
positive, sincere, convincing, humour
SPEECH
Vocabulary, voice, speed of talk,
■ ■ ■ ■

grammar, pronunciation
of when and how to load cars, since ■ ■ ■ ■
QUESTIONS
12 per cent of customers complained Use of open, closed and leading
about this lack of service. One added questions
touch is to provide boot liners LISTENING FOR NEEDS ■ ■ ■ ■
Posture, attention, showing for
emblazoned with your name— understanding, identifying needs
customers appreciate that you have and/or wants
taken that extra bit of care. KNOWLEDGE OF SUBJECT ■ ■ ■ ■
Facts, information, personal tips
based on experience
Don’t patronise
8 customers.
REASONS FOR BUYING
Benefits, advantages to customer
■ ■ ■ ■

■ ■ ■ ■
One in ten customers resented OBJECTIONS
patronising and condescending Recognised, handled tactfully,
assurance given, converted into
treatment from team members. The reasons for buying
great majority of surveys conclude USE OF SALES AIDS ■ ■ ■ ■
that staff-customer interrelations lie Use of product, quality and
ingenuity of sale aids
at the heart of customer complaints
ORGANISATION ■ ■ ■ ■
about retail outlets. For this reason, Opening, development, specific
regular training sessions on human answers, close of sale
relations should be an essential part ALTERNATIVE PRODUCTS ■ ■ ■ ■
of all your staff development Use of link (tie-in) items
and/or alternative products
programs.

Just about Everything a Retail Manager Needs to Know


FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS
36
LOYALTY PROGRAMS See also: 18, 26, 222

How to develop
a customer loyalty program

A trend in recent years has been the development of loyalty


programs in retail businesses. The objective is to ‘lock' your
customers into your business at the expense of other businesses in
the same retail sector. Loyalty programs started in the airline
industry and have now spread to other areas of retailing, primarily
led by supermarkets in the United Kingdom. Consider these
suggestions if you want to retain your customers’ loyalty…

Focus on loyalty, Sell the benefits.


1 not discounts. 3
Your aim must be to sell the
When establishing a loyalty program,
your objective is to establish loyalty, privileges of being in your loyalty
not to buy loyalty by simply using a club. This list of benefits will differ
card to offer discounts. Your priority across retail sectors, but can include:
must be to provide regular, • Invitation to special events
• Invitation to guest speakers
dedicated customers with privileges
• Exclusivity to unique products
by joining your ‘loyalty club’. • Offer of new products prior to mass
release on market
Set up a database • Upgrade in services
2 before you start. •

Exclusive services
Gifts on birthdays or at Christmas
Prior to launching a loyalty program, • Financial incentives to purchase more
establish a database of names, • Visits to attractions not open to others
addresses and customer interests. • Network incentives with other retailers
First, obtain a database software used by your customer database.
program for your computer. There
Be upmarket in
are many packages on the market
and you should select one which
4 presenting the concept.
Your customer base is familiar with
suits your own specific requirements.
With the software in place, you can credit card use and your loyalty card
then go about promoting your must be of the same calibre if it is to be
loyalty program to customers. appreciated by customers. The words
The application form for your Privilege Card, Gold Card and Club
loyalty program should introduce Card are names that help customers
the benefits of joining your club and accept the card as a privilege.
request the following information for
the database: name, address, Devise your loyalty
telephone number, product range
interests. Revise, clean and update
5 strategy.
Your objective is to win loyalty and
your lists every twelve months. repeat business. The airlines do this

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37
Vol. 1: See 248, 388, 390

with their frequent flyer programs


Management Memo
where customers are encouraged to
accumulate points. The more points
N ordstrom in the United States is
recognised around the world for their
customer service and for generating
they collect, the more prestigious the customer loyalty. The keys to their success
privileges. In your situation, one have been identified as follows:
successful strategy might be for ■ If you treat customers like royalty and let
customers, every time they shop them know that you will take care of them, they
with you, to collect points which come back to you.
can then be converted into privileges ■ Top salespeople do not put things off until
over a given time frame. For example: the end of the day. They get them out of the
way so they can start the next day fresh.
• Look at your average sale per
customer, take that average sale and ■ When customers enter a department,
salespeople make sure they are acknowledged.
allow the consumer to collect 10 points
They are relaxed and unhurried in order to help
if they spend above your average sale.
the customer feel the same way.
• The more money they spend, the more
points they are given. ■ Top salespeople keep the process simple
• Start your reward program at 80 and easy by helping the customer eliminate
points (8 x above average sale target). the things not wanted. They constantly ask for
At 80 points any reward should be to feedback because the more information they
the value of the normal average sale. have, the better they can serve the customer.
• Extra rewards could then be obtained Price is never a primary issue.
at 100, 160, 200, 320, 400, 800, 1500 and ■ ‘Trust’ is the coin of the realm. Salespeople
4500 points. earn the confidence of customers by being
well versed in the merchandise they sell. They
Notify customers at regular intervals are not just selling clothes and shoes. They
so they know where they stand with are also selling service.
their points. This is an ideal excuse ■ Top salespeople rely on the tools that
to communicate with them about a Nordstrom provide, including a personal
range of other matters. customer book to keep track of pertinent
Should customers pay for joining information on every customer.
loyalty clubs? If you put a price on ■ The telephone is a powerful tool for
generating business, improving productivity
joining the club, you have the
and saving time.
opportunity to include a thank-you
■ Follow-through is important. Top
gift later. salespeople are not looking for the big score.
They are committed to nurturing an ongoing
Build relations with business relationship. 17
6 loyalty members.
Once you have established a loyalty have access to the database, even
program, you must ensure that your know how to use it and update it.
team plays the game. Customers
Explore ‘out house’
now believe they are special in your
business and they expect special
treatment. They expect recognition,
7 retailing opportunities.
Loyalty programs allow you to
their names to be used, comments on promote and sell your products by
their last purchase, and joint mail order to targeted customers.
celebrations of special events in their This could be considered as your
lives. Here, your staff are key people next retailing opportunity once a
—and for them to achieve, they must loyalty program is firmly in place.

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FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS
38
CUSTOMER SURVEY See also: 214, 222

How to conduct a customer survey

Successful retailers know their customers exceptionally well. They


know their customers’ needs and wants—because they ask them.
This is usually done through the use of a mix of techniques,
including customer forums, questionnaires, surveys, by walking the
floor and talking to customers, and through the use of mystery
shopper surveys. One of the simplest techniques is the customer
survey. If you want to get a true picture of how consumers feel
about your business via a survey, then consider these guidelines…

Know why you are than one over-lengthy questionnaire.


1 conducting the survey. Limit the questions to one side of one
sheet of paper if possible.
You are collecting data and you are
asking people to commit their time to Apart from the customer’s name,
the task. For this reason, the process address, and phone number, basic
must be systematic, targeted, information you may seek could
efficient and likely to lead to focus upon such issues as:
actionable outcomes. So, before • what they like about your
embarking upon the survey, be able business
to answer these questions: • what they would like to see
• What kind of data am I seeking? improved
• Why do I need this information? • what product/s they want that
• When do I need the information?
• How will I collect this information? you do not sell.
• Within what time frame will the data
be collected? Structure your survey
• How will the information be collated
and analysed?
3 wisely.
Two basic approaches may be
• What will I do with the data I get?
• Will the data really lead to action? adopted in structuring your survey
Only if you can provide satisfactory form. The easiest and quickest
answers to such questions should method for customers is the tick-a-
your survey proceed. box technique. For example,
Please indicate your satisfaction
Keep the survey with our service to you, our customer:
2 form simple.
The key to a successful response rate
Very
satisfied
Satisfied Dissatisfied Very
dissatisfied
1. Staff attitude ■ ■ ■ ■
is to keep survey forms simple and
2. Staff knowledge ■ ■ ■ ■
friendly. Limit the information you
3. Staff appearance ■ ■ ■ ■
require to avoid taking up too much
of your customers’ time. It’s better to 4. Value for money ■ ■ ■ ■
conduct a series of short surveys A second approach is the open-

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Vol. 1: See 222, 384
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○ ○ ○ ○ ○ ○

ended question format: Management Memo


1. Why do you like to shop in our store?…………
2. What would you like to see improved?………
3. What products would you like to see added to
I f a company is truly customer-driven, the
utmost attention should be given to find-
ing out what customers really think of
the
our range?…………… business. 18
4. What do you think we do least well?…………
Or try a combination of both methods.
Show your appreciation.
You may like to make your
survey form stand out. The survey
sheet at one Melbourne hotel in
6
Winning retailers will tell you that
Australia depicts a 30cm high ear you must respond to all suggestions.
with the words ‘We are listening’ If the customer provides a contact
across it. point, then you’ll be on a winner if
Don’t forget to indicate briefly you take the trouble to communicate
why the survey is being conducted with them, replying in a positive and
(‘We value our customers’ opinions friendly manner to their positive and
and seek your concerns and negative comments. Your response
suggestions to help us improve the should ideally be made within 48
quality of our service’) and a sincere hours of their survey form being
thank-you for their time. deposited in the box.
Provide an incentive.
4
Some people will fill in survey forms
7 Use the survey
as a marketing tool.
Writing to a survey respondent
as a matter of course. Some will not
provides a great opportunity to
be bothered. Others might need an
begin building a relationship with
incentive. As a token of your
your customer. Consider sending
appreciation, you may offer a prize
them a voucher with your letter, as a
draw to reward one or more of those
thank-you gift. The voucher should
who complete the questionnaire. If
you do this, your customers are more be valid for about a month and its
likely to provide you with their name aim is to encourage the customer to
and address, a great help if you are return to your store and increase
building up a customer database. their average spend.

Place survey boxes Act on the results


5 near the exit. 8 effectively.
Use the results of your survey as a
Completed surveys should be placed
in boxes near your store’s exit. The stimulus to improving your
response will be greater if you provide customer service. The results are
there a small area with bench and only meaningful when they have
pens where customers can complete been interpreted by you or
their survey forms. Make this location cooperatively by your staff. A survey
very conspicuous and display a large will only prove its worth when you
sign above it in an appropriate spot. act on its findings.

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FOREWORDCONTENTS PREFACE TESTIMONIALS
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40
CUSTOMER FORUMS See also: 38, 214, 216

How to set up a customer forum

If you want to win customers over to your business, then the


best advice you can follow is to listen to what they say. This
can readily be done by walking the store and talking to your
customers. Alternatively, if you want to show them you are
committed and serious about listening to them, one of the
most valuable techniques is the customer forum or panel…

Select the people you Exclude team members


1 want to attend. 3 from the forum.
Contrary to popular belief—that Forums are best held with customers,
these days people are reluctant to owner and, if necessary, a facilitator
give of their time, you will find that present. Team members should be
invariably your customers will be excluded—for there will be times
more than happy to join a forum. On when a customer might want to
the first occasion invite a wide- express a concern about one of the
ranging cross section of customers. team, and they find this very difficult
As you develop expertise in this to do with the team member present.
technique or develop a particular
focus, you may wish to target specific Keep the format simple
groups within your market sector. 4 and run on time.
To encourage full participation from
Issue an invitation.
2
When issuing an invitation to
customers, keep the group size to a
minimum of 7 people and a
maximum of 11. Smaller groups can
customer participants, never offer get embarrassed and larger groups
payment for their involvement. Your are often dominated by a few vocal
customers should want to come and people.
to offer advice as a favour and as a When you introduce the session,
means of improving your service to set the time limits and keep to this
them. If you bribe them (as some schedule. Between 30 and 45 minutes
may perceive it) you may get the is ideal. When you close after the
advice they think you’d like, rather alloted time, you will find that some
than the honest comments you really customers will want to stay over and
need. Of course, provide continue the discussion. This chat
complimentary refreshments— non- session can be invaluable.
alcoholic drinks, cakes or biscuits— Do not set a strict agenda—it’s
for this will be expected and something your customer guests can
appreciated. do. What you believe is essential may

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not be considered that way to your Management Memo
customers. Remember the aim of a
eargal Quinn is recognised as one of the
customer forum: to focus on what
your customers believe is important.
F gurus in his advocacy of customer fo-
rums. In his supermarkets he uses the follow-
It is wise, however, to have a few ing listening channels:
general areas for exploration should • customer panels
the discussion begin to run dry. • customer comment forms
• customer service desks
Seek customer input. • handling customer complaints positively
5
The sole aim of the forum is to listen.
• inviting customer inquiries directly to
staff
• management staff accessible to
Never argue, or justify existing customers
practices from your perspective, or • formal market research
answer back. If you do, you will lose • media comment. 19
credibility, your customer guests will
be reluctant to participate, and you
could do harm to your business- customer forum and agree on what
customer relationship. action should take place.

Write to your
6 Keep your staff informed.
7 customer guests.
After the forum, send an internal Write to your customer guests and
newsletter around your sales team thank them for their time and input.
within a day or two. Your staff will Highlight what changes you will
want to know what has happened. introduce into your store as a result
Keep the message positive. If you of the session. Make sure you act
have any negative feedback about upon your promises immediately,
individuals, this should be addressed because, as involved customers, they
in private. At your next team will now be looking to see if those
meeting have a session which changes actually take place in the
focuses on feedback from the store.

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FOREWORDCONTENTS PREFACE TESTIMONIALS
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42
INCREASING CUSTOMER BASE See also: 32, 36-8, 62, 66, 186, 222

How to increase your customer base

The key to building a successful retail business is to build and


foster a loyal customer base. Getting new customers is only
the first step: you will need to develop relationships with those
customers so that these linkages can expand over time into
lifetime partnerships. It’s possible to do this by converting
identified prospects into advocates and using a simple step-
by-step formula…

Help your customers ladder. They use word of mouth to


1 climb the ladder. promote you and your business to
anyone who wants to listen.
If you think of your business as a
5-rung step-ladder, your aim should Your aim is to get everyone—
be to help as many people as possible beginning on the prospects' step of
to climb to the top of that ladder… the ladder—to climb continually to the
Suspects are those people on the top to become advocates. Of course,
bottom rung of your ladder. They’re this all takes time, and disgruntled
forever suspicious of you and your people can quickly drop off the
store. Money spent on them may be ladder.
money wasted.
Begin the search
Prospects are on the second-bottom
step. You’ve never invited these
2 for prospects.
people into your store but, if you did, To build a strong customer base,
chances are they would willingly you’ll need an advertising budget
enter. An advertising program could because you will have to invest on an
be directed to these people. ongoing basis to identify new
customer prospects. You can attract
Customers are people who come to
these people through newspaper and
your store, and who are also shared
magazine advertising, the Yellow
by competition. They are not loyal to
Pages, radio advertising, word of
your business, probably because you
mouth, sponsoring events, mail-outs
have never asked them to be loyal.
and leaflets, and by appealing to
Clients are those on the second top them as they pass your premises.
step. They are good customers, loyal
to your company, but have never Convert prospects
promoted you to their friends and
colleagues. Again, you may have not
3 into new customers.
A prospect who enters your store is
asked them to do so. not a customer until you convert
Advocates are at the top of the them—getting them to buy

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something from you… and then
wanting to come back. To do this, Management Memo
you’ll need to apply all your skills of
conversion—welcome the prospect
to your business, get them interested A dvocates can provide testimonials for
you to promote your business, but
you'll need to adhere to the following rules to
in making a purchase, sealing the
make testimonials work:
deal to their complete satisfaction, • Make them believable.
and, if possible, obtaining their name • Make them honest.
and address so you can follow up the • Make them spontaneous.
purchase later. • Make it easy for your advocate to give
a testimonial.
Convert new customers • Make sure you respect their privacy if
4 into good customers.
requested.
• Have the testimonial givers provide
Your new customer can now be them in a form that is usable.20
added to your existing customer
database. It should be your ongoing
objective to convert these customers you might consider for
into good customers (or clients) by accomplishing this would be
involving them in a campaign to promotions to them on their
increase the frequency of customer birthdays, club functions, Christmas
visits. Most retailers have details of cards and presents, reminders of
retail averages in terms of visits for important events, exclusive
their sector of the market. Your aim invitations to special events—the list
is to be higher than this average—for is limited only by your imagination.
example, if the average customer
visits a hardware store six times a
Remember the formula…
year, you want your average to be
eight.
6
In the end then, developing a large
Your campaign might include
and loyal customer base and
frequent-user programs, an in-house
increasing the average sale is a
club, a children’s club, exclusivity
combination of merchandising skills,
evenings, or other special events.
selling skills and human relations—
and a commitment to the following
Convert good customers
5 into advocates.
Your goal is to get to know your
formulae:
Prospect + Conversion = New customer
good customers extremely well, to New customer + Existing customers = Total
maximise the potential of the store- customer count
customer relationship and, in time, to Total customers + Frequency of visits = Total
turn these people into advocates of customer visits
your business throughout the Total customer visits x Average sale = Return on
community. Among the strategies investment

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44
COMPLAINTS See also: 26, 30, 34

How to handle those complaints

Every business gets complaints—it’s all part of doing business. In fact,


in the retail trade, 14 per cent of customers have a complaint and 75
per cent of complaints go to the checkout or counter. Little wonder
then that dealing with complaints should constitute an important
part of any store training program. The key things to remember are
that complaints must not be taken personally and that they should
be seen as opportunities to improve your business procedures. To
handle complaints effectively, consider this advice…

Be aware of the impact Adopt the LEAR technique


1 complaints can have. 2 of handling complaints.
Research into the impact of customer The LEAR technique of dealing with
complaints reveals some interesting complaining customers is very
statistics: simple—and very effective…
■ According to recent research 4 per L isten
cent of unhappy customers complain E mpathise
—the other 96 per cent of those A sk Questions
people with complaints leave your R esolve Problem.
business without you knowing why!
We’re advised that the average
Listen and show
person who has a complaint will then
tell 9 to 10 other people, while
customers whose complaints have
3 you’re listening.
Listening to customers complaining
been resolved will tell 5 to 6 people. It is one thing—but the important thing
is the same old story: bad news
is for the customer to believe you are
travels twice as fast as the good news.
listening to them. To show you are
■ Between 56 and 70 per cent of actively listening, there are six steps
customers who have a complaint will you should follow:
do business with your store again—if
the complaint is resolved. But, 96 per (a) Make eye contact.
cent will do business with you again (b) Nod in agreement.
if you resolve the complaint within a
24 hour period. (c) Give verbal encouragement.
■ According to Kwik Kopy Newsletter (d) Display positive body language.
(February 1998), US research shows (e) Ask relevant questions.
that, in terms of customer complaints,
(f) Give a summary and feedback.
20 per cent of fault relates to
employee attitude and 40 per cent lies By showing you are listening, you
with company procedures. The have taken an important step in
remaining 40 per cent of blame
resides with customers having the
defusing the issue and in resolving
wrong expectations. the problem.

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Empathise with
Management Memo
4 the customer. A complaint is a ‘gift’ to your business
and should be treated as such. Too
Empathy is putting yourself in your many businesses take a negative view of
customers’ shoes and seeing the complaints, when in fact they are a positive
situation from their perspective. The opportunity to build your business. Consider
key is to ask how you would feel in this eight-step formula for dealing with com-
their position. Again, it's important plaints:
1. Always say thank you
to actually show the customer that 2. Explain why you appreciate complaints
you are empathising—by actively 3. Apologise for mistakes made
listening, rewarding and 4. Promise to do something about it immedi-
acknowledging. Showing empathy ately
does not mean you agree, but you 5. Ask for the necessary information to solve
must be genuine and use positive the problem
body language. Use empathy 6. Correct the mistake promptly
7. Check the customer is satisfied
statements such as: 8. Prevent the mistake happening in the fu-
‘I can understand your ture.21
disappointment.’
‘You were right to let me know.’
‘You did the right thing in
Resolve the problem.
returning the item.’
‘I know how you feel.’
6
Resolve the problem to the
Seek clarification customer’s satisfaction as quickly as
5 through questioning.
Ask open questions as you attempt
possible. Consider the lifetime value
of the customer, not the cost of
resolving this particular issue. Once
to diagnose the problem and never
the problem has been resolved, make
attempt to justify your situation. The
sure the rest of the team knows what
customer is not interested in your
has taken place. This feedback to
problems and justification may just
staff will help your team deal with
make them angry.
similar situations in future, perhaps
When dealing with complaints:
provide you with additional ideas
DO Listen. for the next time, and help you to
Isolate the problem and take appropriate action to ensure this
restate it. complaint never resurfaces.
Make the complaint a
positive opportunity for
your company.
Know your subject.
DON’T Interrupt.
Argue.
Evade the issue.
Lose your temper.
Reintroduce an objection
that has been dealt with.

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46
CUSTOMER SERVICE See also: 16, 18, 22, 24, 26, 34, 36

How to ensure your team


is customer friendly

The retail trade is often in the firing line over low levels of customer
service. A recent public opinion poll found that Australians were
'concerned and bothered' about AIDS and nuclear war—
followed by the rudeness of shop assistants! A Time magazine
survey discovered that 85 per cent of customers felt service could
be improved, and in their book The Customer, Bob Ansett and
John McManamy condemned our service policy. The message is
clear: we must become more customer friendly…

Develop a customer procedure for reprimanding them


1 service policy.
If you do not have a written service
when they drop below those set
standards.
policy, you should write one, for this • Employee training. Detail what
must be the first step in achieving a steps you will be taking to ensure
friendly customer service culture your staff receive appropriate
throughout your organisation. training in the skills of customer
Indeed, the implementation of any service.
staff training program must be based • Chasing errors. Do you have a
on a company service policy—or procedure in place to tackle
how will participants know what complaints? Your aim should be to
standards are required by the reach zero defects in your policy
employer? and customer service.
Your policy should at least cover
the following areas:
Train the team to be
• Service Strategy. Where does your
organisation fit into the
2 customer friendly.
Take steps to ensure that all team
marketplace? What level of
members who face or talk to
excellence do you require?
customers are trained in the skills of
• Customer Communications. How do selling. With your company's service
you communicate your service policy as the yardstick, your trainers
strategy to your customers? and staff know where the
• Clear Standards. Write down your organisation stands with regard to
quality standards, courtesy customer service standards.
standards and speed of delivery. Some companies provide training
• Deliveries. Design a customer through in-house facilities and staff,
friendly system. while others use outside agencies.
• Employee Communication. Outline a Training should include the entire
strategy for telling all employees team. We often forget that the most
what your standards are and a important person in the team is the

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YOUR STORE YOUR PRODUCTS 47
Vol. 1: See 206, 226, 230, 242, 248, 388-90
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
checkout operator as they see every
customer—and even the storeroom
Management Memo
staff deal with internal customers.
For starters, any training program
should include:
P roviding the right customer service var-
ies between male and female shoppers.
According to research carried out in Singa-
• using body language in retailing pore:
• Male shoppers earn more than females.
• using open, closed and leading • Males shop less, but spend more when
questions they do.
• being a good host, consultant and • Females rely on word of mouth; males rely
seller on the newspaper.
• Females are more impulsive; males are
• the skills of benefits selling more planned.
• using pre-close and close • Males are more influenced by the service
questions. provider; females are influenced by col-
leagues and friends.
• Males consider packaging, services, and
Following up your merchandise; females consider sales pro-
3 training.
Unfortunately, many companies put
motions, brands, and price.
• Females shop longer hours. 22
people in training courses and
assume that, thereafter, the problem
of customer service has been solved. supervisor. Both parties then meet to
Formal training is only the start. compare ratings. Clearly, if the
Training must be followed up. The employee believes their selling
new skills must be reinforced in the attitude is ‘excellent’, and the
workplace and, once people have supervisor allocates a ‘poor’ rating,
been trained, they need appraising to then this is a topic for exploration
see how, and to be told that, they are and a decision as to what action
improving. should be taken to improve the
employee’s skills in this area.
Compile a selling skills
4 appraisal form.
5 Institute a customer
A typical staff appraisal form friendly staff award.
appears on page 35. This should be Reinforce the importance of
used to measure the selling skills of customer friendly service by
your staff on a regular basis—at least introducing a staff award, to be
once a year. Ideally, the form should presented monthly to the team
be completed by two people—the member who best demonstrates the
person being appraised who makes a standards and qualities espoused in
personal judgement on their current your company's customer service
performance, and by that person’s policy.

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48
PA SYSTEM See also: 22

How to profit from your PA system

The public address (PA) system is a great way to promote your


business—and it costs you next to nothing! Many firms fail to use their
public address system effectively because they see it only as
a means of communicating with staff or announcing specials. If you
can use your PA creatively, it will become a promotional medium that
will enable you to increase sales and customer goodwill by simply
using equipment already installed and without the extra expense of
advertising. Make your PA work for you by following this advice…

Adopt a professional • a trophy for the ‘PA Person of the


1 approach. Week’
• a 'Customers' Favourite
Being professional means being well
prepared. Ensure that you and your Commentator' award
staff know how to get the best results • bonus points for participating –
from your PA by understanding the with store discounts as a prize.
medium you are using. To develop the increased confidence
Whether you have a ‘fixed’ or that comes from an ability to speak
‘roving’ microphone, it is vital to in public, the following tips will
remember that you are selling with prove useful…
voice—so the choice of a presenter
requires more than simply selecting Plan what you
someone who ‘just happened to be
handy’ or had the confidence to pick
3 want to say.
Being well prepared means knowing
up a microphone. Arrange regular
what you propose to say, as well as
practice sessions for your staff or,
how you intend to say it. Work from
better still, for a voice coach to give
an outline rather than a script so that
them some professional training.
you don’t give the impression that
Nothing is more off-putting to
you are simply ‘reading aloud’ over
customers than the ‘nasal whine’ or
the PA. The aim is to sound
‘shotgun speech’ often associated with
spontaneous:
PA announcements in retail stores.
• Speak from notes–not from a fully
Encourage staff scripted presentation.
2 participation.
Because most people have a fear of
• Keep the wording clear and
simple.
public speaking, it is no easy task to • Jot down key points and special
find staff who are willing to use the items.
PA. The answer is to make training a • Arrange the points in logical order.
more attractive proposition. Offer
• Decide on your main message–
incentives and rewards such as:

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WINNING OVERMANAGING PROMOTING MANAGING INDEX
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YOUR STORE YOUR PRODUCTS 49
Vol. 1: See 52

and say it twice: once at the ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○


○ ○ ○ ○ ○ ○
beginning and again at the end.
• Practise ‘ad libbing’ from your
Management Memo
outline.
The result will be a more personalised N oreen Emery of Perth-based Speech
Dynamics, the professional voice
coaches for the retail industry, suggests
and professional use of the PA. that
retailers should resist the temptation to bring
in someone from outside to sell on their
PA.
See your voice
4 as a selling tool.
Making a connection with your
The whole idea is to strengthen customer
and staff relationships. A familiar voice
face will help to personalise your store
or
and
provide the sense of belonging that main
customers means making it easy for tains your customer base. 23
-
them to listen. People tend to ‘tune
out’ if your voice is too loud, too soft,
too fast, or too slow – or just plain
boring. • Run a competition aimed at
To ‘sell well’ on the PA, your matching staff photographs with
voice requires: staff names.
Clarity. People need to hear and
• Give meal ideas, kitchen tips, or
understand what it is you are saying.
Speaking too fast or not distinctly handyperson hints over the PA,
enough is a major PA problem. Saying then direct people to the
the alphabet slowly and clearly with appropriate department.
lots of mouth movement is an
excellent way to warm-up. • Set up a weekly promotional
theme, e.g. ‘Sweet Week’, ‘Low
Colour. People need to stay interested in
what you are saying. A monotone Calorie Week’, ‘Family Favourites
makes them ‘switch off’ and start Week’, etc.
thinking about something else. If you • Work with your local community
stay interested in what you are saying,
it will be reflected in your voice and in promoting forthcoming events
make it more expressive. over the PA and tie these in with
Confidence. People need to be convinced the benefits of buying at your
of what you are saying. Research store.
shows that enthusiasm and confidence • Hold ‘Valued Customer’ days in
are contagious. Let those feelings
show in your tone and your customers which you target specific groups
are much more likely to respond. with discounts or give-aways.
Be creative, use your imagination
Be innovative.
5 and you will discover many new
opportunities for building profits
Make the PA a means of getting-to- and promoting business over your
know your customers, and vice- PA.
versa. You can, for instance:
• Introduce yourself and your staff
over the PA. If you have a large This topic was provided by Noreen
store, introduce a different Emery, Speech Dynamics, Perth, Western
department each week. Australia.

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50
CLOSURE See also: 56

How to close a sale

The point at which you ask the buyer for an order is the close.
Much of the effort in planned selling is wasted if you fail to
close the sale effectively, so it is evident that attention to the
close is vital to your success…

Tackle closure Select the appropriate


1 with confidence. 2 close to seal the deal.
Closure can usually be accomplished
No matter what technique is used to
close a sale successfully, it is using one or a number of techniques.
important that the process be The type used will vary according to
undertaken positively, realistically, the situation and it should be the
logically, confidently, and with close (or closes) most appropriate for
appropriate timing. Remember: that situation. Very often more than
• Always assume that you are going one close will be used.
to get the order. Consider, and apply as required,
the following:
• Use positive phrases. Never use
statements such as ‘Would you Summary Close—Sum up your sales
like to have this?’, or ‘Will this be story, particularly if you have been
enough?’ interrupted by customers, telephone
• Be persistent. Never give up at the etc. And then get down to quantities.
first ‘no’ but be aware of the point Physical Close—Some types of
when the order is totally lost and promotion make a very positive
further persistence will cause ‘physical’ close possible. You may,
offence. for example, be selling a bonus offer
• Link your closing comments to the buyer and there is no more
logically to the overall sales effective way of closing than actually
presentation. giving them part of the bonus on the
spot. ‘That’s your bonus— just on
• Let your whole tone reflect your
this small order here’.
confidence in the proposition and
give the impression that you Buyer's Remark—The buyer will
expect to sell the product. often make some remark which will
• Keep your body language give you a lead into the close. For
positive. example, ‘You were saying just now,
Mr Buyer, how popular this line has
• Maintain eye contact with the
been recently’.
customer.

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YOUR CUSTOMERS YOUR BUSINESS
YOUR STORE YOUR PRODUCTS 51
Vol. 1: See 98, 212

Minor Point—Very often the buyer ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○


○ ○ ○ ○ ○ ○
has almost decided to purchase yet
requires a minimum amount of Management Memo
persuasion to get final agreement on
an order. A very effective method of T he important thing to remember about
sealing a deal is—never give up, as the
following statistics reveal…
closing in such circumstances is to
check some point of detail with the 44% of sales people give up after one ‘No’.
buyer, such as, ‘Will you be wanting 22% of sales people give up after two ‘No’s
’.
a copy of the order?’ or ‘Let me see… 14% of sales people give up after three
will you be wanting it delivered to 21 ‘No’s’.
or 23 High Street?’ 12% of sales people give up after four ‘No’s
’.
Apparent Concession Close— In other words, 92 % of sales people give
up!
Sometimes a part of an order may be Perhaps what they didn’t know was that 60%
too large, or contain unacceptable of all customers say ‘No’ four times—be
fore
sizes or colours. This may or may not saying ‘Yes’! 24
be deliberately planned. An
acceptable way to close is to
seemingly give way on one part of should attempt to find the reason for
the order—for example, ‘Obviously not buying. This is an objection, so
the 5 litre size is too much for you, by addressing the objection in
Mr Buyer, so can we provide you isolation, you can use it as an
with the 2.5 litre and 1 litre sizes?’ opportunity to close.
Verbal Proof—This type of close is Alternative Close—When using this
used when you quote the examples of type of close you get the customer’s
other customers. For example, ‘I acceptance by asking which of two
have a customer on the other side of alternative orders is prefered. The
town and they felt this particular buyer may then miss the fact that a
offer was ideal for their situation— third alternative—of not buying at
which is very similar to yours’. all—is also an option.
Fear Close—This close puts the point Assumptive Close—Assume you are
that the customer will be missing going to get the order and simply
something if the order is not placed proceed to write it down, although
now. You can stress that the deal is care must be taken with this close to
too good to miss or that, if the ensure the timing is right. This is a
customer does not take the product very effective close when well
then, the opportunity will be lost executed.
(appeal to the relevant buying
motive). Usually one of the preceding types of
Isolation Close—Very often you will closes dominates but, more often
attempt to close yet find that the than not, a combination of two types
customer says ‘no’ to the order. You is successful in practice.

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52
GIFT WRAPPING See also: 54, 104

How to gift wrap

Gift wrapping is an essential part of retailing today and your


team should be trained in this art. A store that is gift wrapping
professionally will be perceived as offering more value for the
customer and will be able to charge more for its products
because of this extra service.

Establish a gift wrapping Step 1: Place box in centre of paper.


1 centre.
Position the gift wrapping station Wrap paper around.
away from your main counter. If
customers are in a hurry and are
being held up because a staff
member is gift wrapping for another Step 2: Secure one end
person, you will have one happy Cut paper.
customer and a number of unhappy
ones.
At your gift wrapping station Tape fold
make sure you always have readily
available:
scissors, sticky tape, seasonal tape Step 3: Repeat the process at the other end.
(birthday, Christmas etc.), seasonal
Step 4: Add rosettes, ribbons, glitter and so on,
gift wrapping paper, glitter pens,
glitter stars, glitter glue set, string, as requested by your customer.
ribbon, sticky back bows or rosettes,
Blu tac, gift tags, and a pen. Learn how to wrap
You should always have a checklist
near your gift wrapping station to
3 awkward shapes.
Awkward shapes usually present the
ensure you have adequate quantities gift wrapper with a problem and call
of the items you need. for a measure of creativity from your
staff member.
Master the art of
2 wrapping boxes.
Most of us are relatively skilled at
Of course, the key is, whenever
possible, to find a box in which to
wrap the gift. On other occasions,
wrapping plain boxes. Most of the creativity and experience are helpful
time the paper needs to be only assets.
slightly larger than the item being Consider the art of wrapping a
wrapped. bottle…

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53
Management Memo
Step 1: Roll the bottle up in wrapping paper:
Wrapping paper
M ake sure your team practise gift wrap-
ping prior to them wrapping in the
store. It’s important that they look proficient
and expert when dealing with your custom-
ers. 125
Step 2: Tape the side as shown:
Tape Taped side Tape Step 2: Twist the Step 3: Tie the bottles
bottles in opposite together using
directions and fold ribbon or a different
the bottles down: coloured paper:
Rope
effect
Step 3: Create a cracker by using ribbon:
Bow

Ribbon

Step 4: Add a rosette to give the impact:

Consider the art of wrapping sweets


or similar items in a cone…
Step 1: Mark the half way point on paper:
-------------

An objective of retailing is to add


value and, in doing so, you will often
find yourself gift wrapping two
bottles rather than one…
Consider the art of wrapping two Step 2: Roll the paper into a cone using the half
bottles… way mark as the point and then tape it:

Step 1: Roll up the bottles in wrapping paper and Roll into


tape. Fold the ends under each bottle and seal cone.
with tape: Rolling
Wrapping movement
Sealed Tape paper
ends

▼ Step 3: You now have a cone you can fill with
relevant product. Once you have filled it, twist
the top closed and tie with ribbon. You will then
need to tidy up the top with a pair of scissors.
Ref: Asda Supermarkets, UK

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54
SHOPPING BAGS See also: 150

How to select and


fill a shopping bag

Selecting the best ‘carry home’ system for your customers is becoming
a major issue in retailing. We need to be aware of the cost involved,
customers' needs, environmental concerns, as well as the best means
of looking after the product safely. But whatever system is used, if the
shopping bag has been packed poorly, the resulting negative reaction
could damage your business reputation. Considerable thought should
go into the selection and filling of shopping bags, and your staff need
to be trained to handle this task correctly…

Be aware: bagging is • 58 per cent of consumers prefer


1 an expensive exercise.
paper bags, whilst 36 per cent prefer
plastic bags.
Spend a little time thinking about the • Consumers like bags to have
importance of shopping bags to your handles, be strong, stand up in the
company's bottom line: car, be re-useable and be the size
• The Wakefern Food Corporation in the that they can easily handle.
United States studied 5,000 bag • In Europe, especially in supermarkets,
transactions in 1997 to evaluate the retailers are now issuing
best way of managing bag-filling in environmentally friendly bags that are
supermarkets. Grocery bags cost 0.6 to provided for life.
1.3 per cent of the average sale, the cost • Again, in Europe, customers can
varying depending on the type of bag, purchase large plastic boxes which are
size and handling system. loaded in the supermarket and placed
• The costs of bags directly relates to the directly into their cars.
training of your team. For example, if
an assistant puts 12 items in a bag, All of which means that you
rather than the average of 6.3, then a should spend time considering the
typical store could save $29,500 a year. most appropriate bagging strategies
• Some stores have a re-use policy on for your store.
bags. A typical store gets 10 per cent of
its bags back, especially if they offer a 2
cent refund policy. When you consider
a bag may cost 4.4 cents, this is a
sensible strategy.
2 Be environmentally
aware; customers are.
Consumers are becoming more
• Some companies do ‘double bagging’, environmentally aware and expect
i.e. put one bag inside another to give
you as the retailer to share their
strength. This is a costly exercise and
the use of a stronger bag may prove to concerns about the environment. On
be more economical. Prince Edward Island in Canada, for
• According to the US Competitive Edge example, retailers are no longer
Report (January 1997): allowed to sell drinks in plastic
• 80 per cent of consumers re-use their containers; they have to be glass.
grocery bags at home as rubbish Review how you can become more
liners. environmentally aware and consider:

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55
Management Memo
• degradable bags rather than non-
degradable bags.
• Tesco’s Supermarket in the United T reating the customer's purchase with
care, offering positive reinforcement and
individual farewell is all part of a positive wrap
Kingdom supply customers with a
‘bag for life’ which the customer up. 26
brings back on return visits.
• Car boot liners may be more
appropriate than individual bags. • a paper bag
• Safeway Supermarkets in the United
• a plastic bag
Kingdom supply customers with
plastic trays rather than plastic bags. • an environmentally friendly ‘bag
These trays are kept by the customer for life’
and are used to take food from the • a plastic box, purchased by the
store to the car and from the car to the
pantry.
customer for loading and placing
directly into cars
• a cardboard box.
Become socially aware.
3 Develop a bag-filling
Society is becoming more educated
and more demanding. This is
5 technique.
Bag filling is an art, and in mastering
especially true when it comes to
the task, the following techniques
excess packaging of products.
should be adopted:
Always be one step ahead of your
customers. Select a system that is • Open the bag and build a
socially acceptable for your customer foundation.
base. This varies around the world. • Use large solid products to build a
For example, in Indonesia a person foundation to the bag.
who is easy to barter with has • Always split weights. Your aim
products packed in a white bag, a should be to make each bag the
reasonable barter has goods equivalent weight. Equal weight
presented to them in a black and bags are easier for the customer to
white bag, while a tough barter handle.
results in products being presented • Fill the bag correctly by building
to the customer in a black bag. This the wall of the bag first and then
assists other retailers to know in fill the centre.
advance what a consumer's buying • Second wrap wet items.
skills are.
• Keep frozen products together.
Ensure your staff • Put ‘squashy’ products on the top.
4 consider the filling task. • Never put odour products and
poisons with food products.
Prior to packing any bag, have your
team members get into the habit of • Place breakables in the central
thinking about what they are going funnel of the bag.
to do, before they do it. In this way, • Keep soap, cheese and other
they can select the most economical smelling products away from
carrier for the job in hand. Several butter, eggs and meat.
options may be considered: • Place the receipt in the bag.
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56
FAREWELLING CUSTOMERS See also: 24, 52, 54

How to farewell the customer

First and last impressions are so important in retailing. When


a customer enters your store, you should be an effective
host. When the customer leaves the store, the same advice
is true if you want that person to return…

Remember your Adopt a four-point plan.


1 objective…
Your primary aim in farewelling
3
To ensure your store farewells are
customers is to get them to return to sincere, have your staff adopt the
your business but, more specifically, following four-point plan:
your aim should be to get them to • Always thank the customer.
return to you. Every person should be thanked for
Often you may be the last person doing business with you. This should
the customer will see in the store. take the form of a heart-felt ‘thank-
Alternatively, you may be passing you for shopping with us’.
them on to a checkout operator.
• Be positive in your body language.
Whichever applies in your retail
Customers enjoy being served by
situation, you should ensure that
self-assured, happy people. Body
your store has a policy in place
language does much to reflect this.
where a staff member is responsible
Smile, at least. If your body language
for farewelling each customer.
shows you couldn’t care less, or want
to rush them through the checkout,
Be genuine.
2
Your parting words must be seen to
then this will be noted by the
customers as they leave the store.
be part of a genuine farewell. Many • Make a parting aside to the customer.
customers become cynical when Always include a personal comment
your team is programmed to recite, to customers as they leave to help
parrot-fashion, to every parting foster a one-to-one relationship. Such
customer, ‘Have a nice day’. comments could relate to:
Unless your staff genuinely want • what they have just purchased
to build a relationship with • what they are wearing
• what they plan to do over the coming
customers, they will sound insincere weekend
and they could be doing more • the weather
damage than if they had remained • their hobby
silent. • their pets, family etc.

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YOUR STORE YOUR PRODUCTS 57
Vol. 1: See 116, 196, 248, 388, 390
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○

• Invite them back. Management Memo


Invite them back to the business, by
using words like, ‘I look forward to Who are our customers?
seeing you on your next visit’ or ‘I’ll Customers…
see you next time’. This is far more are the most important people ever to enter
personal than ‘we’, and will stay in our store.
their memory longer. Customers…
are not dependent on us; we are dependent
Promote forthcoming on them.
4 events and specials.
If you can start a parting
Customers…
are not interruptions to our work; they are the
purpose of it. We are not doing them a favour
conversation with the customer, it by serving them; they are doing us a favour
also provides you with the by giving us the opportunity of doing so.
opportunity to remind them of Customers…
upcoming specials and events— are not outsiders to our business; they are
without giving the impression that part of it.
you are selling. Customers…
are not cold statistics; they are flesh-and-
Use the customer’s blood human beings, with feelings and emo-
5 name.
If you can obtain a customer’s name,
tions like our own, and with biases and preju-
dices.
use it. People like their names being Customers…
are people who bring us their wants and
asked for—and used. If a name is
needs. It is our job to satisfy those needs, to
offered, you should use it in the both their advantage and ours.
27

closing conversation. Of course,


names can also be obtained from
cheques and credit cards. If you can
offered a car loading or delivery
pronounce the name with
service, but this is not always cost
confidence, use it; on the other hand,
effective or practical. However, it
if it’s a difficult pronunciation, don’t.
may be possible, even desirable, if
You may embarrass yourself and the
you tried to offer this extra service to:
customer.
• disabled customers
Be aware of customer • pregnant shoppers
6 needs.
Be astute when closing a sales
• parents with prams or strollers
• elderly shoppers
encounter because, by observing the • general customers in inclement
needs of the customer, you can weather.
extend your service and their Treat everyone as an individual and
gratitude to the store. For example, as a special person, and you will
in an ideal world, it would be build up an abundance of lifetime
excellent if every customer was shoppers.

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Just about Everything a Retail Manager Needs to Know


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WINNING OVER PROMOTING MANAGING INDEX
YOUR STORE YOUR PRODUCTS
YOUR CUSTOMERS YOUYR BUSINESS 59

Promoting
your Products
Don't sell me clothes. Sell me neat
appearance, style, attractiveness.
Don't sell me books. Sell me pleasant
hours and the profits of knowledge.
Don't sell me tyres. Sell me freedom
from worry and low-cost-per-mile.
Don't sell me things.
Sell me ideals… feelings…
self-respect… home life… happiness.
Sears Roebuck & Co.

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60
ADVERTISING See also: 62, 64, 66, 68, 186

How to select the right media


for advertising

When business is good, it pays to advertise. When business is bad,


you’ve got to advertise. Advertising is the mouthpiece of business.
It is essential. Retailers are offered a multitude of avenues to
promote their products and the biggest challenge is deciding
how to best invest your advertising dollar to get the maximum
return. Advertising your business and products does not have to
be haphazard. You can plan, measure and monitor your
advertising activities…

Consider your audience. A dviser The person who influences


1
If you do not know your target
D ecider
the decision
The real authority on what
to buy
audience, and you blanket advertise, E nd user The consumer of the
you will be wasting your advertising product.
budget. Everyone’s target market This may be one person or five
will be different, which is why you different people. At each stage they
need to consider, firstly, such general are looking for different benefits.
variables as: Your final advertising thrust should
• the geographic location of your reflect this customer analysis by
store and your audience—passers- promoting to the selected target
by, workers, or residents audience the benefits of your product.
• the age group you wish to attract
Select the appropriate
• the gender you are targeting
• the primary socio-economic group
3 advertising media.
Once you have decided on your real
you are hoping to draw upon
target audiences, you can then
• the occupations of your audience. decide on the appropriate
advertising media you should use to
Target your specific get their attention. Among the media
2 audience. available to you are:
Having reflected upon your general National newspapers—Expensive, but ideal
advertising framework, you should for nationwide retail chains.
then become more focused on the Regional newspapers—Have immediate
impact but remember, yesterday’s
individual customer. Marketers often
newspaper is old news.
use the term SPADE to focus retailers Local newspapers—Have excellent
on their real target audience: household penetration and can be
S tarter The person who initiates very cost effective.
the enquiry Trade magazines—Well read and very
P urchaser The person who pays for targeted.
the goods Local directories—Very effective, but you

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MANAGING
WINNING OVER PROMOTING MANAGING INDEX
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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
must plan well in advance. ○ ○ ○ ○ ○ ○
Radio—Local radio and community radio
are becoming more and more popular. Management Memo
This is a useful medium to consider.
Posters—Often linked to major
advertising campaigns.
I f you advertise in newspapers, less than
2 per cent of the readership may be inter-
ested in your product. Therefore, newspape
Street benches—Useful in high traffic r
advertising must provide impact if it is going
areas. The message should be rotated to be cost effective. 28
every few months.
Public transport advertising—Moving
messages on buses, trains and taxis
must be simple, bold and short. Get
them right and they work. monitors such standards.
Television—Regional television is very Regulations on advertising vary
cost effective. Only large retailers can from country to country, but the
afford metropolitan television. Ask following guidelines should always
your local television station; their
advice is valuable. be adhered to:
Sponsorship—Always sponsor local • Advertisements should be legal,
events attended by your target decent and truthful.
audience. It gives credibility to you as
a neighbourhood retailer and one of • Advertisements should be
the ‘local good guys’. prepared with a sense of
Parking meters—These work in the United responsibility to the consumer and
Kingdom: over 35,000 meters are used society.
by 5.5 million motorists a week.
• Advertisements should conform to
Point of sale display—Remember, internal
advertising is always more cost the principles of fair competition.
effective than external advertising.
You know you will hit your target. Monitor the penetration
And the list goes on. 6 cost of advertising.
It’s important to look beyond the cost

4 Do your homework. of the advertisement. Look at its


penetration rate. It's not an easy
Before deciding on which medium assignment but—how many of your
best suits your business, do your target audience did it reach? Begin
research. Contact as many with your team. Advise them of
advertising outlets that suit your what advertisements you have taken
target audience as possible. Ask for out and have them monitor if a new
details on costs and evidence as to customer has come in as a result of
how effective they are at reaching your advertising campaign. In this
your target. Always keep notes of way, you can determine how much it
discussions so you can refer back to costs to get a new customer. In many
them at a later date. cases, a new customer has to return
to your store three times before you
Keep to the advertising
5 standards.
Most countries have advertising
make a profit from them. Your staff
need to know this and commit
themselves also to your advertising
standards and an authority that initiative.

Just about Everything a Retail Manager Needs to Know


FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS
62
DIRECT MAILING See also: 60, 64, 66, 68, 70, 186

How use a direct mailer


to promote product sales

Customer newsletters are communication tools; direct mailers are


selling tools. Both are separate retailing vehicles, serving different
roles. A good newsletter has the potential to stay in a household for
weeks. On the other hand, in the majority of cases, a direct mailer
has a short life—often being despatched to the bin within 7.5
seconds of the customer taking it out of the mail box. For this reason,
direct mailers must get directly to the point with a clear, immediate
message to the potential customer…

Sell, sell, sell upfront. Focus on gaining the


1
With a direct mailer, your aim
3 customer's attention.
Direct mailers should be no larger
upfront is to sell. You need to sell than your store newsletter. Since
your name, the products you want to customers do not have the time or
promote, and the benefits of these the inclination to read, your message
products to your customers. Due to must come across quickly, visually,
the limited amount of time the clearly, and dramatically.
consumer gives you to get your
message across, it is common to Plan a targeted
feature price fairly heavily and
dramatically. Colour is often used to
4 distribution for
create impact and the primary
greater success.
colours of red, blue and yellow are Mass mailers are often dropped in
often splashed across the front page. letter boxes in bulk. Focused direct
mail, however, allows you to target
more specifically so that you can
Use coupons to
2 encourage a sale.
achieve a higher success rate. Ideally,
your aim is to get a specific person to
You need an instant reaction from open this specific mailer. Of course,
direct mailers. Through its appeal, your chances will increase
you want customers to visit your substantially if you use a coloured
store or to return a purchase order envelope, a real stamp, and you
via a coupon in the mailout. handwrite the envelope. Usually, the
One useful motivator is to include
extra effort is well rewarded.
a coupon with the mailer, offering
the customer a special deal if it is
Consider a follow-up
used in association with the store
purchase. If used effectively, the
reader will in time get into the habit
5 strategy.
Depending on your type of retail
of looking for coupons in your organisation, you may wish to have a
mailers. policy of following up the mailout

Just about Everything a Retail Manager Needs to Know


MANAGING
WINNING OVER PROMOTING MANAGING INDEX
YOUR STORE YOUR PRODUCTS
YOUR CUSTOMERS YOUYR BUSINESS 63
Vol. 1: See 392, 406
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with a telephone call. If you are mass
mailing, this would be inappropriate Management Memo
and not cost effective. However, if
you are directing the mailout to a
specific customer group, then a
I n Australia, the typical promotional budget
is split as follows: 29

follow-up telephone call would be Advertising 35 %


Personal Selling 30 %
desirable and increase the
Promotional Marketing 15 %
effectiveness of your direct mail Direct Mailing 10 %
initiative. Other 10 %

Make the mailer


6 work for you.
According to Results Corp in
than products alone.
• Photographs beat line drawings
Queensland, Australia, you will get by 50 per cent.
greater value from your direct • Simple advertisements are 30 per
mailers if you reflect and act upon cent more effective than
these research findings: complicated ones.
• The emotional appeal of products • Photographs with the product
generates 45 per cent more close up and the person in the
enquiries than a technical appeal. background are ten times more
• Pre-paid postage coupons produce effective than those in reverse.
47 per cent more enquiries than • Coupons are 12 per cent more
non pre-paid cards. effective on the outside column
• Illustrations showing products in than the inside column of your
use are 30 per cent more effective mailout.

Just about Everything a Retail Manager Needs to Know


FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS
64
'HOW-TO' LEAFLETS See also: 7, 186

How to use 'how-to' leaflets


to sell more product

Customers are a diverse lot—from various age groups, social


backgrounds, and a wide range of experience. There are those
who are time-poor and relatively affluent—the ‘do-it-for-me’ group
of customers, and those in the ‘do-it-yourself’ category. Help
guides or how-to leaflets are aimed at the novice user and the do-
it-yourself market. In providing this helpful literature you educate
the customer in the hope that they become advocates of your
business—and spend more money in your store…

Keep the leaflets Talk the language


1 simple.
Always design how-to leaflets with
2 of your customer.
Use words like you and yours when
your target market in mind. These writing for the customer. Do not use
people often do not have technical language such as I and we when
knowledge, which is why they need related to you as the retailer, for it
the leaflet. So, keep it simple, keep it sounds like you are dictating to your
attractive, and avoid technical jargon customer rather than holding a
related to your industry. conversation with them.
Although pictures are easier to
understand than words, text will also Ask the questions
be necessary to get your message
across. Use short sentences and
3 customers would ask.
Your leaflets should highlight the
bullet points or short numbered common questions customers would
statements rather than lengthy ask. For example:
paragraphs of text. For example, a Where do I start?
garden centre leaflet on the topic Which _______ should I select?
Which containers should I buy for my Which _______ do I buy to get success?
patio?… How do I put it together?
When choosing your container… How do I look after _______?
■ Consider the area of patio and the
Provide extra information
architecture of the site. If it is a
natural look you are after, select
stone or terracotta pots. If it is a
4 in separate boxes.
The basic text is what the customer
modern environment, select plastic
or fibreglass containers. needs to know to be successful.
■ Consider the size of plants you want.
Decide what additional helpful bits
Select pots that are large enough for of information the customer should
those plants. also know, and then highlight these
■ …and so on. items in separate boxes. These
should-also-knows could include:

Just about Everything a Retail Manager Needs to Know


MANAGING
WINNING OVER PROMOTING MANAGING INDEX
YOUR STORE YOUR PRODUCTS
YOUR CUSTOMERS YOUYR BUSINESS 65
Vol. 1: See 64, 406

○ ○ ○ ○ ○ ○ ○ ○ ○ ○
• Time saving tips ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
• Fun ideas
• Did you know...? Management Memo
arresting
dvertising is the science of

5 Include a shopping list


in the flyer.
A the human intelligence lon
get money from it.
30
g eno ugh to

Remember your objective: to increase


the average sale per customer. The
leaflet gives you the opportunity to
cross merchandise, add-on sell, and
provide a complete package— identify your leaflet, as well as clarify
including products purchasable from certain illustrative points. Try using
your store—to do the job a different colour for each leaflet.
successfully. These additional Make the cover of each leaflet very
products could be purchased now, in simple, yet very distinctive. And of
the future, or in stages. Therefore, course, ensure your logo and/or
your leaflet could include such lists as: store identification is clearly
• Tools you will need to do the job.
recognisable to the customer.
• A shopping list to be successful.
• Items you will need to maintain value. Position your leaflets

Pay attention
8 in the store.
6 to legibility.
Ensure that people can easily read
Don’t place your leaflets on the
counter where they will soon become
untidy. Leaflets need stands, and
your leaflet. The most easily read these are best positioned near the
typefaces are serif-based, i.e. letters counter where your team can use the
with small feet (or serifs) such as this leaflets as an ‘added-value’ tool. An
typeface, while sanserif typefaces alternative is to place the leaflets next
(those without serifs), such as the to specific products. So, you’d place
heading above, are best used for a cheese recipe leaflet next to the
headings and signage. Research by cheeses; and a garden container
the Newspaper Advertising Bureau leaflet next to the containers.
of Australia supports this.
Train your staff

Layout with Serif Body


Comprehension Level
Good Fair
67% 19%
Poor
14%
9 in their use.
Make sure all your team have read
Type the leaflets, for the story they tell to
Layout with Sanserif 12% 23% 65%
Body Type the customer must correspond with
that outlined in the leaflet. If not,
The words were the same; the only you'll end up confusing your
difference was the typeface. customer with the result that store
credibility will be lost. As well,
Bring colour
7 into your leaflet.
ensure your staff are briefed on the
most effective way of using the
Colour will help the customer material as a value-added benefit.

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FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS
66
ADVERTISING See also: 60, 68, 186

How to plan an advertisement

Your customer population is confronted by thousands of


advertisements every day of their lives. Your aim is to make yours the
one that is noticed—and that’s not an easy task. However, by
following some simple guidelines you can take some important steps
to give your advertisement a chance in the highly competitive retail
world. Your aim must be to reveal the message you hope to get
across to your target audience in a simple, logical, and effective
way.

Plan an effective layout. eagerness to possess the product.


1
A good layout embraces four
Conviction—the reader makes a decision
to purchase.
Action—the reader actually takes steps to
essential factors: purchase.
• Sequence
• Focus Focus your readers’
• Simplicity
• Eye appeal.
3 attention.
Ask yourself—what is the most
Begin with these key components in important part of my message? It is
mind and, on completion of the this that you want your audience to
advertisement, check that your concentrate upon, and there are a
layout reflects this essential number of techniques you can use to
formula… accomplish this. For example:
Highlight the message.
Get your sequence
2 correct.
Change the typeface.
Use colour.
Use a pointed finger.
To make sense in life, it is important
Use arrows.
to get things in logical order, in
sequence. In advertising, sequence is
Keep it simple.
also important, and the acronym
AIDCA can help us in this regard.
4
The KISS principle (Keeping It
When preparing your advertisement,
try to make your advertising content Simple, Sells) applies to many
capable of creating AIDCA in your aspects of the retail business, and
readers when they follow this simple eye-catching advertisements
sequence— are always your best approach. The
Attention—your advertisement grabs only catch is that, a simple
readers’ attention immediately. advertisement isn’t always as easy to
Interest—if you don’t get the readers achieve as you would hope. Indeed,
interested, you’ve lost them. you may need to compile your
Desire—your advertisement must be
capable of arousing the readers’ advertisement a number of times to

Just about Everything a Retail Manager Needs to Know


MANAGING
WINNING OVER PROMOTING MANAGING INDEX
YOUR STORE YOUR PRODUCTS
YOUR CUSTOMERS YOUYR BUSINESS
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67
Vol. 1: See 64, 392, 406
Management Memo
accomplish that desired simplicity.
Remember also that space sells, and
a cluttered advertisement is often A

im your advertising appeal at the basic
human needs:
making money
overlooked by the reader.
• saving effort
• impressing others
Give your advertisement • more leisure
5 eye appeal.
To attract and hold the attention of


self improvement
the need to belong
• security
your target audience, your • getting something others can't. 31
advertisement will need five
components:
An eye-catching headline and sub- to product details, this may include a
headlines map, telephone, fax, email, and web page
Copy or text details, car park facilities, years
Illustrations established…
White space
Your name, address and logo. ■ Westerners read from left to right and
absorb information quickly in a Z
Since our minds work in pictures, not pattern:
words, pictures will help get your
message across. We also prefer to
read in lower case, not capitals, and
we prefer the serif typeface, as used
in newspapers. A printer can advise
you on the best typefaces to use. The major products you wish to promote
Finally, make sure the advertisement must be in the path of the Z. The less
is in keeping with the image you are important products are set off to the side.
trying to develop for your business. ■ Place your name and address at the
bottom of the advertisement—your
objective is not to sell your name. The
Adhere to these
6 proven rules…
Most newspapers and magazines
headline should be selling a product,
service or idea.
■ Remember: a picture speaks a
have studios that concentrate on thousand words. Use illustrations and
creating advertisements. If you lack pictures to catch your reader's eye:
confidence in this area, use their
available expertise. At the same time
it is worth knowing a few simple
rules so that you can draw up your
own advertisements if required…
■ Decide on your approach—on a ‘hard’
sell or ‘soft’ sell. Hard sell is price-
dominated, soft sell is benefits- Use copyright-free clip art that is
dominated. The decision will depend on available in computer software packages
your image, target audience, time of year, or clip art books. Newspapers often
and product. subscribe to artwork services, and
■ Compile a checklist of what you’d like manufacturers and suppliers often have
to say in your advertisement. In addition illustrations that you can use.

Just about Everything a Retail Manager Needs to Know


FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS
68
ADVERTISING COPY See also: 62, 66, 70, 186

How to write advertising copy


that sells

Writing advertising and promotional copy is a skill. If it weren’t, we’d


be reading every advertisement we see. Good copy answers six
important questions that a potential customer is going to ask: Who
are you? What are you trying to sell me? Why should I buy it? Why
should I come to your store? Where are you located? When are you
open for trade? You have to get this information across in such a way
that the potential consumer will want to read your advertisement—
then buy. The following advice will help you do that…

Identify your USP. Be creative, competitive


1
Every successful business has a
3 and located.
Writing style is critical. You need to
USP—a Unique Selling Proposition. create a desire in customers to buy
You must identify your USP and be products at your store. You may
able to explain it to your target need to write competitively—if your
audience in a way that captures their audience already has the desire to
attention and, hopefully, has them purchase, your job is to channel that
beating a path to your door. desire into your particular location
over any competitors’. And you may
List your selling points need to tell your hard-won
2 and benefits.
Selling points are inherent factors
consumers where you are—let them
know how to find your store.
about your business and your
products. Can you identify yours? Make your copy sell.
They’ll need to be mentioned in your
copy. Selling points could include:
4
Keep the AIDCA formula in mind
• Biggest range in the city when preparing your copy:
• Large car park
• Massive sale this weekend Attention must be gained with such
• Thousands of items under the one roof words and phrases as: You, Did you
• Been in business 75 years. realise, You see, More interesting
The benefits are what the consumer still, Now, New, Your…
is looking for when purchasing Interest must be generated. Put a
products from you. For example: smile on their face. Tell them facts
• Immediate home delivery they do not know.
• Reliability and trust
• Save money. Desire must be created. Put yourself
Consumers always buy benefits over in the customers’ shoes, raise their
selling points and you must doubts and then answer them.
highlight these in your copy. Convince them that the purchase is in

Just about Everything a Retail Manager Needs to Know


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WINNING OVER PROMOTING MANAGING INDEX
YOUR STORE YOUR PRODUCTS
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69
Vol. 1: See 64, 406
Management Memo
their best interests.
Action must be stimulated. Your job
is to ask them for their business. Tell
W hen you have written advertising
copy, read it through and count how
many times you have written I, I'm and we,
them what you want them to do. For and how many times you have written you
example: and your. You should have used the you and
• Pick the telephone up and speak to… your at least three times more than I, I'm and
• Fill in the coupon and mail to… we. Your aim is to communicate with another
• Visit the shop and ask for… person about them and their interests, not tell
• Fax your response to… them about yourself. 32
• Order now from our website at…
Many retailers will write excellent
copy and then neglect to include a
procedure for getting an order. You
6 Use a PS to drive
the message home.
must remember: your aim is to sell Most people will read headlines,
something! scan the text and focus on the end.
Research has shown that postscripts
enjoy a readership as much as seven
5 Write a headline people
want to read. times higher than ‘body’ copy. So, to
boost the power of your message, to
The most important part of the copy
is the headline. It must attract and reinforce your major point, consider
hold the readers’ attention. using a P.S. to sell product, stress
Headlines that work usually promise benefits, or call the reader to action.
benefits to the reader, and therefore
Remember these basic
encourage them to read on. Your
USP may be the focus of your 7 guidelines to better
headline. copywriting…
For a headline to really grab the Successful copywriters adhere to
readers’ attention, it should: certain basic rules, included among
• Mention the reader and their them being the following…
interests. • Use simple and clear English.
• Use current news if it is relevant to • Do not use long words or jargon.
your message. • Use local language.
• Be credible and avoid half-truths.
• Provoke curiosity. • Always use facts and figures.
• Promise the benefits upfront. • Do not promote technology early on
• If it is a product you are in your copy.
• Tell it the way it is.
promoting, say what it does or
• Do not use too many adjectives.
how easy it is to use. Remember,
• Do not try to be too clever.
price is not a benefit when
• When you have written it, get
consumers are making initial someone else to read it and check it. It
decisions. must sell—and be error-free.

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FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS
70
PROMOTING ADVERTISED LINES See also: 108, 136, 140, 154

How to promote advertised lines

It takes planning and organisation to promote advertised specials.


To be effective and to maximise your financial investment in the
promotion, your external campaign must link in with the internal
store promotion to drive home the message to consumers as
strongly as possible. Consider the following points in preparing for
your next sales promotion…

Plan well ahead • Place all advertised lines at the


1 of the event. front door, so it is obvious you are
promoting in-store the items you
The purpose of promoting
advertised lines is simple—to sell are promoting externally.
more items of that line than if you • Place advertised lines together at
were not advertising. This means the back of the store or towards
your store buyer must anticipate the the exit to encourage shoppers to
extra demand and buy sufficient walk the whole shop.
stock accordingly. And this must be • Scatter the advertised lines
planned well ahead. There is nothing throughout the store to encourage
more embarrassing for a retailer than the customers to shop beyond the
to have an advertisement working in advertised products. The result
the marketplace, only to find that should be an increase in the
product is unavailable when the
average sale per customer.
customer comes into the store.

Determine where to Ticket the advertised


2 place the products. 3 lines dramatically.
The aim of using advertised lines is Clear ticketing of advertised lines is
to attract consumers to your store, essential. Tickets should be placed
not to your competitors’ premises. early on the day of the external
Do you want them to purchase only advertising and be removed at the
advertised items once they have close of the last day of the
arrived at your store? Or is the promotion.
intention to attract the customer to Tickets must look ‘fresh’. Ripped,
shop more widely in your store? Such old and faded tickets distract from
questions will determine placement what you are trying to achieve—a
of the advertised products in the shop. special for NOW!
There are three locations to The ticket should indicate that
consider when deciding where to this is an advertised line, using
place the advertised lines: appropriate wording:

Just about Everything a Retail Manager Needs to Know


MANAGING
WINNING OVER PROMOTING MANAGING INDEX
YOUR STORE YOUR PRODUCTS
YOUR CUSTOMERS YOUYR BUSINESS 71
Vol. 1: See 392, 406
○ ○ ○ ○ ○ ○
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
‘As Advertised’, ’This week’s
special!’, ’Catalogue Special’,
’Special! Now!’, ‘Was $7.95—Now Management Memo
$4.95!’, ‘This week’s price is…’. nexpensive 'Take One' 200mm x 100mm

Increase the facing of


I printed leaflets can be printed at little cost.
Yet with thought, they can be a powe
rful
4 advertised lines. selling tool! Use for
special offers etc.
33
recip es, new prod ucts,

Advertised lines must look as if you


have pre-purchased in bulk to
provide your customer with this
special deal. Therefore, the facing of and may be used in conjunction with
the product on the shelf should be standard marking pens or the
increased to make it look like a commercial brand POS-PEN ticket
volume special. You may also need writing system. Sizes suit ticket
to move the product from a lower or frame systems.
higher shelf so that it is now Reuseable Price Tickets feature bright
positioned in the sightline of the designs on laminated stock to make
average-height consumer. them reusable and in a size to suit
ticket frame systems. They can
Use the right
5 ticket system.
accommodate either dry erase pens,
or permanent markers with ink
Promotional tickets are available in removers.
several formats. For example:
Stick-A-Tickets are shelftalkers which
Keep your staff informed.
have sticky tape on the top edge.
This pre-taping of sheets of tickets
6
All your sales team should be aware
saves valuable time and money
of what advertised lines are going to
when ticketing the displays. Simply
be promoted, when the promotion is
tear off a Stick-A-Ticket and apply it
scheduled to start and finish, and
to any surface. They leave no residue
where the products will be located in
when removed and are available in a
the store. Customers quickly get
range of bright, colorful designs,
frustrated if they have made a
which immediately grab the
special trip to your store only to find
attention of customers in any store.
that your team members are
They can also create impulse buying
unaware or unsure of the products or
of specials, new products,
even of the event taking place.
reductions, or simply sell more of
And, of course, the advertising
those slow lines.
department must keep the
Non-Reusable Price Tickets are priced merchandising department in the
tickets printed on high quality card picture at all times—and vice versa.

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FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS
72
PROMOTIONS See also: 62

How to conduct
a general product promotion

A lot of money and effort is spent by manufacturers and


retailers to promote products in stores with the aim of creating
interest in that product, product category, or store—and, of
course, increasing sales revenue. But for such promotions to be
successful, considerable thought and planning should precede
the promotional activity, as the following guidelines suggest…

Know what a promotion Provide extra value.


1 involves. 3
To tempt the customer, you must
A promotion has three key elements:
• Extra value to tempt the consumer, which offer additional value. To achieve
may be a financial temptation (e.g. this, you need to match their buying
$2.00 off, or two for the price of one, or motive with the promotional product.
cashback offer) or an offer on their According to US retail consultant Ed
next purchase.
Mayer, there are many reasons why
• Media promotion to inform the general people buy and you need to match as
public that the promotion exists.
many of these as possible with your
• Internal store display material that
directs the consumer to the product
product:
once they are in the store. ■ To make money ■ To increase enjoyment
■ To save money ■ To gratify curiosity
■ To save time ■ To protect family
Understand why
2 customers purchase


To avoid effort
To gain confidence


To be in style
To have or hold
beautiful possessions
promotional lines. ■ To achieve greater
cleanliness ■ To satisfy appetite
Prior to promoting, you need to
■ To attain fuller health ■ To emulate others
reflect upon the NEADS of your ■ To escape physical ■ To avoid trouble
existing customers: pain ■ To avoid criticism
N What product are they buying NOW? ■ To gain praise ■ To be individual
E What do they ENJOY about the ■ To be popular ■ To protect reputation
products they are buying now? ■ To attract the opposite ■ To take advantage of
sex opportunities
A Why would they ALTER their buying ■ To conserve ■ To make work easier.
habits to purchase the promotional possessions
line?
D Who is the real DECISION MAKER
Display products
when it comes to purchasing the
product? 4 to their best advantage.
S Analyse all their needs and wants— Customers must be directed to
and make the promotion their promotional products once they are
SOLUTION. in the store and therefore the

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position of these products is critical. Management Memo


romotional products must generate high
For high customer exposure, place
products:
• near entrances and exits
P sales. If they do not do this their value as
a promotional item is very questionable. To
• at the top and bottom of escalators in maximise sales, keep the display topped up
multilevel stores with product. 34
• at the ends of runs of shelves or
fixtures
• in front of checkouts. around to get the best price. Promotions
aimed at this group have to be based on
Place internal display price—but only if the consumer is a
5 signs near the product.
heavy user of the product; otherwise you
could lose valuable gross profit.
Promotional signage should be Non users are rarely purchasers, due to
placed next to the product, be price constraints, lack of understanding of
relevant to the product, and remain value, or lack of need. You will need to
there only for the life of the product. make a decision if it’s worth the effort
targeting this sector of your market.
It is not uncommon for retailers to
remove a promotional line and leave
Select a promotion to
the promotional signage. The result
of this is a confused customer who
7 match the customer.
cannot associate product and sign. If you are now aware of your
customer groupings, you are now in
Promote products to a position to select the appropriate
6 targeted customers. promotional tool to attract the
various sectors. In Sales Promotion
Customers can be divided into five
Essentials, Don Schultz and partners
groups with different shopping
advocate use of the following:
habits and needs, and requiring
Current loyals. Coupons, special packs,
different incentives to buy products. sweepstakes, premiums, and trade deals
Loyals always buy specific product and Competitive loyals. Sampling, contests
always from you. Your aim is to reinforce Switchers. Coupons, special packs,
existing habits, not change them. This contests, premiums
can be achieved by having promotions Price Buyers. Coupons, refunds, trade
that increase the use of the product or by deals.
cross selling. For example, if they always
use a specific growing medium when
Know when to promote
potting plants, you may recommend a
specific fertiliser to go with that product. 8 in a product’s life.
Competitive loyals are loyal to your store, When promoting products always
but not loyal to a specific product in a consider the product life cycle. The
category. This may be due to habit, cycle varies depending on whether it
snobbery, or value. Promotions based on is a fad or a basic line. Promotions
value work very well with this group.
are best undertaken during the
Switchers switch stores and brands to
provide variety in their lives. If you can
market growth phase of a particular
create interesting promotions these product or product line. The ideal
people could well become loyal to your promotional phase is when you are
business. seeing rapid growth in the sale of the
Price buyers always buy on price and shop product.

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DEMONSTRATIONS See also: 8, 10, 64, 162

How to use demonstrations


to sell product

Customers like to feel, taste, smell, touch, and generally get


involved with products. The more interactive you can make their
shopping experience, the more inclined they are to buy. One cost
effective method of introducing interactive retailing is through the
use of demonstrations. These presentations usually relate to such
activities as food sampling, tastings, cooking, gardening, and
home décor, and must include a ‘doing’ element…

Plan your demonstrations. they are talking about. This means,


1
If you want to send a message to
for example, that, if it is a food
demonstration, then the instructor
your customers that you are an needs to be knowledgeable not only
interactive store with a vigorous about the product itself, but
approach to retailing, then conscious also of food hygiene
demonstrations are an effective regulations and wear the
strategy to embrace—but your recommended gloves and headwear.
demonstrations must be worthwhile
and regularly scheduled. For Position your
example, if you start organising
demonstrations for Saturday
3 demonstration
to make sales.
mornings, you must keep doing In the food industry, research tells us
them every Saturday, or run the risk that 70 per cent of customers will
of disappointing, even losing, your sample food provided by a
customers. demonstrator. The technique is
For this reason, demonstrations highly effective. And, if you position
should not be undertaken lightly. the demonstration strategically, 30
They must be planned well ahead to per cent of those who have tasted
make sure you attract the people and will purchase.
the products for demonstrations, and Clearly the demonstration can be
to ensure you have sufficient product a major selling tool. It should be
in stock to sell during the event. positioned in a wide aisle where
people can stop and watch and talk
Train your demonstrators.
2
Select demonstrators who are
without the feeling they are being
hassled by other shoppers who are
trying to pass them.
presentable, and have personality, Demonstrations are best located
communication skills and a flair for at least one-third of the way into the
this type of work. They must be customers’ shopping experience.
trained in all aspects of the product This gives them sufficient time to

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become comfortable and relaxed in
your store. Management Memo

4 Position the product


to make sales.
I strongly recommend that you put team
members in a workshop prior to giving
demonstrations to the public. This
will
Many demonstrators place the strengthen the appropriate skills and help
them to critically analyse their own abilities
product right next to them—and, in
this area. Get them to give a demonstration
unwisely, nowhere else. Although to
the team before you let them loose on your
some customers will purchase customers. Public speaking is one of
the
immediately while at the biggest human fears. They are far bette
r to
demonstration, others, particularly overcome their initial fears in front of frien
dly
men, usually prefer to think it over faces than in front of strangers. 35
for a few minutes without pressure
or harassment from the
demonstrator. companies. These look a lot more
So, have product at the professional than the homemade
demonstration for the immediate variety.
impulse buyer, but also have a If you are using outside
display 3 to 5 metres past the demonstrators, make sure they are
demonstrator for those customers wearing either the supplier’s
who want to reflect on the purchase. company uniform or your
Make sure this display is signed with company’s uniform. As far as your
a message like ‘As being customers are concerned, they are
demonstrated today by Mary’. part of your team and should look
like it. Remember to debrief outside
Sell the promise. demonstrators at the end of the
5
Apart from selling product, your aim
session. You may get some valuable
tips on how to improve your store.
with demonstrations should be to
cultivate your customers so that they Keep a record.
will come back to your store for
further demonstrations on
7
Keep a record of all demonstrations.
subsequent occasions. Have a Note when they were carried out, by
noticeboard in your store whom, and the consumer reaction.
highlighting the topic for next week’s Record the increase in sales of the
demonstration. If you can sell the product you were promoting, for if
promise, you may find that ‘word of your sales figures showed no
mouth’ advertising and reputation improvement, you may have used
will become major marketing tools the wrong product and/or the
for you. wrong demonstrator.
Share your results with the
Look professional. supplier of the product as this will
6
Demonstration tables are available
help both of you to build on the
success of such demonstrations in
from most retail promotional supply the future.

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76
TRADE SHOWS See also: 20, 28, 224

How to get the most out of


your booth at a trade show

Many retail operators look towards trade shows, local shows,


and craft and charity events within their catchment area as
a means of exposing their products and their message to a
broader customer base. But no matter what the product or
the message, the results will always be better after careful
planning, a little creative thinking, and adherance to the
following advice…

Select a prime location. • Place new products to catch the


1
One of the keys to a successful trade
eye.
• Dress staff in bright colours.
exhibit or demonstration is your • Introduce movement of some
location within the overall site. As kind.
early as possible, reserve a position, • Devise a competition with
preferably one of the following: appropriate prizes.
• near the entrance/exit to the trade hall
• Create mystery.
• an end display at the junction of major
aisles • Make your display sufficiently
innovative so that it stands out
• a location enroute to the toilet or
coffee bar. (Being right next to the from those around you.
coffee bar is not ideal—you’ll have
plenty of traffic, but the people will
Build a workable booth.
have other things on their minds.)
• a booth next to major national
suppliers— they will generate traffic
3
Planning is essential in designing a
for you. booth that is more than just a box.
Consider the following points:
Plan to make an impact.
2
Be daring. Do something different.
• Don’t take things for granted at
the exhibit site: check beforehand
such basics as power points,
You have to catch the attention of ceiling height, access, lighting, and
passing customers, and this can be so on.
done in a number of ways.
• Give yourself plenty of time to
Successful ideas have included:
build the display. You may be able
• Use bright colours or noise. to dismantle it in an hour, but it
• Consider give-aways, whether may take a day to construct. Build
they be sweets, a non-alcoholic the display in your store prior to
drink, balloons, or a exhibiting; it will save you critical
complimentary product. time if you strike an unforseen

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77
Vol. 1: See 24
Management Memo
problem on the day.
• Design a booth where potential
customers feel they can get
E xhibiting requires preparation not only
because it is a complex marketing activ-
ity but also because of its intensity and con-
involved, rather than just walk centration and of its propensity to expose
past. If they get involved, they are shortcomings. On the other hand, the value
more likely to spend. of effective preparation and the resulting
economic use of resources employed is en-
• Make sure your display has a clear
hanced by the value of the resulting smooth-
visual centre of attention. And is ness of the exhibition operation and the gen-
your message clear to an outsider? eral good impression created. 36
• Accuracy is absolutely essential
when it comes to spelling and
inquirers. The forms should seek
grammar on posters, banners, and
such information as:
literature. • Contact’s name, address, telephone,
• The biggest frustration can be fax
getting to and from your location • Contact’s position in the company
site, particularly at larger shows • Products they are interested in
• What they find appealing about the
where you will normally be product
allocated a parking site, unloading • Who makes the buying decision in
facilities, and times. Be aware of their company or household
these limitations and allow • Date or details on agreed follow up
accordingly for the inconvenience. • When they would like to buy.
• Make sure you have more than
Know why follow-up
ample literature. There is nothing
more embarrassing than running
5 is so important.
Gathering information about
out of your sales material half way
through the first day. Trade potential customers is important but
venues make a lot of money irrelevant if those leads are not
photocopying catalogues for followed up. According to the
desperate exhibitors. Australian Trade Show Bureau,
surveys of those attending trade
shows have revealed that:
Either sell—or build up
4 a list of contacts.
It is foolhardy to staff your booth
• 60-70 per cent of attendees expect to
make a purchase of an exhibition
product within two months of the
with untrained or unsuitable trade show.
personnel. It is hard work being a • 60 per cent of all attendees do make a
purchase within twelve months of the
sales representative or demonstrator
show.
on a sales booth, but the result for an • But 83 per cent of trade show contacts
enthusiastic and well prepared are never followed up by a
person can be most rewarding. representative from the company
Make sure your display or within the next 12 months.
demonstration booth has ample When it comes to making sales, the
supplies of Show Inquiry Forms message is clear for those staffing
where your staff can record vital your booth—follow up the contacts
information about customers and made at the show.

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78
SIGNS See also: 154, 156, 158

How to produce signs


that sell products

For retailers, signage is a key focus area that can increase


customer awareness of your business and highlight the
products that you sell. Signs can be used outside or inside
your business as valuable promotional tools. To use signs
effectively, consider the following guidelines…

Understand the essentials Speed Limit Sign distance


1 of outdoor signage.
50 kph
from turning
500m
To be effective, outdoor signage 65 kph 675m
must take account of the following 80 kph 750m
elements: Once the sign site has been agreed
• the speed at which viewers are upon, the appropriate size of the
passing (on foot or in vehicles) lettering needs to be determined—
• the height and width of letters used large, clear, and obvious to prevent
• the style of printing any customer confusion.
• colour combinations The UK Ministry of Transport’s
• the amount of words used recommendations for road-side signs
• the message you are trying to get provide useful guidance:
across.
Distance Letter Number
External signs need to be planned to be read height of words
from the site entrance through to the (m) (cm) at 50 kph
exit. They should project the 15 4.5 4
corporate image. 30 9 8
60 18 15
90 28 22
Provide entrance signs
2 that can be seen.
The crucial demand for entrance
120
150
35
45
30
43
Letters also need to be at least a fifth
signs is that they can be readily seen as wide as they are high.
and allow ample time for potential
customers to decide to turn into your Know why customers
parking area. Ideally, therefore,
entrance road signs need to be sited
3 need in-store signs.
Customers require in-store signs to
in advance of your site entrance. identify advertised lines, explain
The distance from the entrance hidden benefits, indicate value and
should be based on the speed of price, and highlight new trends and
passing traffic. The following table products. Signs can also explain the
should act as a guide: difference between lookalike

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79
products, remind customers to
Management Memo
purchase, clarify your policies, and esearch in the United States has re-
help customers find products. As a R vealed that, during the same sales pe-
riod, if 100 products were sold with no signage,
retailer, you need signs to encourage
‘trade ups’ to better margin products. then 170 were sold when handwritten signs
were used, and 265 products were sold when
They allow you to convince customers signs were professionally produced to sell
that they need the product and to the product. 37
encourage them to purchase in order
to increase average basket spend.
of the art, Switch to, Take a look at these
Attend to features, Take the…challenge, The…
4 in-house signage. advantage, The smart choice, Urgent.
In-house signage includes all the
Use the right sign
signs within the site, whether they be
inside or outside. Permanent outdoor
6 at the right time.
signs should be on Foamex or similar Signage should be used at key times
material, while outdoor promotional in a product’s life cycle. The
signs can be on Foamex or Corflute following diagram illustrates the life
(Correx). Corflute (corrugated plastic cycle of a typical product and shows
sheet) is adequate for seasonal the key times when you should use
outdoor promotional signs for signs to promote the product to
retailers with outdoor stock. achieve maximum sales.
Departmental signs should be
written in lower case as they are
more easily read. They should be
customer friendly. For point of
purchase signs, today’s computers,
printers, colour photocopiers, and
laminating machines allow product
signs to be made professionally by
your staff on location.

Use words that sell.


5
Certain words have positive
The product will remain the same,
but the message will be different at
various stages in its life cycle:
suggestive meanings on signage and Point in Sample words
should be used whenever possible. life cycle to use
Words that sell include: Testing NEW!
At last, Attention, Back by popular Rapid sales growth IT’S HERE!
demand, Check out these, Exclusive, Pre peak period ATTENTION
Finally, For the first time, For those who Peak period Take a look at these
insist on the best, Good news, Huge key features
savings, Hurry, In a class by itself, It’s Early decline Check out these
here, New, New low price, Only… gives High promotion Attention
you, Quality doesn’t have to cost you, period
Reasons why you should, Save big, State Clearance Huge savings

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CUT CASE DISPLAYS See also: 126, 218, 238

How to use a ‘cut case’ display

Many products, such as cans, bottles and packet items are


delivered to your store in cardboard boxes. These boxes
can be used to display the products very cost-effectively,
giving the impression also of greater value to the displayed
product.

Consider the horizontal Consider the diagonal


1 cut method.
The following steps will give you a
2 cut method.
Again using a sharp knife…
display that is easily handled in the First, cut from the top of the back of
store. Beginning with the unopened the box to the bottom of the front of
box of product… the box using diagonal cuts and then
First, use a sharp knife and cut join the cuts along
the box around the top and bottom the top and
horizontally, leaving a border of 6 bottom of
cm from the top and bottom of the the boxes:
box:
Then, remove the cut top and you
are left with a display carton, which
can go straight on display or a shelf.

Play it safe.
Second, remove the top lid of the
box and turn it over and place it
3
You need a very sharp knife to cut
alongside the remainder of the box: through cardboard—a ‘Stanley’-type
knife is recommended. Don’t cut
deeply into the box—if you do, you
will damage the products inside.
Remember, safety first. Protect
yourself when cutting. Always cut
away from your body and your other
Finally, move the central sleeve hand. Don’t leave open knives around
from around the centre of the box to for other people to hurt themselves.
the top layer of product. Squeeze the Finally, displays can end up quite tall,
sleeve and transfer the top layer of and for this reason it is important that
product to the top lid. You now have you build them securely so that they
two display boxes from the same box. do not put customers or staff at risk.

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DUMP BINS See also: 125

How to use a dump bin

According to studies by the Russell R. Muller Retail Hardware


Research Foundation in the United States, sales increase by 43 per
cent when retail stores place products in dump bins. Dump bins are
generally used to give the impression that the product is reduced
in price and the customer needs to be quick to get a bargain,
before the item sells out completely. The bins are normally 600mm-
wide baskets or scatter tables. To take full advantage of this sales
strategy, consider the following points…

Position the dump bin special and must be cleared quickly.


1 in the right location.
The dump bin must be positioned on
a major racetrack in the store. Only
use dump bins where the customer
still has 1.5 metre clearance between
the bin and the general merchandise
shelf. If the space is any narrower Dump bins require
you will discourage browse clear and dramatic
shopping and some customers will signage.
get annoyed due to the cluttered
appearance of the store.
Limit the bin’s life.
2 Focus on
one product line.
4
The life of a dump bin with a specific
The product display should focus on product must be short lived. In a
one specific category and, preferably, supermarket change the product in
on one product type only—for the bin weekly; in a hardware store
example, one size and brand of dog the maximum life of a dump bin
food, or one style of sweaters. product should not exceed one month.
Products must be scattered in the
dump bin. It is not a place for tidy Keep the bin filled
displays. Product should look like it
has been dumped, giving the
5 and fresh.
Dump bins must be kept full of
impression that it is a special once- stock. Bins below half full do not
only price and deal. work effectively. They work
exceptionally well as they give the
Sign them clearly. impression of a ‘fresh’ bargain. Also
3
Dump bins must have a sign which
ensure the bins are safe and that the
team has product knowledge of
promotes the fact that this is a priced items on display.
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82
DUMMY DISPLAYS See also: 84, 86, 90, 126

How to dummy-up your displays

Dummy displays are used to create a false impression, to hoodwink


the customer into thinking that large quantities of product fill the
shelves whereas, in reality, the display has simply been made to
look that way. Dummying-up is a particularly useful skill in country
stores where retailers cannot afford to hold large amounts of stock,
yet need to provide an illusion to let the consumer believe that
they are holding a large amount of product.

Dummy-up your relays. There are a number of other


1
It is quite common to have a shelf
techniques you can use to dummy-
up displays to create the impression
that is deeper than the number of of volume and to provide more
products available in that line. If you impact to that display…
do not dummy-up, you will find
that, as the product gets pushed Use empty boxes
further back on the shelf through
depletion, it becomes hidden by the
2 in power displays.
If you are building a power display,
shelf above. Cardboard boxes are but do not have enough product to
ideal for the job of making the shelf give the impact you desire, try using
narrower—and therefore to appear empty boxes in the central void:
fuller:

If you do not dummy,


the product is lost to Dummy
the customer's eye. boxes

Use pyramid displays


Dummy-up with an empty
box and the products will
move to the front of the
3 with a false centre.
Alternatively, you can use stands
shelf where they are visible.
that are shaped like a pyramid with a
Empty box hollow centre. This will give you the
same effect as using dummy boxes.

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83
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Dummy-up the complete


Management Memo
4 base of your display. T he use of props that are not merchan-
dise-enhancing is a common error.
rite
If you need to bring your display to There is a danger of selecting a favou
the consumer’s sight line, use and findin g a use for it in almo st
display prop
and
cardboard boxes to create a base every display. This creates monotony
is
upon which to build your exhibit: leads people to believe that the display 38
never chan ging and they stop view ing.

strings, artificial seafood, bread, meat


and cheeses. But be warned: some
customers will pick them up by
Dummy mistake.
boxes

Dummy-up deep shelves


Fill high spots with 7 or display tables.
5 dummy product. Fruit and vegetable retailers are often
forced to dummy-up deep benches
Use empty boxes or empty
containers of the product to fill high and tables to give the impression that
shelves, out of the reach of they have more product than they
customers, if you want to create an actually do. They use crates to
attractive and full display wall of provide the desired effect:
product. Suppliers will often be
prepared to give you empty products
Product
for this type of display.
Crates
Dummy
products

Genuine
products
Don't forget the magic.
8
When using boxes and similar items
to dummy-up your displays, cover
Consider using
6 artificial products.
these with coloured paper, hessian or
some other material. Customers
Many suppliers now provide realistic want to see the magic of retailing,
looking replicas which can add a not the mechanics. And they do not
splash of colour to your displays— want to see how you build your
particularly food displays. These displays—so work on them at night
accessories include artificial fruit, or behind a curtain and allow the
vegetables, vegetable and fruit final exhibit to be a surprise.

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84
DISPLAYS See also: 100, 110, 112

How to display products


to capture customer interest

The aim of merchandising is to increase the sale of a product by


displaying the product in a way that stimulates customers to want
to buy. The approach adopted will vary, depending on the type
of product, your image, customers’ expectations, available
space, position in the store, and the purpose of your
merchandising strategy. However, whichever merchandising style
you adopt, the key is to keep it simple and to follow these
guidelines…

Catch your customer’s Many merchandisers will use a


1 eye through repetition.
Displaying an item or sign in a
wider step at the base of the display
and then use narrower steps as the
repetitive way attracts the customer’s display achieves height. An
eye. To create this impact through appropriate sign atop the structure
repetition you must keep heights, drives home the sales message.
shapes, colours, direction and sizes
Use a pyramid to sell
identical. Additional interest in such
a display can be achieved by using a
distinctive prop or an eye catching
3 more product.
The triangle or pyramid always
poster. seems to sell more products.

Step your products


2 to provide variation.
Steps develop an interesting display.
The key is to keep the height of the
step the same and ensure that all the
products face the same way. The
essence is uniformity.
The objective of a stepped display Pyramids are easy to construct and,
is to lead the consumer’s eye in a with experience, a merchandiser can
specific direction and, in this way, create a wonderful impact with a
create movement. group of pyramids.
Pyramids can be built from a
wide range of products. If the
Customer
line of vision
product does not enable you to
develop the pyramid shape, you can

use a poster at the peak to create the


required outline.

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Consider zig-zag
4 displays.
Terry Curry of Predictions in
Management Memo
esearch carried out in the United
Melbourne believes that, once you
become skilled at building pyramids,
R States shows a 43 per cent consumer
recall from static displays and a 94 per cent
you can then progress to zig-zag consumer recall from rotating displays, plus
pyramids. This structure zig-zags its 80 per cent of consumers could remember
way to the top of the structure and the product. 39
presents a very pleasing and eye-
catching exhibit.
Be on the lookout for
4
3
6 ideas from elsewhere.
Always keep your eyes open and
2 look at displays in other retail
environments. Adapt any good
1 displays you find in retail industries
other than your own. Your aim
should be to stand out from the
In a zig-zag arrangement, no level is
crowd of competitors in your
the same height as the last one and
industry—and any ideas you can
therefore you can use a number of
creatively acquire from elsewhere
zig-zag arrangements to develop a
will certainly help you do that.
larger display.
Provide a tool box
5 Try radiating
your displays.
7 for the display team.
A box of tools and equipment
Alan Wheeler from the London
specifically for use in setting up
Institute of Design suggests that
displays will save considerable time
another effective exhibit is the
and frustration. The tool box should
radiation or spokes-of-a-wheel
contain such items as:
display. The hub of the wheel is
often raised to give a focus towards staple gun, staples and staple remover
pins of different sizes
the centre of the structure. In this hammer and screwdriver
display you have the opportunity to pliers or pincers
develop ideas based on different a selection of nails
colours, shapes and sizes. screws and screw hooks
cotton (black and white)
nylon thread
Radius
display
adhesives
double-sided masking tape
Hub of wheel pencil
is raised. measuring tape
scissors
a duster.

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86
PALLET DISPLAYS See also: 90, 92, 100

How to display products on pallets

Pallets are used for bulk displays to give the perception that the
consumer is getting a special price because the retailer has
purchased the product in bulk. Pallets can be used in outdoor
and indoor locations, but a handling system, usually a hand or
mechanical pallet jack, will save a great deal of cost in terms of
employee time and labour. Pallets traditionally were made of
wood, but plastic versions are now available.

Stress safety facing the direction of the consumer.


1 with pallet displays.
Pallets traditionally are placed on the
This clearly displays the product and
provides greater impact, especially
shop floor, bulk-stocked with since most bags on the pallet are
products which are usually fairly usually stacked to appear end-on to
heavy. This means that product the consumer.
should be stacked to a minimum Customer's


height of one metre and a maximum viewpoint
of two metres so that the products
are at the correct shopping height for
the consumer. Of course, the weight ▲
Faced
and nature of the product will mean bag/s
that some items must be displayed at
lower heights. Products must be
stacked safely, due to the height of
the pile and their weight. For the
majority of products a brick-lay
Provide point of
pattern is the most secure. 3 purchase information.
First layer Second layer Generally, retailers do not use point
of purchase material as effectively as
they should. For maximum effect,
signs with relevant sales and product
information should be placed on
special stands—not simply (and
Face bagged products
2 in front of pallets.
Large bagged products are
often untidily) taped on to products
facing the customer.
Where you have a gap in the
commonly displayed on pallets. centre of the product display on the
Sales can be increased by placing a pallet, it is far more impressive to use
bag or two in front of the pallet a stand, placed on the pallet, with the

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sign above the product:
Management Memo
I f employing team members to move pal-
lets around your store using mechanised
equipment, it is essential that they be trained
and have passed the appropriate examina-
tions to prove they are competent in this
role.40

Try up-market palleting


4 for improved sales.
An alternative display that is very
5 Delegate pallet-display
responsibilities.
A team member should be made
effective indoors, particularly with responsible for the day-to-day
the more high value products, is to management of the pallets. Bags
use a side stand with a display table often get ripped, possibly causing a
attached to highlight an individual safety problem, and reducing the
product: overall impact of the display as well.
Taping of torn bags may not be the
Point of
purchase sign answer. It is often more effective to
remove damaged bags from the
Display table
display completely. It is the staff
member’s responsibility to monitor
Bulk product pallet displays as well as assist
buying customers with their
purchases.

Some pallet products come in a Place pallet displays


cardboard box that fits on the pallet.
These boxes can be cut and hinged
6 strategically in the store.
If heavy items are being displayed on
back to provide very effective pallets, it is far more convenient to
promotional backboards to the the customer to position the pallets
display. When these backboards are towards the end of their shopping
available they should be used: experience. The need to load large
bags in shopping trolleys at the start
Cut-out is not only annoying; it will also
cardboard discourage the customer from
mannequin
purchasing more items, the result of
Display box
which could be a lower average sale
per customer than you would like.
Pallet

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88
FLOOR See also: 116, 122, 125, 126, 238, 240

How to maximise sales


using the floor of your store

To promote their brands and products, retailers have


traditionally concentrated on using the walls and shelves of
their stores and on hanging items from the ceiling. They tend
to forget that every customer walks on the floor and that
the floor can influence customer buying and provide
an opportunity to promote the business…

Have a floor hygiene sawdust may be required to soak up


1 program. the material prior to mopping. And
make sure those employees on the
According to research, cleanliness is
one of the important considerations mops are trained to remove dirt from
when a customer selects a retailer. the floor and not simply spread it.
They may take a clean floor for
granted—but they find untidy and Consider using floor
grubby floors unacceptable. The
cleanliness program you implement
3 advertising.
Floor graphics are a unique way of
for the floor is therefore critical. selling using floor space. These can
Floors should be mopped, swept, or range from sticky printed labels on
vacuumed on a daily basis, an the floor to high quality base
activity that must take place when material that will last a considerable
the store is closed. Apart from the period of time. Floor graphics can
safety aspect, your customer does complement national promotional
not want to see you cleaning the campaigns, especially when we are
floor. They just want a clean floor. told that 60-80 per cent of a
customer’s time is spent glancing at
Ensure you have
2 a safe floor.
the floor.
Floor graphics can be used to
increase sales for new product
Floors must be slip-free. Apart from
the untidiness of it all, a slippery launches, for branding your store, to
floor is a safety hazard you can ill promote special events, and to
afford in the legal sense. During the provide directional signage for
working day, you may have specific product promotions.
accidental spillages. If this is a Floor graphics can come supplied
potential problem in your store, you on plastic, 3M, Flexon or similar
need a floor cleaning procedure in materials, and can be used on waxed,
place. With some products, a mop vinyl, ceramic tiles, sealed wood,
and bucket may be sufficient. With terrazzo, sealed concrete or marble
certain chemical spills, a bucket of surfaces.

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Remember that the floor is the


Management Memo
most under-used promotional area in
your store and therefore the right T he successful retailer combines out-
side advertising with customer-targeted
in-store advertising.
promotional message can literally
stop customers in their tracks. Problem: Your customer is inundated with
advertising noise everyday. Often, the only
thing they remember is your store name or
Make use of cross selling
4 opportunities.
Floor graphics are ideal where you
the fact you have a ‘sale’. Retailers can get
trapped by unproductive advertising where
they and their competition compete to see
would like to do cross selling, but for who can give up the most margin. The pri-
technical reasons this is not possible. mary (and sometimes only) goal of advertis-
ing is to get customers into your store. Once
For example, one product may need
you have spent thousands of dollars to get
refrigeration and its associated customers into your store, then what?
product may not—try a cream spill
Solution: The most effective, measurable,
graphic and accompanying message and least expensive place to advertise to
below the strawberry stand. Floor your customers is in your store. When cus-
graphics are a unique way of linking tomers are in your store, they are receptive to
such products. your message and they are ready to make a
purchase. Think of advertising as a process
Go high tech. that begins outside the store and continues
5
The latest trend is in the use of in-
while the customer is in the store.
Here are three key points to an effective
overall advertising program:
store laser promotions, which are • Combine your outside advertising program
transmitted through static or moving with effective in-store advertising. Outside
images on the floor. The technique is advertising is a means of getting customers
already being used in nightclubs, into your store. Sign everything that is adver-
tised with high performance signs. By com-
expos and demonstrations, and
bining outside advertising with strong in-store
innovative companies have begun advertising, retailers squeeze the most out of
introducing the technique into every advertising dollar.
retailing. • This is a must— Sign beyond your advertis-
ing. After spending thousands of hard-earned
Investigate floor selling. dollars to get customers into your store, do
6
Point of purchase sales and impulse
not allow your store to become a cherry
picker’s paradise. Compliment your outside
advertising with strong feature/benefits signs
selling has always had a positive on more than just the advertised items. Give
effect on sales. More than 70 per cent customers this message: I have other mer-
of purchasing decisions are made off chandise that you want and need.
the cuff inside the store and, for this • Utilise creative in-store advertising consist-
reason alone, any effective in-store ently and regularly. For example, in addition
promotional strategy—such as floor to using high performance signs, create inex-
pensive in-store flyers. They are a simple, yet
selling—should be considered. For strong reinforcement of your advertising
further details, contact Floor messages. And, since they are inexpensive,
Advertising and Management, you can use them regularly—whether there
Insight Floor Marketing Australia. is a sale going on or not. 41
email: insight@nw.com.au.

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POWER PRODUCT DISPLAY See also: 82, 84, 112, 156, 157

How to build a profitable


power product display

A key to successful retailing is to be consistent in your relay


merchandising and entrepreneurial in your displays. The
power display is the most important display in your store, not
only because it uses the most profitable square metre of
retail floor space available to you, but also because it should
set the upfront image for the whole store. Power spots need
to be planned and managed, and a few pointers will
maximise the return of your investment…

Position the power display bus stop used by people going to


1 in your prime location.
The aim of a power display is to
work each day, you may find that
changing the product on the power
maximise sales and set an image. For display three times a week is
this reason, position your display justifiable in terms of increased sales.
where you know 100 per cent of All of which means that you must
customers will see 100 per cent of plan at least three months ahead in
product. terms of what product will go on
Your prime position is usually your power display. Design a
where customers enter the store. Do planning chart for that purpose…
not locate the display right at the
Product Action Who is Deadline Assistance
entrance, however. Since your responsible? required
customers need to adjust to the
environment before looking at
products, give them about four
metres walking and adjustment
space prior to building the display.
Focus on one product
In small stores you may have to
build the display slightly closer to 3 only.
As the term suggests, this is a ‘power’
the door.
display which infers that you should
Plan your display. concentrate your sales efforts and
2
The life of your power display is
your customers’ attention on one
product. Only in this way will you
based on how often a regular achieve the essential impact you seek.
customer enters your store. If
Build a pyramid
customers, on average, come in once
a week, then change the display once
a week; if it’s once a month, plan the
4 to maximise impact.
Pyramids sell more than any other
display to rotate on a monthly basis. shape, so it’s only common sense to
And if your store is located at a busy keep to this shape. Start building the

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Management Memo
display on a rectangular base of
either product or a ‘dummy’ base
and, to maximise sales, make sure T he Russell R. Mueller Retail Hardware
Research Foundation carried out re-
search in the United States to judge how
the customer’s eye hits the middle of
profitable power displays were for businesses
the display. that built them critically. The research showed

Eye
▲ that sales of that product increased by 540
per cent!
This figure was achieved by taking a prod-
uct from a relay merchandise position and
placing it in a power position. The price
stayed the same, only the position changed.42
Make sure your display
5 is well signed.
Your display is incomplete without a customers and staff
sign which should be dramatic and • checked every day to ensure it
obvious, stating clearly what the reflects the image of the company
product is and its price. Other • dismantled immediately the
information may also be relevant. promotion is over, and replaced
Refer to ‘How to write signs’ (p. 152). with the next promotion.

Give the impression you


6 have a lot of product.
The retail saying ‘Stack it high and
HOW I SEE OUR POWER DISPLAY
Needs lots
of work
Needs some Looks
more work good
We've got
it right
watch it fly’ was no doubt coined Power display
is clearly visible. ■ ■ ■ ■
with power displays in mind. In
Power display
essence, you must make your display is changed at
■ ■ ■ ■
look impressive and full—all the regular intervals.
Eye level
time. If you don’t have a lot of merchandising
product, use dummy boxes at the is correct.
■ ■ ■ ■
base or in the centre of the display to 'Power' planning

make it look larger. Never let the


calendar is ■ ■ ■ ■
up to date.
display go below half full. Its life Signs are
■ ■ ■ ■
correctly written.
cycle should be—full to half-full to
Power display
full to half-full… has the correct
product on display.
■ ■ ■ ■
Display is safe
Keep an eye ■ ■ ■ ■
7 on your display.
and shoppable.

The manager’s role is to plan power


displays and to ensure that the Team members have a role to play as
display is: well. They should ensure that:
• built impressively and reflects • the display is kept full to half-full
your store's image in the eyes of at all times
the customer • a point of sale sign is always
• topical and fashionable clearly visible to the customer
• safe in the bustle of passing • displays are kept clean and tidy.

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HOT SPOTS See also: 82, 90, 156, 157, 238

How to maximise your sales


using hot spots/end caps

Every store has its hot spots—positions that the majority of your
customers’ eyes unavoidably focus on. Traditionally they are at
end caps—those prominent locations at the ends of relays. The
more hot spots you can create, the more sales opportunities you
can achieve. Hot spots should be positioned in every product
category in your store and your team should always be aware of
products on display in these positions. To maximise the potential
of your hot spots, be aware of the following points…

Know where to best


1 position your hot spots. Month
HOT SPOT CALENDAR
Products for
Hot Spots
Allied product
to be promoted
Your team should know where to
alongside Hot Spot
position hot spots in your store. A
hot spot is a prominent or visible January
location where customers’ eyes are February
naturally drawn. These focal points
March
are usually at the end of merchandise
relays or at specific points which the April
customer cannot avoid when May
walking around the store. June
July
August
September
October
Counter
November
Hot Spot Locations December

Plan your hot spot


2 displays.
3 Build your hot spot
displays wisely.
Always use topical products in hot
spots. To achieve this you will need Four points are important in this
to plan these locations well ahead to regard:
ensure you have the right product in • Hot spots need to present
the right place at the right time. Your products to the customer at their
planning needs to consider seasonal sight line. This means you may
and fashion changes, and your hot sometimes need to dummy the
spot should also reflect the image base with boxes to raise the
you wish to create in your store. display to the correct position.

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• Never plan for a hot spot display


if you do not have enough product
Management Memo
to make the display look full and
esearch carried out in the United States
to provide impact.
• Hot spot displays must always
R by The Russell R. Mueller Retail Hard-
ware Research Foundation shows that sales
have a sign to work effectively or of product increase by 229% when moved
you will not maximise your return from a relay management position to an end
cap position.
per square metre.
For this reason, retailers should carefully
• Whenever possible, try and create plan such hot spots, as they can be one of the
43
a pyramidal shape to the display. most profitable areas of a store.
Research shows pyramids sell
better than any other shape.
spots can offer…
Maximise the value
4 of hot spot products.
• Team members must know what
products are on display at hot
spots, and must know why these
Consider the following advice:
• Products being specially promoted products are on display.
by your store should be positioned • They should know the features,
on hot spots or end caps. benefits and price of the product,
• Hot spot displays need to be so they can readily promote the
managed so that product levels go items from these positions.
from full to half full to full. To • Team members should be
maximise return, displays should accountable for checking end caps
never go below half full. daily and facing up products as
• The products on the end cap required. End caps and hot spots
should reflect the range of product must be kept clean and dusted at
that is being merchandised in the all times.
relay-merchandising plan behind • Customers often select products
the end cap. For example, if you’re from the relay merchandise—then
building an end cap or hot spot in see the hot spot. They then ‘dump’
a shirt department, the end cap product on the end cap as they
should reflect the shirts you are select, instead, the promoted line.
promoting within the category. Your team should be aware of this
• The display must be shoppable in behaviour and ensure that the
the eyes of the customer, for the displays are kept clear of such
products on display should sell at clutter.
least three times faster from this • Team members should develop
display than from a relay the skill to promote ‘add-on’ lines
merchandise position. that relate to the product being
promoted at the hot spot. For
Adopt a team strategy.
5 example, if formal shirts are being
promoted, the team should use
Take steps to develop your team to this as an opportunity to promote
capitalise on the advantages that hot coordinated ties.

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WALL OF VALUE See also: 62, 70, 72

How to use a wall of value

The ‘wall of value’ concept is used in a number of mass


merchandise stores in the United States, and to a lesser degree
elsewhere. The stores mail out a flyer to customers promoting a
wide range of products sold on price. Once the customer arrives
at the store they find the ‘wall of value’ at the rear of the store
with the promoted products lined up next to each other.

Ensure only wall products Make the wall of value


1 are promoted in the flyer. 3 work.
To make the concept acceptable to Keep in mind the following points:
the buying public, it is important that • The ‘wall’ is a true description.
the flyers promote only those Products literally cover the wall and a
products on the wall of value, and typical display for one product may be
the wall must contain only those as wide as three metres and stacked
up to the ceiling. The display will then
products advertised on the leaflet. have a price sign on it at the eye level
of a typical customer.
Locate more profitable • If customers prefer the wall products
2 products on the way to the ones on the way to the wall,
then you still have the opportunity to
to the wall. increase your sales as they leave the
Make sure customers, on the way to store.
the wall of value, pass similar • It is important the wall is kept full of
products which have a higher gross products to give the impression it is
providing value.
profit. This is the real key to success, • In the supermarket sector, the wall is
for the aim is not to sell from the normally changed weekly with new
wall, but to offer a more profitable products being displayed. In other
substitute for the store on the way to sectors of retail, the wall is changed at
the wall. These products need to be the same time frame as the average
customer enters your store (i.e. if they
clearly visible to the customer on end come in on average once a month,
displays and must have good ‘on then you need to change the display
product’ signage. Some businesses once a month).
do this extremely well and it works
Experiment with
admirably.
Do not locate wall of value at the 4 variations of the wall.
front of the store. Experience shows One supermarket uses the most
that this results in customers not central aisle in the store as an aisle of
shopping the complete store, with a value. Traditionally this was the least
consequent decline in overall sales visited aisle and it has now become
per square metre. the most visited area of the store.
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REPUTATION See also: 100, 110

How to become famous


for something

For many consumers, retailing can be a boring experience with


so many stores selling the same things in the same way. At the
same time, new stores are opening and reducing the
opportunities for many retailers to increase their market share.
The secret is to become the customer’s favoured store—but first
you have to be noticed…

Know what success


1 really involves.
provide your customers with a
destination product range. Research
your market and find out where
According to Donald Cooper, the
Canadian fashion retailer and other retailers are not providing the
consultant, the key to success is that full width and depth of product
you have to become, in sequence: range and associated services. Then
• noticed set about developing this product
• remembered range and gain a reputation locally
• preferred as the expert and the most
• trusted. comprehensive supplier of this
This means that you must work on a product.
strategy aimed at having you stand It could be you have the best
out from the crowd. selection of diamond rings, Italian
shirts, milk shakes, or camellias. The
Dare to be different. key is that you have to become
2
Perth-based consultant Barry
famous for something.

Do not be shy
Urquhart emphasises that in the
future you'll have to dare to be 4 about your strengths.
different. You'll have to think and act Too often retailers establish the range
‘outside the box’ so your store is that they are famous for, but fail to
noticed by the consumer—in a let the customer know. Assumption
positive way, of course. This means is one of the leading failures in
creating adventurous services, business. Never assume your
displays, staff costumes, and total customers know what you do.
experiences for your potential
customers. Brainstorm ideas

Seek fame—
5 with your team.
3 and fortune will follow.
To be a destination, you have to
Being different and famous takes
team commitment. Believe in the
concept. Involve all team members.
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96
COLD SPOTS See also: 112, 116, 160, 164, 168

How to manage
cold spot selling positions

Every store has ‘cold’ spots—those areas in the store that


customers normally overlook or do not want to visit. These are
usable areas of your store and should not be surrendered as
‘dead space’. Often it can be a real struggle to turn them
into ‘live space’. How can you encourage your customers to
visit these quiet, backwater areas?

Identify your cold spot • Locate areas where product is


1 areas.
Every store has its cold spot, an area
hidden behind other shopfittings
or the counter.
where few sales are made. The first • Identify areas within your
priority is to identify these areas, and retailing environment, referred to
here are several strategies you might by the team as ‘the back’—chances
adopt: are it is a cold spot.
• Follow customers around, and
plot their route. In this way you Bring some life
will have a clear pattern of
customer flow and the areas not
2 into cold spots.
To increase your overall sales per
shopped. square metre, your objective will be
• Look for dead-ends and badly lit to increase customer usage of the
areas in your store. Customers cold spots you have identified.
tend to avoid such areas. Perhaps you simply need to inject
• From your records, identify some life into these areas. Perhaps a
product areas that are achieving little reorganisation is all that’s
lower sales per square metre than required. There are a number of
you have anticipated. actions you might consider:
• Find stock areas where product is • Do you have the right product in
getting dusty due to slow this area? For example, impulse
stockturns. lines in the rarely visited parts of
the store will not sell. On the other
• Identify areas where displays are hand, if you move a purpose line
cluttered and difficult to shop. into this spot, you will force the
• Monitor the notoriously poor customer to ‘shop it out’ in this
selling positions—right behind the area. Supermarkets often place
windows, and the areas such essentials as toilet paper in a
immediately to the left and right ‘cold’ spot (aisle) to force
of the entrance. customers to shop there.

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97
Management Memo
• Try converting your cold spot into
a browse area. In a hardware
store, for example, it could be an
G ood displays can become dead dis-
plays due to lack of attention to detail.
Items often left unfinished include pins
ideal location for a power tool not
removed from garments, dirt and dust
not
department, or a seedling or removed from surfaces, glass not clean
ed,
bedding plant department in a soiled signs, signs with no borders, tools
left
garden centre. in the display, and lighting not checked. 44
• Consider using a cold spot as a
customer service facility, for
example: coffee or hot bread, will draw
Changing rooms people to them.
Information booths • Perhaps try a combination of a few
Toilets of the above ideas in one of your
Enquiry counters cold spots.
Seating
Refreshment facilities Be prepared to change.
Demonstration areas
Parking for trolleys or baskets.
3
Always be prepared to experiment in
• Re-examine your customer flow. terms of altering your customer flow.
It may be a cold spot because the Only in this way will you be able to
store layout is wrong. Re- maximise the number of hot spots
merchandising may bring and minimise the cold spots.
traditional cold spots to life. Retailing is a changing environment.
• Consider using cold spots for key If you do not experiment, you will
cutting, shoe fitting, fitting rooms, never know what successes you
lay-by, or parcel pick up. might have achieved.
• Inject some movement into the
Involve your team.
area. Consider a water fountain or
a moving display of some kind.
4
Always involve the team in
• Introduce noise, such as the sound managing and monitoring the cold
of a water feature or products that spots. If everyone on your staff is
make a noise—no problem for a aware of the problem, and proactive,
pet retailer. those cold spots will soon warm up.
• Experiment with colour. Blues and
whites are cold. Reds and yellows Always monitor
are hot. Use ‘hot’ colours in a
‘cold’ area.
5 cold spots.
Once you have identified a cold spot
• Consider the use of smells. and made appropriate changes,
Negative odours, such as ensure that you monitor and manage
fertilisers, will create a cold spot the area so that you can be confident
while positive aromas, such as the improvements have worked.

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98
SHELF FILLING See also: 128, 130, 132, 134, 136

How to manage shelf filling

Shelf filling is an ongoing task that has to be carried out in the


majority of stores. Supermarkets often employ night filling teams to
tackle this job, while smaller stores may be required to carry out the
task during the trading day. Shelf filling is often looked on as one of
the routine, unskilled tasks in the store. It is, however, a skill that
needs to be reflected upon and developed to ensure that it is
carried out cost effectively and methodically, in keeping with the
company’s image. Begin by considering the following advice…

Plan your shelf filling. Clean the shelves


1
If you don’t think about and plan
3 before filling them.
Consumers select stores for a variety
your approach to shelf filling, you of reasons—and cleanliness is one of
will make poor use of the time them. It is therefore not only
allocated to the task and invariably important for your overall store
end up with a flawed display—good environment to be clean and tidy,
product mixed with damaged each shelf must be clean and tidy as
products, loose packaging, torn well. So, an important task for
labels, and dirty shelves. Therefore, managers is to ensure that the shelf
prior to any shelf filling activity, filling team gets into the habit of
always ensure that the team involved cleaning the shelves prior to putting
is fully conversant with appropriate stock on them. And remember,
procedures and aware of the cleaning a shelf means cleaning the
standards you expect of them. shelf edge strip as well.

Ensure stock is available Keep the workplace safe.


2 to meet demand.
It is simply inefficient in terms of
4
When filling shelves, staff will
cost and time if your shelves lie normally bring boxes out of the
empty as a result of poor planning. warehouse or down from above the
For this reason always ensure that shelf. It is important that your team
sufficient stock is placed on the shelf keep aisles safe at all times,
to meet consumer demand for a particularly if the shelf stacking is
given period of time. The minimum being carried out during trading
period of time for sufficient items to hours. This can be achieved by
be on the shelf should be at least one making sure that boxes are placed on
trading day, but you may need to one side only of the aisle and that
ensure that you have enough stock customers have safe access down the
on the shelf to keep you in business aisle. Safety and tidiness are the two
for at least a trading week. considerations here.

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5 Abide by the FIFO rule. Management Memo


nside your store, always arrange prod -
First in, first out (FIFO)—that’s the
golden rule when it comes to shelf I ucts small to large and left to right:
45

filling. When filling shelves you


must take the old stock out, put the
new stock at the back, and then face
up using the old stock. Your aim
must always be to rotate stock. If you Consider indenting.
don’t apply the FIFO principle, you
could end up with old stock that
8
A leading UK supermarket has a
becomes unsaleable. Of course, FIFO company policy of indenting the
is critically important with food and shelf every three metres. Indenting is
perishable products. where you face up, but leave one gap
Accountants tell us that it costs on the shelf to give the impression
you 1 per cent per month of the that one item has already been sold.
buying price for a product to sit on Indenting is most effective on a
the shelf. In other words, if a product slow moving product line. It can
has been on the shelf for 12 months, work incredibly well. Customers
the costs go up 12 per cent to bring tend to gravitate to the indented
the same return as in month one. product line, assuming someone has
already purchased from this section
Face products
6 correctly.
of shelf.

Products should be put on the shelf Clean up afterwards.


the correct way up with the
promotional side of the label facing
9
Boxes on the floor are a safety hazard
out towards the customer. Make sure to team members and customers. As
price and date codes are clear, soon as you’ve finished, you must
accurate, and visible to the customer. remove all empty boxes, rubbish,
At the same time fix loose or torn cleaning materials, and anything else
labels. Any damaged products that has been left on the sales floor.
should be removed from the shelf
and recorded in a shrinkage book. Check what message

Face up items
10 you’re saying to the
7 not replenished.
You won’t be refilling every product
customer.
When the job is finished make sure
all shelftalkers are next to the correct
on the shelf, but you should face up products. A frequent mistake in
items that are not being replenished. many stores is to fill the shelf—and
Take the remaining items on the then forget to realign the shelftalkers.
shelf and move them forward to give This can cause customer confusion
the impression that the shelf is full. and may result in lost sales.

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100
CREATING THEATRE See also: 110, 112

How to create theatre in your store

Retailing is about inspiring people to buy. Whatever sector of the


retail industry you belong to, you need to create some
excitement to entice customers back to your store rather than to
your competitors. International retail and marketing consultant
Barry Urquhart believes the key is not being better than your
competition; the key is being different to your competition.
Theatre displays give you the opportunity to dare to be different.
They are about inspiration and magic…

Plan well in advance industry sector and company.


1 of the event.
Theatre displays need to be planned
The following major events may
provide an excuse (if you need one)
at least three months ahead— to build a theatre display:
although some would argue it should January: New Years Day, Chinese New Year
(varies)
be six months or more. In the United
February: St Valentine's Day, Idhul Fitri
Kingdom, Christmas theatre displays
March: St Patrick’s Day
are planned 12 months in advance. April: April Fool’s Day, Easter, Secretaries'
Displays work better if the whole Day (varies around the world)
team participates in the planning May: Mother’s Day (some countries hold in
stage and are then encouraged to get other months), May Day
involved in developing the June: End of Financial Year (not all countries)
July: Independence Day (US), Bastille Day (Fr)
promotion itself. At the initial
September: Father’s Day (not all countries have
planning meeting, decide on the Father’s Day in September)
theme, what props will be used, and October: Harvest Time, Halloween
on the budget. November: Guy Fawkes (UK)
Remember, the key is that you December: Christmas
need to be different to attract the
Compile your own promotions
customer. If you do something
calender and have it in full view of
different, people will talk about you
your team:
to others which means, to encourage
‘word of mouth’ communication, PROMOTIONS CALENDAR
you might even need to be a little Period Main Promotions Secondary Promotions
outrageous in what you do.
JANUARY 1. 1.
2. 2.

Build theatre
2 around events.
FEBRUARY 1.

MARCH
2.
1.
2.
1.
2.
1.
2.
Theatre displays should revolve APRIL 1. 1.
around international, national, 2. 2.

regional and local events as well as DECEMBER 1. 1.


promotional themes specific to your 2. 2.

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101
Sell the magic Management Memo
3 not the mess.
Customers want to believe in the M ake your sidewalk [pavement/out-
side footpath] head and shoulders
magic of your theatre activities—they above other retailers on the block. The thea-
don’t want to see theatre displays tre starts on the sidewalk. If someone sur-
veyed your store from across the street, you
being built. You have two options. want your entire package to stand out. This
You either build displays when the includes the shop window, signs and overall
store is closed or you place a large storefront. You need to ask:
black drape around the work area • Can I change the colour of the sidewalk?
and reveal all when the central • Can I put a large mat at the entrance?
display is completed. Some stores • Can I plant flowers or place pots to give the store
an attractive image?
display signs saying: ‘All will be • Do I have benches facing the shop window?
revealed in… one hour’, thereby • Do I clean the sidewalk twice a day? A dirty
creating expectation in the customer’s sidewalk is a turn off.
mind and allowing your team to • If it snows in my part of the world do I clear away
the snow on a regular basis?
build the display while the store • If it is sunny, how can I provide shade? 46
continues to trade.

Measure the success


4 Train the team and
make them actors.
6 of the project.
Theatre is about acting. If you really If you don’t measure it, you can’t
want to create for your customers a manage it. Record how much you
memorable visit to your store, get the invested in creating the display and
team to dress the part. If it’s the increase in sales you achieved.
Christmas, wear Christmas hats; if Use this as a target to beat next year.
it’s St Valentine's Day, wear a big red Dismantle the theatre
heart. Make sure that team members
have features and benefits knowledge
7 display promptly.
As soon as the event has finished you
about the theme-linked products on
must dismantle the display. Nobody
display and are able to advise
wants to see Christmas still around
customers on how to use the products.
on January 1st or St Valentine’s Day
still being promoted on February 15th!
Record the event
5 for future reference.
Theatre displays normally occur on a 8 Meet with staff
after the event.
yearly basis. When the display is Hold a team meeting to review the
completed, take photographs to success of the promotion. Get ideas,
place in a scrapbook for referral next and note them down, on how you
year. If you don’t, you’ll have trouble can improve the promotion next
remembering the details in twelve time. If you provide costs and sales
months time. Make notes in the success information to the whole
scrapbook of what worked, what you team, they will share ownership of
need to improve upon next time, and the initiative, and you will motivate
how successful the promotion was in them to make the promotion do even
dollar terms. better on subsequent occasions.

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102
HOLIDAY RUSH See also: 100, 102, 108, 112

How to prepare your staff


for the holiday rush

Christmas is one of the most important trading periods of the


retail year in the Western world. The impact it has on sales will
vary with each retail sector but, whichever sector you belong to,
it is critical that you maximise the sales potential of this peak
festive season. One of the keys to success is a staff trained and
ready to handle the extra demands of this exciting time for
retailers…

Motivate the team. Reduce stress


1
Christmas should be an exciting time
3 in the team.
Many people find the lead-up to
for your team even though it is one Christmas a stressful period. Your
of their busiest work periods. To objective is to reduce this stress.
maximise your success over Consider these strategies offered by
Christmas, you should involve the Jurek Leon of Terrific Trading in his
team in the planning stages. Have a Christmas ideas newsletter:
Christmas planning meeting well • Employ someone to keep the lunch
before the holiday sales period to room looking fresh and tidy during
discuss your plans, your staff the Christmas rush.
involvement, and to canvass their • Place a VCR in the staff room and
ideas. rent some humorous videos for
Be objective in terms of precise viewing in free time.
goals—targeted total sales, average • Hire a masseur to give mini
sale per customer, number of items complimentary massages to staff
per transaction, and conversion rate. (and even as a Christmas service to
Compare the anticipated targets with customers).
last year’s results and discuss how • Conduct a joke-a-day competition
this year’s targets will be achieved, with staff.
recorded, and measured. • Schedule time off for staff to do
their own Christmas shopping.
Implement a holiday
2 countdown campaign.
• Make an effort during this busy
period to ‘catch team members
doing something right’ and to
Have a Christmas countdown
reward them publicly.
campaign where each day everyone
can compare results against targets.
Focus on staff
Daily progress could be entered on a
whiteboard summary chart in the 4 employment needs.
staffroom as part of the motivational Your team will get exhausted during
strategy. this period and you may need to

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change rosters and hire temporary
staff. Sign up temporary team Management Memo
f you have a large Jewish clientele, you
members well before December.
Contact local colleges and retail I should consider Chanukah decorations,
a cand elab ra, sign s sayi ng Hap
py
training providers who may have im custo mer base ,
Chanukah… For a Musl 47
trainees requiring retail experience Idhul Fitri is the majo r annu al celeb ratio n.
over the Christmas period. Hire
special staff to answer your phones
and free up your sales team to sell. this time of year, they must act
Deal with poor performance as it like Santa's helpers—even when
occurs. If you leave it until after there is a line of frustrated
Christmas, your high performers shoppers demanding VIP
may well become disillusioned with treatment. Even simple advice,
those staff members who aren't like doing deep breathing
pulling their weight during this rush exercises on the job, will help
period. them at this time.
• Conduct an induction program for
Train the team.
5
Every staff member needs to be on
new casuals so that they quickly
become a part of the team.
the ball for Christmas and a short • Clever sales assistants should be
training program will prove able to be quick off the mark with
beneficial: gift suggestions for the hard-to-
please relative or the friend who
• Provide adequate training based has everything. Have you
on the ten most commonly asked provided your team with lists of
questions over the Christmas such suggestions?
period:
- Does it come equipped with
Keep your staff
batteries?
- Can I return it if it is not suitable?
6 on their toes.
- Will it work overseas? Christmas is a time when the team
- Have you a follow-up service? should be order makers, not order
- What happens if it's the wrong takers, i.e. approach the customer
size? and not wait for the customer to
- Is it guaranteed? approach them. This means your
- What instructions are provided? staff must be well drilled in the
- Can the recipient change it for basics of Christmas selling:
another colour after Christmas if • Welcome the customer with a
they don't like the colour? Christmas greeting.
- Do you have other sizes, if it must • Use open questions.
be changed later?
- Do you gift wrap?
• Sell during busy periods.
• Train the team on how to remain • Add-on sell.
cool and calm in times of stress. At • Ask for the sale.

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104
HOLIDAY PROMOTIONS See also: 102, 216, 218

How to maximise
your holiday promotion

Christmas is that one time each year when a business can attract
shoppers who would otherwise walk past the store. For most
people, Christmas shopping is a chore, and any retailer who can
successfully promote their business will attract more customers at
this festive time—and, importantly, generate more sales.

Plan special Christmas Taste—offer them refreshments and


1 promotions.
Christmas is a competitive time in
samples of Christmas goodies.
Fragrance—use Christmas spices.
Noise—have carols being sung in the
the retail industry. Retailers need to store. Ideally, get your team together
do something different in terms of during the day to sing to your
customer service, even entertainment, customers. Or employ wandering
minstrels during peak periods.
to attract the customer. Your Touch—provide seasonal products and
promotion can be varied and items that your customer can touch,
exciting, and include, for example: such as Christmas trees, ornaments
• Take up a local charity cause over the and large cuddly toys.
Christmas period and be visibly seen
to promote it. Build Christmas displays.
• Network promotions with such local
retailers as the Health Shop and a Gym.
3
For many of us, one of the magical
• Have a Christmas party for senior moments of Christmas was, as
citizens and young toddlers—not at children, going to town to look at the
the same time, of course.
window displays and Christmas
• Organise special customer events
during the lead-up to Christmas.
lights during this festive period.
Depending on your circumstance as
• Have a value-added promotions
period, featuring lucky dips, balloons a retailer, Christmas displays can be
with gifts in them, and the like. real winners in terms of customer
• Install a Christmas suggestion box support. Your display can be
where customers can offer their ideas. animated, fun, zany, interesting,
• Send Christmas cards to your regular unusual, newsworthy, educational,
customers and put a handwritten note or magical—but, whatever you do,
of thank-you in the card. ‘dare to be different’.

Make Christmas
2 Create atmosphere.
4 special for customers.
Focus on all the senses to make an Jurek Leon, of Terrific Trading,
impact on the Christmas customer: provides a host of ideas to help

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105
Vol. 1: See 398

retailers get the most out of the


Management Memo
Christmas trading period. Among his
tips on improving customer service
during this time are:
T he first step to a profitable Christmas is
to determine what attracts customers
to your business and to promote that aspect
I’ll make you glad to talk with me: heavily. Your promotion should centre on
• Make everyone feel special. different or unusual products, perhaps a spe-
• Remember, every customer is cialised hamper service or free gift wrapping.
different. Treat each as an individual. The second step is to determine what
• If you see someone without a smile, promotional strategy will attract people to
give them one of yours. your shop. Some retailers base their promo-
• Occupy the children. tional strategy around the image of Christ-
• Occupy husbands/boyfriends. mas. A common example is the 'Christmas
Ham', which is no different to the ham offered
Welcome your customers: throughout the rest of the year—but the word
• At peak times have a specially 'Christmas' attracts customers.
designated person welcome your The way you promote your message will
customers. Make sure they are clearly also influence the number of customers you
identifiable by your customers, attract. Perhaps you can advertise in the
perhaps with a sash over their media, decorate your store, have a point of
shoulder. sale display, or use face-to-face selling.48
Cater for the elderly:
• Provide chairs at strategic places for
your elderly customers.
• Provide cold drinking water and other simple as a ribbon around the goods.
refreshments. • Take steps to ensure long wrapping
queues are avoided at the busy times.
The male shopper:
• Male customers are less comfortable Make it easy:
and confident about trends, sizes, • Do not have customers waiting to be
colours, fragrances. Think about how served.
you can assist them to feel more • Provide different service options—gift
assured. vouchers, phone orders. Many
professional people often do not have
Photos: time to shop, so provide a service
• Introduce a photographer to where they can phone up, receive a
photograph families and friends in gift list, then phone back and place an
front of a festive backdrop. order which can be delivered to their
Gift-wrapping: home or office.
• Provide gift-wrapping as an inclusive • Have an area dedicated just for
service. You can pre-wrap a gift for children (no adults allowed) with
customers who want to buy in a hurry someone to help them select gifts for
or you could do on-the-spot wrapping brother, sister, parents and
where the customers can choose their grandparents. Goods should be priced
own paper and ribbon and can then accordingly.
enjoy seeing it wrapped professionally. • Have a Christmas catalogue from
• Make sure you have trained wrappers. which children can buy presents for
• The service cheers up customers and their family. There could be a $2.00
it’s great for males since it provides a page, $5.00 page, $10.00 page and a
complete package. $20.00 page.
• Train your wrappers to smile and talk Keep people informed:
as they wrap. • Today’s customers are hungry for
• Select volume merchandise and pre- information. Provide Christmas-
wrap 30-40 per cent. This can be as oriented ‘tip sheets’ for customers.

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106
VALUE ADDING See also: 28, 127, 157, 164

How to sell concepts not products

It is possible for a retailer to make more money than normal


selling the same product. To achieve this, you need to take
the existing product and change its perceived value in some
way. This means thinking outside the box and presenting the
product in a different way. It’s called adding value, and it’s
all about selling a concept rather than the product…

Make your product stand some colours to have greater value


1 out from the rest. and significance than others. In hard
economic times, for example, ‘classic
Today’s consumer is exposed to a
wide range of products. Your colours’ such as navy blue and indigo
product not only has to compete are preferred by customers because
with similar products, but you have people tend to become conservative
to compete with other retailers when the economy slows down.
selling that same product. In Australia in the 1970s Mission
To gain the attention of today’s Brown was the fashionable colour for
sophisticated customer, the quality houses, replaced later by Brunswick
of your product, as perceived by the Green, and even later by pastels and
customer, has to stand out. You need the Tuscan influence. The result is that
to differentiate your product from a today, most people, after purchasing
competitor’s product. a house painted with Mission Brown,
You can alter your product in a quickly repaint it using a more
variety of ways so that it is different modern colour. According to colour
from that of competing retailers—by specialists, the last decade or so of the
grouping products differently, twentieth century saw an emphasis
combining with other products, or on the environment– so ‘earth’ colours
using different packaging, and so on. and greens became fashionable.
You must make the product appear To maximise sales through
to be worth more in the eye of the adding value, retailers need to keep a
customer, hence the term ‘adding close watch on colour trends and
value’. study what is happening in the
marketplace. When using colour to
Try using colour. add value, remember the evolution
2
Adding value can take a variety of
of colour trends: Colour tends to
start with expensive, high end
guises, and the use of colour plays an products, but colour saturation
important role. Colour is a fashion occurs when medium priced items
concept, and customers perceive are promoted using that colour.

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Build events around


3 your products.
Management Memo
If you tie your product to events in
some way, you can get more money
I n value-added terms, think globally when-
ever you can since the world is getting
smaller and people are travelling more often.
for your product. For example, This means you should have at your finger-
promote roses for St Valentine's Day, tips, for example, a series of delivery charges.
strawberries for Wimbledon, and These could include:
chrysanthemums for Mother's Day. • Express delivery—we’ll deliver it today.
• Normal delivery—we’ll have it to you
within five days.
Investigate the use of low
4 investment strategies.
• International delivery—we’ll deliver it any-
where.
And don’t forget to cost in gift cards, wrapping
To increase the worth of your
product, you need to use low etc. as part of the package. 49
investment value-adds to obtain a
high investment return. Some low
investment opportunities could company in the marketplace, while
include: still building on its reputation for a
• gift-wrap the product quality, niche product.
The first priority was to move the
• tie bows and ribbons on the emphasis away from the traditional
product product and to sell the perceived
• group products together in a benefits to the consumer. This was
different way achieved by introducing a seasonal
• add balloons, gift cards etc. collection of chocolates. Then the
• use more upmarket colours in the chocolates were categorised in a
presentation different way— the Continental
Range, the Premier Range, The
• change the language used to sell
Specialities, the Fine English Range,
the product.
and so on.
They also introduced ‘The Year of
Learn from the
5 experience of others.
Chocolate’ concept. Customers were
encouraged to join a chocolate club
The trade magazines often relate and each month were sent a different
value-add success stories which range of chocolates with a message
provide excellent case studies for on a gift card. On birthdays,
you, as a retail manager, to reflect customers received an extra treat—
upon. To illustrate the impact of Champagne Truffles, and extra gift
changing concepts, consider for packs were provided for St
example a company that has retailed Valentine's Day, Mother's Day,
chocolates for nearly a century. Easter, and Christmas.
The company had built up a Yet, during all this time, the
reputation for quality chocolate sold product essentially stayed the same.
by weight, but in recent years had But the concept changed and the
found its market share in decline. price increased. The result—sales
The challenge was to reposition the increased!

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FOREWORDCONTENTS PREFACE TESTIMONIALS
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108
NEW PRODUCT LINES See also: 28, 106, 157, 192

How to introduce a new product line

New products are the life-blood of retailing. They are seen as


a means of enhancing our lives and, for this reason, are of
considerable interest to shoppers. Which is one reason why
retailers and suppliers spend many days at trade shows around
the world searching out new product lines. The key to any
product’s success, however, rests with the retailers and how
effectively they are able to introduce these new items to the
customer on the shop floor…

Train your team in Attend to signage.


1 the benefits and features.
The introduction of a new product
3
This is a new product. It must have a
into your store demands that your sign that tells customers so and that
team be provided with information promotes the product dramatically.
about the item. Some manufacturers In big letters you should use such
and suppliers forward fact sheets for words as:
sales team members; the majority do ‘New!’
not. If necessary write your own fact ‘Newly selected for you!’
sheet on the product and distribute it ‘New in Store’
‘Your new…’
at a team meeting prior to the store
‘Latest Fashion’.
launch. The sheet should include the
date of the launch, the location of the The word NEW! is a major customer
product in the store, retail price, and motivator and should be used
features and benefits of the product. whenever possible.
Allow time for a short question and
answer period. The relevant category Provide information
supervisor should lead this short
training session.
4 to enhance the sale.
Consumers love information,
especially the type of information
Position the product
2 strategically in the store.
they can share with their friends. If
you can source fascinating data to
enhance the product and its
The product must be seen by all your
customers if it is to make an impact. acceptance, you should pass this on
It should be positioned in the store to your team and customers.
either in a major impulse buying Depending on the product, a gift
area, or taken out of the category and shop, for example, could feature
displayed as a stand-alone item in such interesting information as:
the major racetrack or near the where the product was discovered,
entrance. the part of world where it is made,

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109
the origins of the people who make Management Memo
it, what it was traditionally used for. actors affecting customers response to
F promotions and their degree of effec-
tiveness:
Use demonstrations
5 to generate interest. Price
Creativity
20%
35%
This is a new product that your 100%
Timing
consumers have never seen before. It The offer 200%
is therefore important that they are Target the customer 500%
shown how to use it, or what it looks the
As can be seen, hitting the right target is
like, how it is put together, or what it key to success, then providing the right offer
g
tastes like, how it feels, or what it is and at the right time. Creative advertisin
like to wear. It is your job to bring stimu late inter est and amu seme nt, but
may 50
this product to life. is not always the best approach to take.

Promote. Promote.
6 Promote.
the team about it.
Give any new product maximum
exposure. Take any opportunity you • Give a talk to consumer groups
can to promote the new item. Here about the product.
are some useful ideas that have • Cross network displays of the new
worked in the past: product with other retailers in
• Send a complimentary sample to your area who do not sell the
your favourite radio or television same category.
newsreader or chat show • Write about it in relevant hobby or
presenter. special interest magazines.
• Have a demonstration outside • Have your staff use it themselves
your store, a strategy that works so they can say, with complete
exceptionally well in shopping honesty, ‘when I first used it…’.
malls. • Send out flyers in your catchment
• Forward an article and a area.
photograph to your local
newspaper. Select new product lines
• Send a complimentary sample to a
local celebrity or expert in the
7 carefully.
The world is full of new products
product field, such as the that fail. This is primarily due to the
gardener, hardware specialist, or manufacturer not doing sufficient
cook, who writes a guest column homework. Select new products
in the local newspaper. with caution. Do not buy because it
• Ensure a team member takes it is new: buy because it is proven and
home, uses it, and reports back to fits your targeted customers.

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110
WINDOW DISPLAYS See also: 82, 100, 112, 127

How to set up a shop window

The small shop was once the workplace for family-run businesses.
Large windows were put ‘in the front’ to provide more light to the
cobbler or weaver who worked in the front room. As businesses
evolved they started selling from the front room and the window then
became an area to display products. At the same time a facia was
erected above the window to promote the business. Thus were the
origins of today’s shop window. Its aim—to grab the customer’s eye
and to promote the business, products and services…

Look on your window A final decision will depend on


1 as a canvas.
UK shop window consultant Alan
your position in the marketplace and
the demographics of your customer
Wheeler stresses that an excellent base. This may mean you will need
shop window is a marriage between to do some customer research prior
creativity and scientific principles. to deciding on a window style.
Look on your shop window as an
artist would look on a painting: Group your products
The Picture Frame
3 for effect.

The frame of your The way you group products has a


shop window major effect on the appearance of
Picture your window. The skill is in

▲ Your placement arranging product and props in an


of products and
props interesting way that catches the eye.
Canvas
Background colour The majority of displays are based on
the triangular shape.
As a general rule, if you wish to create Consider whether the display
a down market image, then set up a should be symmetrical or
window where customers can look asymmetrical. Symmetrical displays
into your store. If you want a more allow for no variation, and give a
upmarket image, then an enclosed formal, predictable look to your shop
window may achieve this result for window. The eye is usually drawn
you. In either case, you are the artist towards the centre of a symmetrical
and, from outside, it is your canvas. display:

2 Select a style to suit


your business.
Windows can be contemporary,
traditional, trendy or used to sell
volume products. What style of
window would reflect your business?
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MANAGING
WINNING OVER PROMOTING MANAGING INDEX
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YOUR CUSTOMER
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111
Terry Curry of Predictions in
Management Memo
Melbourne says that asymmetrical
displays still have balance, but H ere are a dozen tips for creating a
‘selling’ window or in-store display:
products and props are displayed in 1. Create impact. Displays should stop peo-
a number of ways: ple in their tracks.
2. Generate interest. Entice customers to
take a closer look.
Prop
3. Use your imagination. Use colour, light-
ing and unusual props.
4. Use space well. Highlight key features
and avoid clutter.
5. Be objective. Cross the street and check
that your window display is eye-catching.
Create a colour theme. 6. Involve customers. Make displays acces-
4
Colour creates mood in your shop
sible and easy to reach.
7. Make the buying process simple. Price
and label the merchandise.
window—sexy, modern, innocent, 8. Be bold with your designs. Clearly show
nostalgic, sombre, trendy, or fresh. your unique design skills.
The general rule is to use a lighter 9. Add value to your design work. Use your
background colour that creative skills.
complements your merchandise. 10. Get the lighting right. Light window dis-
plays during dark evenings.
11. Change your displays frequently. Stimu-
Plan your window well
5 ahead of the event.
late continued interest.
12. Be different. Keep ahead of your compe-
Planning is essential. If you plan the tition. 51
shop window display as you build it,
you’re likely to end up with a jumble
of products and send a confusing • Create emotion with colour and props,
not the stock.
message to the customer. Plan shop • Brainstorm what props you need with
windows at least six months ahead. your team and how you can create the
Develop a planning sheet for each effect you want.
window with these headings: Date, • Plan six months ahead.
Theme, Merchandise, Risers • Dead blow flies and moths in shop
Required, Props Required, windows show you do not care. Check
the windows each day.
Background, Signage Required.
• Change your shop window to
entertain your customers. A dress
Manage your shop
6 window.
shop might change dresses in the
window every other day to keep
passing customers interested.
Managing your window displays is
critical to your success—after all, • People need personal space at the
store entrance. Do not clutter this area.
they are, to the passers-by, the eyes • Your shop window is a 24-hour
of your store. The following ten tips advertisement. Make sure it ‘sparkles’
will help you dare to be different: in the dark.
• It takes four seconds to walk past the • Link your shop window displays to
average size shop window. What does your internal power displays and hot
the customer remember when they spots.
walk past yours? • Signage is essential in shop windows.

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MOVEMENT IN DISPLAYS See also: 100, 110

How to create movement


in your displays

Retail competitiveness demands that you make your displays stand


out from the hundreds of others seen by the public every retailing
day of their lives. The great majority of displays are static. If you
want to try something different, and stand out from the crowded
marketplace, consider creating some moving displays—and here
are some ideas…

Give a ripple or wave provide a swinging action to


1 effect to banners.
Machines are available which allow
products.

you to hang banners containing your


message and to give a ripple and
wave effect to the hanging. The
ripple machine is used with soft
material and the oscillator works to
give a waterfall effect.

Remember:
Movement + Interest = Sales

Place your promotions


3 on a turntable.
Turntables are guaranteed to attract
A wave machine oscillator your customer’s attention to a
provides a wave effect and is best specific product, and are ideal for
used with stiffer banners. Both primary promotions where you
systems are very effective when believe movement is required to
combined with an adventurous use focus the customer’s eye.
of lighting. A typical turntable has a diameter
of 500mm and upwards, and uses a
Put your product
2 on a swing.
Many products lend themselves to
low voltage motor with a gearbox. It
can be switched to go either
forwards or in reverse.
display on a swing. Low generator Small 500mm turntables are
motor systems are available to capable of taking up to 30kg central

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weight while larger ones can ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
accommodate a motor vehicle.
Management Memo
Use rise and fall
4 in your display. R esearch in the United States has re-
vealed that 43 per cent of people could
recall products on static displays in stores.
Rise and fall machines are electrically
When movement was introduced to the dis-
operated and suspended above your
play 94 per cent could recall the display—and
display. Signage, banners, products, a staggering 80 per cent could name the
or other promotional material can be product as well! 52
hung from the machine using nylon,
and the item/s can be displayed at
the same level or at different levels. balloon to jump and move around is
The machine creates an up and down just one of them. Balloon jumpers
movement which gives a three- work using two small cell batteries
dimensional effect to the display. and a nylon loop. Balloons can be
decorated to look like flowers or
faces or have the product name
represented on them.

helium balloon

nylon cord
Nylon Cord

battery driven jumper

Get a balloon to jump


5 out of a box.
Displays with Movement are available
from Robert Stockwell Associates,
Simple ideas are often the most 20 Twixt vears, Tewkesbury, GL20 5B7,
effective—and getting a helium United Kingdom.

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Managing
your Store
The art is to be where the ball is going to be,
not where it's been.
Sam Walton
founder of the world's largest retailer, Wal-Mart

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CUSTOMER FLOW See also: 92, 94, 96

How to maximise
your customer flow

Retailers would like to get 100 per cent of customers to see 100 per
cent of their product. But recent research into one retail sector in
the United Kingdom found that 75 per cent of customers only saw
a maximum of 20 per cent of product. Imagine how sales would
improve if the customer flow encouraged all customers to see all
product. Your aim should be to direct customers around your store,
with clear direction, and the following suggestions will help you to
maximise that customer flow…

Create a layout to flow around an informal layout:


1 to reflect your needs.
Store design is the province of the
professional store designer who
knows that layout is determined by a
consideration of the way the retailer
would like customer traffic to flow.
This usually reflects the needs of
particular retail sectors and the Counter

image a store hopes to achieve.


There are two extreme styles of Between these two extremes there
layout: is a range of variations in layout, all
The Grid Layout of which work for different styles of
Supermarkets are the experts at retailing.
implementing this design. It is a
Locate your checkouts
simple layout that attempts to ensure
that 100 per cent of customers see 100
2 to direct customer flow.
per cent of product: The position of checkouts is critical
in establishing how customers will
flow around your store. When
entering a store the general reaction
is to walk away from the checkout.
If the location of the checkout is
wrong, you may find that you have
Counter
obstructed half your products from
the customers.
As a general rule in Australia, New
Informal or Boutique Layout Zealand and the United Kingdom,
This design is common in smaller we are accustomed to keeping to the
stores. The leading clothing retailers left. It is therefore advisable to try to
are very skilled at getting consumers establish a clockwise customer flow,

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○
finishing with a service counter at ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
the entrance. Management Memo
The worst scenario is to place a
service counter in the major sight
line which creates a direct runway to Y ou create traffic flow in a layo
placement of cash registe
and fittings, aisle patterns and
ut by the
rs, fixtures
the checkout and reduces browse merchandise
displays.53
shopping considerably.

Bounce customers
3 around your store. design. Positive, appealing sightlines
Your aim should be to encourage will draw customers around your
movement of customers throughout store. Sightlines should use colour,
your entire store. The placement of
products or departments is the key to
doing this. Here’s how…
Review your customers’ shopping
lists—what are the most common
items purchased? It is these that you
should place at regular intervals
around the store. In this way you Counter
force customers to visit all parts of
the site. For example, consider the Critical sight lines throughout the store
strategic placement of the following
basic shopping list items—often lighting, and product effectively to
referred to as ‘anchor’ products: attract the customer throughout the
1. Milk 4. Toilet paper store.
2. Bread 5. Detergent
3. Sugar 6. Coffee Develop destination
5 departments.
Entice customers to various parts of
the store by developing and
strategically placing destination
departments in the corners of your
store and at the furthest points from
Counter
the entrance and exit. Promote these
departments and become famous for
them—The Power Tool Department
Maximise the use
4 of sight lines.
Sight lines are essential in all styles
(hardware store), The Seedling or
Bedding Plant Department (garden
centre), The Ski Department (sports
of layout, but are far more important clothes), The In-house Deli
in a boutique layout than in a grid (supermarket).

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FIRST IMPRESSIONS See also: 2, 16, 18, 24, 120

How to improve your


‘first impression’ image

In the eyes of the customer, perception is reality and your store’s


first-up image is important in this regard. Research shows that a
customer captures up to 70 per cent of a store’s image as a result
of those first impressions gained at that initial shopping
encounter—and those first impressions are absorbed within the first
ten seconds! Which is why retailers should take steps to ensure that
first impressions… quality impressions, are lasting impressions.

Understand the meaning Set your store’s


1 of ‘image’. 2 standards.
Bobby Gee encourages all retailers to
A leading authority on image, Bobbie
Gee of Bobbie Gee Enterprises in set standards in each of the above
California, has worked extensively areas and to ensure that all staff are
with many retailers throughout the familiar with them and abide by
world and has standards by which them.
customers can identify and judge a Standards are always set at the
company’s image. She claims that top by the management team. The
customers make their assessment on rest of the team will meet these
such factors as, in priority order: requirements, although few will
• Your team’s appearance excel them. This means you must set
your company's standards for
• First impressions of the store from
behaviour and dress code reasonably
outside
high. Remember, too, you and your
• First impressions of your displays team will often be judged outside of
• The quality of your product work hours as well as during trading
• The way your team approaches hours.
the consumer Do not put anything down to
chance when it comes to an
• Checkouts individual’s perceptions. You should
• Hygiene in your store aim to have a consistent image and
• The advertisements you use in the this can only be achieved through a
marketplace written, disseminated image policy.
• How you answer the telephone
Develop your own
• How you deal with complaints
• How you are perceived in the
3 image wheel.
Working on the principle that
community Image + Reputation = Profit
• Customers seeing your product is the key to a retailer’s success,
before they get to the display. Bobbie Gee in her workshops with

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119
Vol. 1: See 394, 396
Management Memo
retailers develops ‘the image
wheel’—if you want to influence the
way customers look at your business, E lephants do not bite, mosquitoes do. It is
not the big things that ruin us. It is the
little ones. That is definitely true of image. It
you will need to focus positively on
is all the little things we fail to give attention to
these areas:
that rob us of success. 54
Your self image
Product quality
Corporate communications five senses. Research tells us that
Training programs customers’ first impressions are
Customer relations gained through:
Development of standards Sight 83 %
Your recruitment practices Hearing 11 %
The emotional condition of your Smell 3.5 %
business Touch 1.5 %
How you get involved in community Taste 1 %
affairs • A customer’s first impression is
Your dependability gained in only ten seconds. The
Visual image customer may give you, the
Personal image retailer, a second chance. You will
The owner's ego. rarely get a third chance if you
don’t get it right!
Work from an image
4 checklist.
By reference to your policy
• Customers always remember
vividly the worst impression, not
the best impression. You, as a
standards, develop a checklist which retailer, always have to improve
focuses on different image issues on that worst first impression.
within your store. Refer to it on a Your challenge is to know what
daily basis. See ‘How to make a must be improved upon.
positive impression in ten seconds’
The key is to see and think like your
on page 18 for details.
customer. Put yourself in your
customer’s shoes. Through your own
Always see your store as
5 your customer sees it.
In terms of your store’s image,
senses, absorb what’s on offer as you
enter and move about your store
daily. What you note may not at first
always remember these three vital seem important in your eyes because
points: it’s all so familiar to you, but it may
• The impressions we gain from the well be a different image to a
world around us are based on our customer.

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LAST IMPRESSIONS See also: 2, 16, 18, 24, 118, 144

How to improve your


‘last impressions’ image

One of the most critical aspects of your business is what impresses


a customer upfront, immediately upon entering your store—their
‘first impressions’. Indeed, research shows that 70 per cent of
store impressions are first impressions. We also know that 20 per
cent of store impressions are ‘last impressions’—gained as the
customer leaves the premises. For this reason, it is important for
retailers to set image standards at the checkout and on the
customers’ journey to their cars…

Set standards that your


1 team can adhere to. 2 Make somebody
accountable.
You must set staff guidelines for last The key to success is to ensure
impressions, just as you should for someone is made accountable for
first impressions. Commit such standards of housekeeping at the
standards to print and produce a checkout. The accountable person
checklist so that you can monitor should check the counter on a
these requirements. Once you have regular basis during the day. If this
set standards, these become the area is neglected, you will find that
levels of quality that all the team clutter will accumulate around the
must consistently achieve. counter until the close of trade. For
There are a number of areas that the customer—these are last and
leave a lasting impression on lasting impressions!
consumers. Your ‘last impressions’
policy should address them… Ask customers what they
• Hygiene at the checkout
• The number of products you
3 want at the counter.
Customers, of course, require space
promote at the checkout
• Price strategy for products at the
at the checkout to handle the
checkout products they have purchased, but
• How customers are greeted at the may also have other needs. Have you
checkout ever surveyed your customers on
• How you add-on sell at the counter their checkout needs? Those retailers
• The visual appearance of your that have, found that people wanted:
business behind the register
• Appearance of staff • Aisles wide enough for wheelchairs
• Services offered at the checkout • Express lane checkouts
• How you provide extra services to • Alternative checkouts as full-
the disabled, the aged and parents service checkouts, e.g. wrap
with small children facilities, cheque writing facilities
• How you gift wrap • Some checkout points that don't
• How you bag fill
have magazines on display nearby.
• Cleanliness of the car park.

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121
Vol. 1: See 394, 396

• Checkouts where children’s


Management Memo
he two commandments for maintaining
products are not available—
especially confectionery. T your image are:
1. Remain true to your beliefs.They are re-
• Help in getting bulky items to their
cars. sponsible for the success you are now
enjoying.
2. Never sacrifice long-term image for short-
Promote one product
4 at the counter.
Every counter should have at least
term gain. 55

one product, and no more than three, Take advantage of their customer
at the counter that might be appeal. Place them in a sight line.
proactively promoted by a person at • Merchandise consistently: do not
the checkout. The key is to find a alternate. Customers only go
product that the majority of people through one checkout per visit.
want or need at that particular time. • Focus on your program, not your
We tend to underestimate the value fixtures. Think ‘Categories and
of the counter as a profit centre. Merchandising’ first— then select
fixtures that accommodate your
program.
Have a specific
5 management policy • Emphasis in-store maintenance.
Assign one person to the
at the counter. responsibility of maintaining the
Australian Supermarketing magazine checkout area.
provides the following guidelines:
• View the checkout as a separate Stress the need for
profit centre. Recognise it is one of
the more important departments in
6 consistent housekeeping
the store. at the counter.
• Use the ‘space to share’ method to It is critical that the checkout is kept
allocate space. Assign space to clean and tidy at all times, for last
categories based on their sales and impressions are lasting impressions.
profit contribution in a particular Accordingly:
season, e.g. chocolate bar sales • Do not store products at the
increase during cold weather and checkout.
therefore require more promotional
• Keep the checkout dusted every
space at this time.
day.
• Take full advantage of the sales • Do not clutter with coffee mugs,
potential of confectionery and litter or irrelevant products.
magazines which account for 78 per
• Never eat at the checkout or in view
cent of checkout volume.
of customers.
• Merchandise similar items together, • Never leave traded-in or returned
thus making it easier for your products sitting at the counter.
customers to locate what they are
looking for. So, for example, • Check counter three times daily.
position batteries next to battery- Image is the name of the game.
powered items. Every customer sees your checkouts.
• Put your best sellers in the best Be confident that they leave a good
locations within their categories. impression.

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STORE CLEANING See also: 118, 176, 240

How to keep your store clean

Stores such as McDonalds and the Disneyland enterprise


have built much of their reputations on cleanliness.
Customers judge retailers on how clean their stores are. The
key is not being clean—but consistently clean.

Commit your team worksheet displayed in the toilet


1 to cleanliness. area:
Your staff must be committed to Date Name of Time toilets Signature
cleaner checked of checker
keeping the store clean. Everyone
needs to be involved. Develop a
policy statement on the level of
cleanliness you require in the store
and ensure all staff know of their
responsibilities in this area.

Focus on critical areas. Walls


2
The role of the manager is to ensure
In food areas, walls should be
cleaned using hot water (above 60oC)
the aisles are free of clutter and litter, and a recommended detergent. Scrub
and safe at all times, and that the walls to remove any dirt, rinse the
displays are secure alongside the wall using warm clean water, before
aisles. Monitor also those other applying a sanitiser solution to areas
untidy troublespots—behind where food comes into contact with
counters, in corners, visible storage the wall. Leave this to react on the
areas, restrooms, the parking lot, wall for the recommended contact
corridors, and so on. In particular, time, and then rinse the wall again
the level of cleanliness is critical in and allow the wall to air dry.
those areas where food is involved.
Floors
Regularly check toilets, walls, floors,
Floors must be safe for customers to
working surfaces and windows…
walk on. Check daily for potential
Toilets hazards and slippery surfaces. As a
There are those customers who judge rule the floor should be cleaned each
a store on the cleanliness of its toilets. day when the store is closed. Food
To show the customer you care, areas should be cleaned according to
make sure you have a visible Food Safe Regulations.

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○ ○ ○ ○ ○ ○
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
Working surfaces
Again, these areas are critically Management Memo
important in food outlets, especially
esearch into cleaning programs car-
in areas where food is prepared.
A Cleaning and Sanitation R ried out in the United States revealed
the following:
Worksheet is essential in food outlets
and desirable in other forms of 97% of stores empty litter/trash bins
66% wash their windows once a week
retailing. An example of a typical 52% clean their toilets daily
worksheet is provided below from 49% mop their floors daily
the Johnson and Johnson Safety and 21% wax their floors once a month.
Hygiene Manual. The opportunity exists to impr ess the cus-
56
tomer with your clean lines s.
Windows
The first feature a customer sees is
usually the store windows and door. includes sweeping, vacuuming,
Who hasn’t been put off by mopping, and waxing relevant
floors, and washing windows and
fingerprints on windows and glass
emptying litter bins on a set rota.
door panels, and blow flies, moths
and other insects lying dead at the • Straighten displays every day and
walk the store to check on its safety.
base of the window? Check your
windows daily to ensure they create • Promote cleanliness in store
meetings and staff newsletters.
the correct first impression for
customers. • Repaint surfaces when the store
begins to look stale. This may mean
you may have to repaint your front
3 Implement a best
practice philosophy. •
door very frequently.
Keep floors dry and use non-skid
Make cleaning an accepted habit in mats. If you must clean when the
your retail store. Best practice means store is open then use caution signs
that you: to warn the customer.
• Have an established cleaning • Check that the outside of your store
schedule that is adhered to. This is safe and tidy.

CLEANING AND SANITATION WORKSHEET


Week commencing:
Thu Fri Sat Sun Required frequency
Location Mon Tues Wed
■ Daily
■ Weekly
Walls ■ Monthly
■ Daily
■ Weekly
Floors ■ Monthly
■ Daily
■ Weekly
Windows ▲ ▲ ■ Monthly

Insert name here. Insert signature here.

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FLOOR-WALKING See also: 12, 14, 16, 24, 26, 32, 44, 56

How to walk the floor


and talk to customers

The role of a retail manager can be compared with that of


a mâitre d’hôtel. You should meet the guests—your
customers, welcome them, and ensure they leave with
a positive feeling about your business. Retailers should set
aside at least one hour a day to walk the store and talk to
customers. It is the most under-used of skills, but one of
the most important and rewarding parts of the job…

Break the ice— happy to provide you with ideas on


1 and start talking. how you could improve service.
Many owners are reluctant to walk
the floor and to talk to customers Vary the time of day
because they find it difficult or get
embarrassed about starting a
3 you walk the store.
Owners traditionally walked the
conversation. store at opening time. This is still a
The simplest way to overcome strong tradition in Japan where
this problem is to take out a sample retailing continues to be a very
of products and ask customers to try formal arrangement. However, you
them. This is always a good will gain more from varying the time
discussion-starter and can easily lead of day that you do your rounds since
to other matters, such as what they you will more likely gather a more
think about your store or the service. disparate slice of customer views.
An alternative approach is to
meet customers where the action is—
try cleaning the tables in a restaurant
Share your findings
or working on bag filling at the
checkout—ideal locations for starting
4 with your team.
up a conversation. Your team will be interested in the
comments you have gathered. Make
sure they are aware of why you walk
Be open about
2 your intention.
the floor and be sure you talk to
them as you do so. This will relax
When walking the floor, be candid them and make them feel you are
about your mission—introduce part of their team. Remember also, if
yourself to customers as the owner your feedback warrants praise of
and that you’re seeking their views individual performances, do so in
about the store and its operation. public, but reprimand in private.
You’ll find that most of them are

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AISLES See also: 116, 238, 240

How to manage your aisles

The aisles are the areas of ‘pathway’ or floor space used by


customers to reach the products in your store. Customers
expect you to provide this access in a safe condition.

Make your aisles ensure that they are indeed safe.


1 customer-friendly. Check also the safety of the displays
alongside the aisles. Take steps to
The aim of the aisle is to facilitate
customer movement and to ensure your staff also know their
encourage customers to reach all responsibilities in terms of
departments and access all products maintaining clean and safe customer
in your store. The minimum width of passageways and that they do not
the aisle should be one metre, and it store products in the aisles during
should be kept clear of stock and trading hours.
clutter at all times, especially when
Maintain standards
shelf filling has to take place during
opening hours. 3 via a checklist.
Compile a checklist similar to the
Ensure your aisles sample below which focuses on aisle
2 are safe. safety. In your walks around the
store, regularly complete the
The role of the manager is to ensure
the aisles are free of clutter and safe checklist, and report your findings
at all times. Walk the aisles on a back to staff members:
regular basis during the day to

IMPROVING OUR CUSTOMER FLOW IN THE AISLES


Needs lots Needs some Looks good We've got
of work work it right

1. The aisles are well-defined.


2. The aisle width is correct.
3. We keep the aisles clear at all times.
4. Customers can visit all parts of the store.
5. Our side aisles are the right width.
6. We don't clutter the racetrack or aisles.
7. The floor is vacuumed/swept daily.
8. The racetrack and aisles are safe.

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126
DISPLAY SAFETY See also: 81, 82, 84, 90

How to make sure


your displays are safe

One of the common devices used by retailers to shift product is


the stand-alone display, built to catch the customer’s eye. Often,
however, the more eye-catching the display, the more risky it can
be in terms of customer safety. The last thing you want is a display
capable of collapsing if a shopping trolley or basket accidentally
hits it. As well, customers come in all shapes and sizes, so that you
need to ensure your displays are especially safe where the less-
able and children are involved.

Remember that safety Undertake regular


1 overrides cleverness. 3 safety checks.
Make sure you regularly and
A display may look clever, even
ingenious, but if it is not safe you methodically check your displays for
could end up, at best with a mess to safety—at minimum every morning
clean up, at worst with serious before the first customer arrives.
injury, or even legal action against Never leave unsafe displays in
the store. Be advised: safety is a position with customers around. It is
priority with store displays. your responsibility to provide a safe
working environment for your team,
Become a bricklayer. and a safe shopping experience for
2
When building displays using boxes
your customers.

or cartons of product, you should do Consider your own


so in the same way that a bricklayer
places bricks on top of each other.
4 safety.
Too often retail staff are seen
Bricks, like cartons, are overlapped standing on boxes and unsafe
so that each brick is securely bound structures to build displays. Health
to the next one. This gives extra and safety regulations demand that
strength to the total structure. Use safety steps or platforms be made
this principle when constructing available for team members to use
your product displays. and that they are advised as to why
such aids are made available.
CUSTOMER'S BOTTOM NEXT
VIEW LAYER LAYER

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TEXTURE See also: 100, 110, 164

How to introduce texture


into your displays

The majority of retailers rightly consider placement of


products, lighting, and what type of props they need when it
comes to building displays. Leading retailers, however,
consider all aspects—and one area that is never overlooked
is that of texture…

Know the impact linen, nobbly wools, and tweeds.


1 texture can create.
According to Terry Curry, Managing
And for a more natural look try
roughly sawn wood, mulch,
Director of Predictions in Victoria, sawdust, pebbles, gravel, sand,
Australia, texture in displays can be stone, brick, or ground up cork.
suggestive, reinforce the message
Match surface to the
you are trying to get across, create a
mood, help define the target market, 3 colour of your product.
impact on the colours you are using, Remember that smooth and shiny
and interact with your lighting surfaces will make the products look
system. Clearly, it's important when lighter as such surfaces reflect the
thinking about displays, to think light on to the displayed items.
texture. Rough surfaces will absorb the light
and make the products look heavier
Know what textures and darker.
2 to use for effect.
Allow your staff
If you want your display to be
feminine and sensuous, then silk and 4 to experiment.
satin are some of the best Textures change, as they are part of
background materials to use. If you fashion—for example, the ‘bamboo’
want your product to look expensive, look may be very much in vogue for
then velvet is one material that will a period and becomes a texture
provide this desired background commonly used throughout the
effect. entire industry. A year later, another
Many stores will require a texture will be in fashion. Allow your
masculine or outdoor feel to their team to experiment using different
product displays. In such cases, you textured materials.
should consider using burlap, course

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FOREWORDCONTENTS PREFACE TESTIMONIALS
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128
PRODUCT PLACEMENT See also: 116, 96

How to manage product placement


in your store

To maximise sales across the entire store, retailers must learn


to position products strategically. Placement is based on an
understanding of their classification. Products can be
grouped into a number of categories based on their
positioning in the store. Those categories include Known
Value, Non Known Value, Purpose, Browse, Impulse, Link,
Male/Female Products…

Be familiar with product customers’ shopping lists. They are


1 categories and how to the reason customers come to you.
Some purpose products will also be
place them in your store.
known value products.
Known value products. In a supermarket, for example,
These are products where the purpose products would include:
customer believes they know the
Tea Baked beans Bananas
exact price. Petrol, cigarettes, milk, Coffee Cornflakes Milk
and newspapers are typical known Lettuce Dog food Eggs
value products. If price is a major Tomatoes Toilet Paper Carrots
motivator for customers to visit your These products should be positioned
store, then known value products in the store in such a way that
should be placed in primary sight customers are forced to ‘bounce’
lines. If price is not your major around the entire store to encourage
drawcard, then place these products customer spending in other
in secondary sight lines, i.e. positions categories.
in the store that are not noticed when
the customer walks into your store.

Non known value products.


These are products where the ✖
majority of customers do not know
the exact price. They make their
primary buying decisions based on Counter

wants, quality, benefits, and service. ✖ 'Purpose products' positioned to bounce customers
If you are not a price-motivated around the store.
business, then you should be placing
non known value products in the Browse products.
sight line. Browse products are those items
where customers need time and
Purpose products. space to make a buying decision.
Purpose products are those on your Common browse products include:

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129
Books Herbs Management Memo
CDs and videos Power tools
etailers must convey the message they
Birthday cards
Seeds
Magazines
Paints
R intend. If you have chosen an upmarket
product range, your store must reflect this. It
Such products should ideally be must be clear to the customer who you are,
placed away from the major what you are selling, and in what price bracket
customer racetrack and in areas you operate. 57
where the customers can take their
time and have the space to browse-
shop. Aisles need to be larger around merchandised displays show the
browse products to ensure customers customer you understand their needs
feel comfortable while they are and care for them.
shopping, and are not jostled by Remember these key points
other shoppers. associated with link selling:
• Cross-merchandising should use a
Impulse products. minimum of two selected
These are the products that products.
customers do not plan to buy when • Cross-merchandised displays
they go shopping but can make up must have signage that clearly
60 per cent of a purchasing spend. links the products together.
To maximise sales, these products • Displays must be topical and
need to be placed in major sightlines. seasonal.
Due to the quantity of impulse items
• Whenever possible, price specials
most retailers stock, it is important to
should be linked to add-ons.
rotate impulse lines on a regular
basis to ensure all products are seen • Displays must be kept simple to
by customers and have a chance to ensure all customers understand
sell. and get the same message.
• Words used on cross-merchandised
Link products. displays should be positive (i.e.
Link or cross-merchandised products ‘Remember: you will also need…’,
are allied products and are ideal ‘Secrets of Success’…).
‘add-on’ sale items. Examples of this
Cross-merchandised products
category of merchandise include:
should increase sales by at least 30
Flim alongside cameras per cent.
Razor blades alongside razors
Video tapes alongside video players
Plants alongside pots Male or Female products.
Strawberries alongside cream Very strong female and male
Batteries alongside toys. categories should be clearly
In managing cross-merchandised separated. Males especially can get
products, you will often take two embarrassed if they find they have
products from different product strolled into a female department by
categories and place them on display mistake.
next to each other. Cross-

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130
VERTICAL MERCHANDISING See also: 132, 134, 140, 142

How to use vertical merchandising


to maximise your sales

Vertical merchandising is a form of shelf layout that


allows items to be displayed in product categories in
a vertical arrangement…

Display products for its superiority as a selling position is


1 maximum customer apparent from the following research
findings:
impact.
Customers like to get into a position Position Units sold
where they can view the entire range Stretch shelf 70
of a product category from one Sight-and-take shelf 100
Bend shelf 55
position. Vertical merchandising
Floor level 20
provides customers with that
opportunity… Research shows if you take the same
product at the same price and move
COFFEE TEA OTHER HOT DRINKS it vertically into the sight-and-take
▲ ▲ ▲ position, then sales can improve
dramatically.

Making vertical
2 merchandising work
for you.
Adherance to some basic rules can
▼ ▼ ▼ increase your sales through vertical
merchandising:
But, within the vertical presentation,
there are advantageous positions for • On the premise that you cannot
products. Research shows that the sell air, construct your shelving to
majority of products sell at a sight- provide the minimum gaps at the
and-take position. The sight-and-take sight-and-take level. Whenever
position is between chin and navel of you identify gaps, fill them as
the average-height shopper. The soon as possible or, if you do not
typical customer in most retail stores have adequate stock to fill the
is a woman, which means that the gaps, space the product evenly
sight-and-take position is between across the category. Leave no air.
150cm and 180cm from the floor, and • Topical and seasonal products

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○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
should be displayed at the sight-
and-take level—to sell them faster. Management Memo
• Display the most profitable sizes
t is vital for fixtures not only to be safe but
of specific products at the sight-
and-take level.
I also to look safe. Fixtures or displays that
look unsafe will deter customers from selec
t-
e or
• Purpose and best-seller products ing goods from them for fear of the fixtur
be
may need to be displayed on the goods falling. The fixtures should also
d in a safe cond ition. This inclu des
stretch and end shelves. maintaine
-
checking for sharp edges, cracked or dam
• If out-of-season products need to cular ly glass , and also for
aged shelves, parti 58
be displayed, then display them at loose or damaged supports.
floor level.

Break the rules to be positioned near the counter or


3 when you have to.
There are times when you will need
within a major sight line. Smaller
products are best located higher on
the shelf in a sight line and larger
to break the rules of vertical
items nearer the ground for easier
merchandising. Such instances
lifting.
include:
• Display products that say Adjust shelves
‘Caution. Keep out of the reach of
children’ at least 1.2 metres above
5 to maximise sales.
Slatwall shopfittings allow you to
ground level if they don't have adjust the shelving to the height you
child-proof caps. require to maximise sales.
• Bring children’s products down to The following example of a
their eye level. typical slatwall 'island' fixture allows
• Keep heavy products on the lower you to adjust shelving to suit product
shelves to facilitate safe lifting of size:
the product.

Be aware of security
4 and size of stock.
Security and size of stock must be
considered when positioning stock
on shelves. For example, in retailing
the greatest amount of stealing
occurs along cosmetic aisles in
supermarkets. These products need

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132
HORIZONTAL MERCHANDISING See also: 130, 134, 140, 142

How to use horizontal merchandising


to maximise your sales

Horizontal merchandising is a form of shelf layout that


allows products to be displayed in a horizontal
arrangement…

Be aware of the level due to its weight or unique


1 drawbacks of horizontal characteristics. Typical products that
are displayed horizontally include
layouts.
There are two obvious problems palletised items, indoor plants, large
associated with horizontal merchand- outdoor plants, bulky products, and
ising. The first is that the customer furniture.
has to walk along the gondola to see
Design horizontal systems
one range of product, do the same to
see the next range, and so on. 3 that sell.
As well, one product range will Progressive plant retailers have
be in a prime selling position while developed display tables for plant
others, positioned high up, or low material and their techniques may be
down on the shelving, are in adaptable for other retailer situations.
disadvantaged selling positions.
▲ ▲ ▲ ▲ ▲
▲ ▲ ▲ ▲ ▲

COFFEE

TEA

OTHER HOT
DRINKS

MORE HOT Hexagonal indoor plant tables make an


DRINKS attractive indoor plant display area.
OTHER
BEVERAGES

Know when to use


2 horizontal merchandising.
Horizontal merchandising is best
used when you have one product Slimline sloping display tables are ideal
that can only be displayed on one narrow units where space is at a premium.

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Management Memo
g fresh prod-
ome points on merchandisin
S uct, using horizontal merchand
niques:
ising tech-

layed in family
• Produce should be disp
groupings.
to maximise the
• Colours should be used
effect.
bench should be
Octagonal units are practical and • The level of fill along the
interesting displays for shrubs, alpines consistent and eve n.
d to ‘sell!’ the
or other merchandise according to • Price tickets should be use
season. They can be made with or product
materials create
without a point of sale ledge, irrigation- • Supplier point of sale
er informa-
carrying structure, and mesh interest and provide custom
windbreak. 59
tion.

If you build your own


merchandising tables, however,
remember the following points:
• Make the tops separate from the
legs if possible, so that the tables
can be displayed at varying
heights by using legs of different
height.
Traditional display carts feature an eye- • Ensure you provide a ledge for
catching style with spoked wheels and point of sale material.
canopy.
• If timber, use treated timber. If
metal, use galvanised material—
Consider the use of you want the table to last.
4 merchandising tables. • Do not make the table too large.
Every product should be within
Retailers can now purchase a variety
of horizontal merchandising tables, an arm's reach of the average-
made out of wood or galvanised height customer.
metal. They can be purchased as • Use materials that are easy to keep
ready-made items or to be assembled clean. The less maintenance
by the retailer. required the better.

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134
RELAY LAYOUTS See also: 130, 132, 140, 142

How to manage relays

Retailing requires that products be presented to customers in a way


that invites purchase. Products are usually arranged on shelves in
relays, where one category of product is displayed within its
grouping along the shelf (e.g. breakfast cereals). Experience and
skill are required to manage these relays and in presenting product
on the shelves in retail stores. The aim is to set up the shelf so that,
logically, it makes sense to the customer and, strategically, it
maximises the return per linear metre to the retailer…

Ensure logic dominates. filling shelves, and they look good.


1
The key to shelf management is to
Retailers can layout the block based
on gross profit return and have some
place products in categories that control over the customer flow.
make sense to the customer. The This layout allows the consumer
question is—what makes sense? For to price shop relatively easily and, if
example, you may place breakfast the retailer is out of stock, the shopper
cereals together and display is still able to choose similar products.
grapefruits in the fresh produce area. The disadvantages to the retailer
The customer may be purchasing for are that the customer price shops and
breakfast—and the placement of does less browse shopping. The
cereals with grapefruit could seem, consumer may find the layout boring
to the customer at least, a logical as all similar products are together,
category arrangement. and often misses new lines and
For this reason, before setting up alternative choices.
a category it is important, within
reason, to think like a customer— Consider like-by-like
which is why there are three
accepted styles of relay management
3 in a corporate block.
This style presents manufacturers in
used in retailing today… corporate blocks and then the like-
by-like layout is superimposed.
Consider like-by-like This system is easy for the retailer to
2 relays.
A like-by-like layout is where the
manage, looks good, and allows the
retailer to allocate specific space to a
retailer groups products together manufacturer. It is more difficult for
across the whole block. For example, the customer to price shop and the
all the ‘beef’ cat foods from different retailer’s image can be upgraded or
suppliers are placed next to each downgraded, depending on the
other, as are 'chicken', as are 'fish'. positioning of the manufacturer's
The adoption of like-by-like products, e.g. high gross profit items
relays saves time for retailers when displayed at ends of gondolas.

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These days, consumers are trained


Management Memo
into brand shopping so this layout
may be convenient for them. The
T here are four types of products within a
category. These can be classified as
impulse or opportunity goods, company and
opportunity also exists to highlight consumer image builders, convenience items,
products within a brand. The and consumer destination items. Consumers
disadvantage here is that customers and retailers perceive them differently: 60
may keep selecting a brand that has a Consumer Retailer
low return to the retailer and the Perception Perception
positioning of manufacturers means Opportunity Goods Low Low
Image Builders Low High
some get an excellent placing while
Convenience Products High Low
others miss out. Destination Products High High

Consider corporate
4 company blocking.
This is where the manufacturer
services that consumers perceive to
be inter-related’, e.g. breakfast
department, the bathroom, or patio
decides how their product will be
garden. When laying out a category,
displayed (often called ‘book and
consider the following:
order’ category management).
• Segmented share of each product
The advantage to the retailer is
within the category (% sales of bath
that the manufacturer will provide rugs versus shower caps)
the full merchandising kit and total • Trends within the category (colour,
professional backing by the supplier. style)
The consumer can easily find • Trends in your local marketplace
• Publicity and promotions for specific
promotional products and gets a
products, e.g. in lifestyle magazines
good feeling about the image of the read by your customers
store because of the professionalism • What you want to promote.
of the presentations.
Establish rules for product
The disadvantage is that the
retailer relies on the company
representative (some are excellent,
6 presentation.
Set a standard for presenting
others are variable). The products on shelves and ensure that
manufacturer or supplier has a all staff are aware of the need to be
monopoly on the position and if consistent in meeting these
retailers are not careful, they may guidelines. For example:
become overloaded with stock. • Position price tickets uniformly.
If manufacturers or suppliers are • Face all products the same way.
developing corporate company • Ensure all products are spotless.
blocks you may also find that as a • Keep the shelves clean.
• Remove damaged products
retailer your return is lower, as the immediately.
supplier will take a larger return. • Maintain all products within date
codes.
Focus on… when laying • Position all products correctly.
5 out a category.
• Leave no gaps visible along the shelf,
especially in the sightline.
A category is a ‘distinctive • Allow no gaps between shelves,
manageable group of products or especially in the sightline.

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FACING PRODUCT See also: 128, 132, 140

How to face products correctly

In relay merchandising, facing is the way products are


presented on the shelf to the customer by the retailer. The
aim of merchandising is to maximise sales per linear metre of
shelving and, for this reason, how well products are faced will
have a significant impact on sales and stockturn…

Face forward. Get the minimum length


1
Most products have a front and a
2 of facing correct.
If you wish to promote a product on
back. For a number of reasons, the shelf, the width of facing on that
products should always be faced shelf is critical and, in this regard,
labels to the front: two theories are currently in vogue:
Firstly, the manufacturer has gone Theory One: If you wish to sell a product
to a great deal of effort and research you must, as a minimum facing, have the
to ensure that the ‘face’ of the width of facing the same as the height of
product has ‘eye’ appeal. It has been the product.
designed to entice the prospective
buyer to pick up the item. This is your minimum facing
width on the shelf if you wish
Secondly, many products have the customer to see the product.
user instructions on the back of the
item. Prospective buyers need to
look at these instructions to make a
buying decision. If you face forward,
Theory Two: If you wish to sell a product
the reasoning is that the customers you must, as a minimum facing, present
have to pick the product up and three of the products if you want the
reverse it to read it—and once the prospective buyer to select it. UK research
product is in their hands, they are has shown that, if you drop the facing
more likely to put it in their basket or down to two or even one product, then
trolley than put it back on the shelf. its sales decline dramatically.
Finally, a uniform shelf looks
Get the maximum length
more pleasing to the eye and more
likely to be browse-shopped than a 3 of facing correct.
shelf that looks like it has been Research in the United States and the
stacked randomly and with little United Kingdom reveals that, with
thought. the majority of products, if the facing
And, of course, facing forward exceeds more than eleven identical
improves your store’s image. products on the shelf, the prospective

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buyer becomes suspicious, assumes


Management Memo
y. Adopt a
he key to facing is consistenc
you have bought incorrectly, or
something is wrong with the item, T facing system and
thing you can do is con
kee
fus e
p
you
to
r
it.
cus
The worst
tomers.61
certainly the product is not selling
very well—and the result is that sales
drop off. This theory of eleven
facings does not apply to products successful facing ratio, you can then
purchased every day (e.g. toilet draw up a plan for your faced
paper) or very topical promotional shelving on paper or computer. This
items (e.g. launch day for a smash is often called a planogram.
video like Titanic). However, remember that in
retailing what is correct today will
Vary facing when
4 appropriate.
Most retailers do not have enough
not necessarily be right tomorrow, so
you may have to keep changing your
facing ratios to maximise sales.
shelf space to put every product at a Facing ratios will change when:
minimum of three facings. The • you are in a seasonal industry sector
practical reality is that you may have such as gardening.
to utilise varied facings to maximise • consumer habits and fashions have
sales… changed.
Face fewer than three of a product • the media mentions products in a
when: positive or negative way.
• the product is out of season. • manufacturers and suppliers
undertake promotional campaigns.
• you are running down your stock
levels of that particular item. • you widen or narrow the range of
products you have on offer to the
• you wish to promote another product
consumer.
over this product.
• the life of the product on the shelf
• the item is out of fashion.
matures in relation to its shelf life.
• it is such a bulky item that it does not
need a facing of three to catch the eye
of a prospective buyer. Consider indenting.
Face more than three of a product 6
Indenting is the process where the
when:
• it is a trendy item. retailer physically removes a product
• the product is in season.
from the shelf to give the impression
that some customer has already
• the item is featuring in the media.
purchased an item from this range.
• it is being promoted by your store.
The theory is that, if the relay is
• suppliers are doing a major promotion.
depleted, then customers are more
confident to shop the range. In other
Compile planograms.
5
In the early days of facing it is very
words, indenting encourages
shoppability. The practice normally
involves removing one product, in a
much a trial-and-error exercise to get slow moving line, about every three
it right. Once you have settled on a metres along the length of the shelf.

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PRODUCT RANGE See also: 98, 108, 174

How to manage your product range

One of the most challenging areas of retail management is


dealing successfully with the product range. The most
profitable businesses understand the market and select
a range of products to meet the demands of their customer
base. Given that four out of five buying decisions are made
in the store, it is important for retailers to get their range
right…

Understand the meaning The majority of companies tend to


1 of range.
Product range is usually considered
get the width right, and even if the
category is wrong, it is usually
in terms of ‘width’ and ‘depth’ of identified very quickly in most
products held in your business. businesses.
Width is the number of categories When things go wrong, the
held by your particular retail store. problems normally relate to the
For example, in a menswear shop, depth of the product range, and it
your width may cover: often takes longer to identify where
Shirts Trousers Suits this problem is.
Ties Sweaters Underwear If depth has become a concern,
Socks Jackets Shoes. ask if you have become too shallow
Depth covers how deep you deal or too deep. As a general rule you
within each category. Depth covers should be deep in your core range
areas such as: and shallow in allied products.
Brands Colours Price Points For example, if a garden centre is
Number of Sizes Number of Styles. well regarded for selling plants, it
If your width were shirts, your depth should be deep in the plant species it
would include: sells, the sizes it sells, the varieties,
and so on. An allied product handled
Makes of shirts stocked
Colours of shirts stocked by such a garden centre would be
Price points stocked slug and snail control. In this retail
Styles of shirts stocked sector, this item is a companion
Patterns of shirts. product and not the core product—
and the customers prefer you to be
Know how to manage shallow in this area, i.e. they do not
2 your range.
The challenge for retail managers
want depth in slug and snail control
items; they want the one you believe
relates to stock rotation and to be the best for doing the job. The
identifying when things are going customer would also expect your
right or wrong with the range. team to promote this specific product.

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Always be prepared
3 to change.
Retailing is a changing industry—it
Management Memo
changes with seasons, fashions,
events in the calendar, and trends. W hether or not you decide to stock
certain products depends on the cur-
rent thinking of your customer base. Remem-
Your range needs to change with
ber…
customer habits. Accept that as a fact
of retailing life. A fad is something that is in vogue for a few
weeks. Fads may be based on the latest film,
pop star, television program, or news item.
Keep your range
4 performance under
A fashion lasts about two years. The clothing
industry survives on fashion and changes in
review. the way we accept colours and cuts, how we
Successful retailers analyse their dress ourselves and decorate our homes.
range constantly to make sure they A trend develops over a decade. Trends
are in tune with customer could include changes in home construction
requirements. and furnishing, gardening and landscaping,
Various approaches may be taken and social habits. 62
to such analysis. Some retailers
analyse stockturn rates, or sales per
square metre, gross margins, or stock If they are, monitor how well it is
levels, and so on. selling.
Whichever system you use, the
• Have a ‘Requests Book’ to monitor
key is to reduce the space demanded
whether your customers are
by products that are not performing
asking for the product.
and to increase the space for those
that are performing. • Consider whether the new
product will add a fresh
Be prepared to bring dimension to your width and
5 a new product into depth. If it does, you may need to
consider deleting a slow moving
your range. item from your existing range to
The challenge for many retailers is
accommodate the new product,
how to introduce a new product into
otherwise you could run out of
the range. Some guidelines for
space.
introducing a new product include:
• Ask relevant questions:
• Talk to competitors, colleagues,
• Is the price competitive in your
and suppliers, and read trade marketplace?
magazines and product reviews so • Has the product a proven track
that you are fully advised of what record?
is happening in the marketplace • How will the supplier be promoting
and what new products are the product?
available or in demand. • What sales backup is the supplier
• Shop the competition and see if offering with the product?
they are selling the new product. • Will it create more profit for you?

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BEST SELLERS See also: 96, 128, 156, 157

How to get the most


out of best sellers

Each product category in your store has a best seller. The product
will not necessarily be the cheapest or lowest gross profit item, but
it will be the favourite product purchased by your customers in
that category. You can use the best seller concept to your
advantage if you introduce some simple management
strategies…

Identify your best sellers Customers need to see your best


1 in each category.
To take advantage of the best seller
sellers, and shelftalkers will help you
achieve this. Use your prime selling
concept, you'll need to know the best positions for impulse sales.
seller in each category. For some
categories, for example, beer, the Have your team promote
best-selling product will probably
stay the same throughout the year.
3 the best sellers.
Hilary Kahn, the Melbourne-based
For other products, such as fruit in retail consultant, suggests you can
a greengrocers, the best seller will increase your bottom line by getting
change with the seasons and you your team to recommend the best
would need to analyse your sales sellers…
results on a monthly basis. Compile best seller lists for staff.
If yours is a large store with many
Position best sellers
2 strategically in the
categories, prepare a list of best
sellers each month and make it
category layout. available to all team members. This
Do not use the prime location in the gives them the extra confidence and
category layout for best sellers the opportunity to sell in categories
because they will sell anyway. Put other than their own.
your best sellers in what would Train the team to sell best sellers.
normally be a lower selling position When customers are unsure about
in the layout. They will help you what product to select within a
increase sales in the overall category. category, get your team to promote
Gondola End Gondola End best sellers as one of their selling
options. A great selling opener is
Impulse Impulse always ‘Our best seller is …’. It will
products products
Best Sellers give the customer confidence in the
salesperson as it shows they have
knowledge of the products.

Customer flow

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141
Vol. 1: See 198

One outcome of this is customers


Management Memo
start to trust your team member and
will then readily accept that person’s B est selling strategies work brilliantly in
some retail sectors and are under-used
in others.
advice. The book and record industries have used
Train your team to sell up. this technique for many years with merchan-
In many situations customers will dising strategies that show the Top 10.
purchase the best seller simply on a I recently worked with a retail client where
team member's advice—or allow the we introduced the best selling strategy for the
first time. Prior to my visit they were unaware
team member to sell up to one of the of which products were their best sellers.
store's more profitable lines. Once we introduced the strategy and used
shelftalkers, their sales of best sellers in-
Educate your customers.
4
Consumers like to buy best sellers. If
creased four-fold.
What was even more interesting was that
the overall sales within the category also
increased. I believe this was due to the con-
they do not know a product category
sumer gaining more confidence and trust in
very well, they are happy to the retailer. 63
purchase best sellers since, when
they are unsure, they seek comfort in
conforming.
Use shelftalkers or general point Match promotions
of purchase signage to highlight best
sellers. Such signage could say:
5 with fact.
When introducing a best selling
‘Our best selling x this month is…’ strategy, make sure your advertising,
‘Our best seller!’ internal promotions, and sales team
‘The top selling y in our store’ are giving the same message to the
‘Our customers' favourite z’. customer.
The important thing is that you are
honest with your customer.

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SLOW-MOVERS See also: 78, 81, 82, 92, 96

How to manage
slow-moving products

Slow-moving products are often called ‘dogs’. They are those


items that just will not sell. Leave them on the shelf and they
move out of date code, or become unfashionable, or just
gather dust. You must become proactive in shifting slow-movers
or they will eat into your bottom line…

Identify your slow-movers going to perform to the customers’


1 in each category. expectations, then it should be taken
off the shelf and recorded as
Every product category has slow
movers, where the stockturn is shrinkage to the business.
slower than planned. It is important On the other hand, if the product
for retailers to identify slow-movers still has some value to the customer,
because: then consider the following actions:
• in the food industry, they could cause • Move the item to another location and
food poisoning when they move out monitor its sales. Perhaps the product
of date code. is fine, but the location was wrong.
• in the perishable non-food industry, • Promote it using signage or, if it is
they could cost you more money to already promoted with signage,
maintain their shelf life than to throw change the signage. It may be the sign
away. is sending out the wrong signals.
• they become dusty and reflect poorly • Alter its price. The customer may
on your store’s image. perceive the item as being too cheap
• they could become dated or old- or too expensive. We often reduce the
fashioned, giving the customer the price when we should have increased
perception that you are not keeping it. So, try changing the price and
up with trends in your industry monitor what happens.
sector. • Promote the product to your loyal
customers as an extra benefit.
• they will affect your overall bottom
line if you do not sell them. • Try selling two for the price of one.
• they may become unstable or will not • Promote it to someone interested in
do the job they were intended for. This that product range; for example, if you
is common where chemicals are have stamp albums that do not sell,
involved. promote them to existing customers
who you know collect stamps.
• Gift the product to customers who
Manage your existing spend over a certain amount of money
2 slow-movers.
Once you have identified your slow-
with you.
• Place the item in a dump bin—but for
a limited time only.
movers, it’s time to take action. • Offer the product to people collecting
If in any way the product is not items for charity.

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143
Vol. 1: 198, 340

• If none of those work, take it off the


Management Memo
shelf and replace it with a money-
making product. Y ou might think best selling categories would
sell in poor locations. In my experience
stores who have tested this by putting best
selling categories in poor locations decimated
Manage your products
3 so you no longer
unit sales, and changes were soon made to put
the best sellers back into the best positions. 64
have slow-movers.
Every product has a birthday. Your strategy might be supported in the
objective is to make sure no product following way:
celebrates a birthday in your store!
The first five weeks of the cycle
Compile a product life cycle strategy. should be based on merchandising
Plan a ‘product life cycle’ strategy for considerations:
your store (see below) and take steps • Change the location of the product in
to ensure that products listed are the store.
sold within the stated time frames. • Change the signage.
• Change the display style.
Make buyers responsible for slow - • Check the product knowledge of the
movers. team.
The critical person in this strategy is Hopefully those initiatives will start
the store buyer. A buyer’s role is to moving the product.
make three basic decisions: If those actions prove ineffective,
How many products should be then the second half of the product
bought?
life cycle should focus on financial
What retail price will we set?
What will be the stockturn of this decisions:
product? • Put the price up.
• Sell two for the price of one.
For example, for Product x • Reduce your gross profit.
Units purchased: 100 • As a last resort, sell at cost.
Retail selling price: $10
If any product is left on the last day
Product x life cycle: 10 weeks
of the final week, remove it from the
On the basis of such considerations, shelves to make way for more
the buyer passes the details on to the profitable lines.
merchandiser who then manages the
sale of the product. The merchan- Empower people to
diser’s objective is to have no
product from this buying cycle in
5 make decisions.
Retail stores have ‘dogs’ on shelves
stock on the last day of the tenth because management is sometimes
week. By implementing a realistic reluctant to empower their category
product life cycle strategy you supervisors to make decisions on
should eliminate most slow-movers. moving the product. We should care
less for the product itself and more
Actively support
4 your life cycle strategy.
To prevent a product continuing as a
about managing the product. Our
objective must be to maximise sales
per square metre. To achieve this,
slow-mover, or to turn around its your team must be made responsible
sluggish sales, your life cycle and given responsibility.

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COUNTER DISPLAYS See also: 56, 120

How to manage counter displays

The counter or checkout area is a key position in any retail store. It’s
a location visited by every customer. Unwisely, many retailers look
on this facility as the final port of call for a customer who has
already decided on a purchase and sees the counter as a position
where the only operation that needs to take place is the transfer of
money. But the counter also provides an opportunity to sell and
reinforce your store's image…

See the counter • Seasonal


1 as a profit centre.
Look at the counter as a department
• Topical
• An ideal tie-in product to the majority
of purchases
in its own right. Indeed, see it as a • An impulse line for the majority of
profit centre, an ideal location for customers
selling since every customer who has • Small
• Inexpensive, something customers can
purchased products will come to this purchase with their change.
location. For this reason, the counter
The more of these criteria your
presents a great opportunity to sell
selected product covers, the more
another item or two.
sales you will make. In petrol
stations, chocolate bars have become
Select the right products
2 for the counter.
the favoured counter product. In
supermarkets, it is often magazines.
Research carried out in the United
States has shown that, if the correct Train the team to sell
product is displayed and promoted
at the counter, sales can increase by
3 counter products.
Train your team to see the counter
as much as 40 per cent. The key to
area as more than simply a place to
selling, as always, is to display the
take customer’s money. Encourage
right product, in the right place, at
them to start a conversation and to
the right time, at the right price.
promote the product on display. The
The mistake is to try to sell too
style of conversation will vary
many products from the counter.
depending on the product or
You will overwhelm the customer if
situation, but examples could be:
you display more than three items.
‘Have you seen our new…? They arrived
Some stores have considerable today, just in time for Christmas.’
success by limiting the customer’s
‘Those seedling plants are a lovely
focus to one carefully selected choice. Do you have any snail control?
product. With the weather getting warmer,
Selecting the right product is the you’ll need it to keep them looking at
challenge. It should probably be: their best.’

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‘Have you stocked up on… yet? They’re


Management Memo
on special at only 60 cents at the
moment.’ T he checkout is an area where team
members need to be positive with every
customer. Aim to reduce team member stress
Melbourne-based Hilary Kahn of
Kahn Retail Solutions conducts a by providing, if necessary:
• carpet on the floor
workshop called 'Expanding the
• seating
Sale', an ideal program to improve • a heater
selling skills using the above • regular breaks
techniques at the checkout. • job rotation. 65

Do not clutter
4 the counter. calendars, notes to staff, schedules,
The biggest mistake made by many memoranda, price checks, and other
retailers is that they forget about the irrelevant pieces of paper.
importance of image at the counter.
Over 20 per cent of customers will Make somebody
remember, as a lasting impression,
the counter area above all else in your
6 accountable.
Put someone in charge of the counter
store. For that reason alone, it must
and make them responsible for
be kept uncluttered, clean, and tidy.
keeping the counter display well
Keep your prime counter display
stocked and the counter area tidy.
well stocked, with a neat ‘reminder’
While we all tend to be guilty of
sign on it to encourage customers to
messing up counters, one person
make that last purchase. The sign
should be responsible for monitoring
could use such words as:
counter cleanliness. Do a daily check
‘Remember, only… days to Christmas';
‘St Valentines Day is February 14th.
to ensure that the behind-the-counter
Remember your loved one with a few area is kept clean and tidy.
chocolate hearts’; ‘New'; ‘We recommend
…’; ‘Don’t forget…’ Introduce housekeeping

Look past
7 regulations at your

5 the counter.
Retailers usually get the image right
checkout.
Remember, last impressions count.
It is critical that the checkout is kept
on the counter, but forget what's clean and tidy at all times. Therefore:
behind the checkout personnel. • Check the housekeeping standards at
Customers look in the opposite least three times a day.
direction to your sales team and • Keep the checkout dusted every day.
often the sales team are blind to the • Do not clutter with coffee mugs, litter
clutter the customer sees when or irrelevant products.
facing the counter. • Never eat at the checkout or in the
Have a company policy which view of customers.
says the only messages behind the • Never leave returned /exchanged
counter that are visible to the products sitting at the counter.
customer are those that are relevant • Give the customer space on the
to the customer. Take down those counter to pack and rest purchases.

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SUPPLIER STANDS See also: 84, 92, 108

How to manage stands


provided by suppliers

To help them maximise potential sales in a retail establishment,


many suppliers will provide stands for the specific purpose of
promoting their product. In return for the retailer’s goodwill and
assistance in selling the product, the supplier is able to offer
a range of advantages to the retailer. But what is needed is
a genuine win-win partnership between the retailer and supplier
on how these stands should be used…

Consider the Promotional assistance is often available.


1 opportunities. Promotional assistance can come in a
number of forms, including new
By working in partnership with
suppliers who provide display product allowances, display
stands for their product, the retailer allowances, advertising allowances,
is able to take advantage of the group funding, demonstrators, or PA
situation in a variety of ways: promotions.
Large suppliers can link mass media Some suppliers may offer financial
promotions with the retailer. assistance.
The stand could well be part of a Major suppliers may be prepared to
large marketing campaign. The pay for shop fittings on the
retailer can then be seen by the understanding that their product
consumer to be ‘on the ball’ and to be would be in a prime position. They
networking with the supplier to might also offer a loan lease
provide a professional image for the agreement or extended credit.
product. Other benefits. Many companies also
Your supplier may take responsibility supply sales training, merchandising
to maintain the stands. programs, sales literature, and
Some suppliers are prepared to consultancy.
manage the stand, or shop space, on
behalf of the retailer. This includes Seek protection.
refurbishing the stock on display. 2
Discounts and allowances Prior to working with a supplier you
can be negotiated. may need to agree on some form of
Discounts and allowances that can be protection for you as a retailer. This
negotiated may include discounts can come in the form of written
based on target sales, free product, agreement, return allowances,
shipping to store paid by the reorder guarantees, rebates,
supplier, trade deals, or seasonal exclusive agreements, and resale
discounts. price management programs.

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Choose an appropriate
Management Memo
3 position for the stand.
Every supplier wants the prime
I n the United States, researchers Arthur
Andersen asked retailers what they looked
for, in order of priority, when seeking a ven-
position in your store. Your dor. Their response was:
challenge is to negotiate a location to Responsive to my specific needs
their satisfaction and, in so doing, to Committed—will follow through
increase your overall sales per square Flexible
metre. On-time service and delivery
As a general guide, suppliers who Has integrity and honesty
provide stands in excess of 1.5 Good communicator. 66
metres high should have them
positioned against a wall, preferably
along the customer racetrack.
Stands below 1.5m high may be used Look on the relationship as a
in central areas of the store, long-term partnership with both
preferably in the product category players equally involved in
area. promoting the product strongly to
Stands supplied must be in the benefit of both parties.
keeping with the image of your store.
For example, you might resist using Monitor the performance
a stand that clashes dramatically
with your colour scheme.
5 of supplier stands.
The prime objective of a supplier
stand is to sell more products than
Develop a win-win
4 relationship.
Be fair to the supplier. The majority
would be sold if that item were
displayed on one of your store's
standard merchandising units. As a
of suppliers spend a great deal of retailer your role is to measure the
research, time and money in performance of the product on the
developing stands for their product. stand and to compare its sales results
You, as retailer, should therefore with past records. If sales have not
respect this and only use the stand markedly improved, then you
for the relevant products provided should advise the supplier and
by that supplier. return the stand.

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PERISHABLES See also: 132

How to manage perishable products

Many customers prefer one store over another because of


the freshness of its products. This is particularly so in the case
of florists, greengrocers, butchers, fishmongers, delicatessens,
bakeries, and garden centres. If you must deal in products for
which freshness is important, then the following advice will
prove invaluable…

Be constantly vigilant in certificates in full view of shoppers.


1 maintaining standards.
Monitor the shrinkage.
Customers find it difficult to
compare company images on non
perishable items. Perishable items
3
Profits can easily be eroded in
are another matter altogether. If the perishable departments via
department looks good and the shrinkage—the difference between
product looks fresh, then the actual sales and projected sales. Loss
customer invariably assumes all the can be due to a number of reasons:
products you sell are of a similar • Faulty storage temperature
condition. The reverse also applies. • Waste disposal records not kept up-to-
date
• Staff/customers eating the profits
Adhere to food hygiene
2 standards.
• Bad cutting procedures resulting in
high wastage
• Unacceptable stockturn/stock rotation
For fresh foods, hygiene is critically
important. Regulations may vary • Lack of care for product, e.g.watering
of plants
from place to place, but as manager
• Poor handling, e.g. bruising of fruit
you must ensure that your store • Poor hygiene procedures
abides by the food hygiene code as it • Lack of staff training
applies to your business. • Crisping/Trimming procedures with
Set specific quality standards for vegetables
perishable products and do not • Arrangement construction, e.g. by
florists
deviate from them. If quality • Inappropriate adding-value costing
deteriorates, you should not reduce procedures
the price or you’ll be reducing your • Inefficient interdepartment transfer
reputation for freshness as well. You procedures.
are far better to remove from your
Understand the needs
shelves the deteriorating product
and retain your image for quality.
4 of customers.
To give assurance of quality to Customers tend to want more
customers, display food hygiene written information about perishable

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149
Management Memo
products than for other items. They
want to know, for example, how to
keep it fresh, cook it, eat it, plant it, S ome technicians dealing with fresh prod-
ucts believe they are better than their
equivalents in other areas. They often justify
or arrange it. Fresh food is often
this by saying they have had to dedicate a lot
purchased for health reasons. more time to training than people in the same
Consumers want to know about the position in other departments. This is often
vitamin levels, what are the health true and needs to be taken into considera-
benefits of the produce, and how tion, but what you must not do is turn them
best to cook the produce to retain into prima donnas. This will result in a less
those benefits. Are the staff than happy team and an overall decline in
team morale. 67
responsible for your perishable
products fully briefed in such areas?

Remember: managers image. As examples, consider these


5 are managers.
Certain specialist retail sectors
strategies:
• Adopt a ‘farm shop’ merchandising
theme, creating the feeling that the
employ skilled technicians—such as product has come straight from the
the florist, baker, horticulturist, field. This is accomplished through the
butcher—to deliver expertise to the use of canopies and rustic farm
consumer. Such businesses also equipment.
require managerial expertise—often • Install lighting above certain products,
a skill that does not reside in the including meat and vegetables, to
enhance the appeal of such items to the
trade ‘expert’.
customer.
Retail managers sometimes leave
• Publicise a merchandising policy where
the management of specialist you, as a retailer, sell out of fresh
departments to the skilled produce before the store closes for the
technicians, fearing they lack the day. Around closing time, the customer
technical expertise themselves. Even sees empty shelves—and shelves full of
if they do lack the technical expertise, fresh produce the next day.
this relinquishment of management • Consumers possess strong visual
responsibility is a major mistake and images of what a butcher, gardener,
baker, greengrocer, or fishmonger
often results in a poorly operated looks like. To maintain this image, the
department and a technician who dress code of individuals working
has lost all respect for the manager as within the perishable produce sector
a manager. Managers of stores must becomes an important consideration.
play as active role in specialist One useful idea is to provide
technicians with the look of the trade
departments as in any other. (e.g. the butcher in blue and white
stripes)—reinforcing the impression
Foster an image that the person is skilled,
6 for freshness. knowledgeable in this area, and giving
added assurance to the customer
Retailers use various techniques to seeking a guarantee of freshness and
portray to customers a 'freshness' quality.

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SHOPPING TROLLEYS See also: 16, 18, 22, 24, 118, 120

How to manage shopping trolleys

Shopping trolleys have been designed for reasons other than just
carrying products—they’ve been designed to carry more products!
In their evolution over the years, the base of the trolley has become
larger, because researchers have found that a larger based trolley
results in an increase in the average sale per customer. Customers
spend more as they are enticed to put more products in the trolley
to cover its base. Shopping trolleys are an essential item in
supermarkets and it’s important to manage their use effectively…

Be aware: the trolley is • ensure trolleys are in a safe location


1 a customer's first contact.
Often the first exposure a customer
and retrieved regularly from car
parks.
• collect trolleys, in batches of ten,
gets to your business is your
using special straps—not occy straps.
shopping trolleys. They expect them
• clean trolleys at the end of the day
to be in the right location, readily
before storing them in a secure
available, and clean. And, of course, location overnight.
they must work properly—there is
• welcome and farewell customers to
nothing that draws more frustrated and from your business. In this
criticism from a customer than a regard they should be recruited
trolley with a ‘will of its own’. because they can make eye contact,
smile, and have the confidence to
Train your trolley verbally greet and farewell the
2 assistants.
customer.
• look professional. Provide them with
Many companies employ young
a staff uniform, even safety
people to manage their trolleys. They waistcoats, rain gear, hats and
are key personnel, because, for most sunscreen for use when required.
customers, these people are the first
and the last ambassadors to
Include trolley assistants
represent your business during the
shopping encounter. Often they are 3 in the team.
ill equipped to do the job. They Too often trolley assistants are not
should be recruited as trolley considered to be part of the team. If
assistants and greeters—and trained this is a practice in your business,
accordingly. you will find that in time the service
The role of a trolley assistant is to: they offer customers will decline. By
• ensure trolleys are kept clean. involving them in team meetings, in
• keep trolleys well maintained. This sales training along with the rest of
involves daily checking of the your staff, you could discover
equipment and, for this, they should untapped potential, talent which can
have a tool kit and oil available. be applied elsewhere in the business.

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Select a trolley
4 suited to your needs. Management Memo
Supermarket trolleys have been
designed for a wide range of S hopping baskets also need to be lo-
cated around the store. These handy
baskets are often stolen and need to be
purposes—as the following selection, replaced, although a client of mine found
available to customers of the UK that, when he introduced red baskets, his
hardware supermarket retailer, pilferage rate decreased.
Sainsburys Homebase, indicates: And in the war against vanishing shop-
ping trolleys, a new UK magnetic device, the
Radlock, attached to trolleys, jams the wheels
Small wire basket trolley when a trolley crosses a magnetic strip encir-
cling supermarket carparks. 68
Designed to carry:
• small DIY articles
Children are not to ride
in or on the trolley.
Tubular frame trolley
Designed to carry:
Wire basket trolley • furniture, board, fencing
with toddler seat • trellis, doors, worktops
Designed to carry: • sheet materials
• packets • timber, plasterboard
• bottles Children are not to ride
• tins in or on the trolley.
One child to ride only in seat
provided.
Wheelbarrow trolley
Designed to carry:
Disabled trolley attachment • terracotta pots
Designed to carry: • peat, compost
• packets • outdoor ornamentation
• bottles Children are not to ride
• tins on the trolley.
Wheelchair users only.
DIY trolley
Flatbed trolley Basket:
Designed to carry: • packets, bottles, tins
• slabs, bricks,cement Side section:
• aggregates, plaster, peat • mops, brooms, parasols
• compost, heavy bagged Base:
materials to 250kg max. • peat, compost
Children are not to ride Children are not to ride
on the trolley. on the trolley.

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152
SIGNS See also: 78, 156, 157

How to write signs that sell

Research carried out in the United States by LEK Partnership in the


early 1990s showed the value of signage in the retail trade. When
products had no signage they were monitored at a base of 100
units sold per week. When handwritten signs were provided, they
sold 170 units a week and, when printed signs were used, sales
increased to 265 units a week. Signs are an essential ingredient in
any merchandising strategy…

Delegate the preparation quality and therefore can be used for


1 of signs to one person.
Signs can be handwritten, or printed
non price-sensitive lines.

Have your staff trained


inhouse using computer software
programs, or outsourced to signage
specialists. If your policy is to
4 in the art.
If you prefer to display handwritten
handwrite signs for your store, then signs, send your staff signwriter to a
you must insist on consistency in the workshop on ‘one brush’ signwriting.
way they look. You can achieve this The course will provide instruction
by delegating the signwriting to one on the basic skills needed to produce
person who can then ensure a more professional-looking signs.
uniformity in writing style.
Catch your customer’s

2 Use lower case to


promote your product.
5 eye.
The average customer spends 1.4
Use capital letters sparingly. Resist seconds looking at each product in
the temptation to write messages in your store. The aim of signage is to
capital letters, although a single make the eye linger longer.
word in capitals is acceptable, e.g. According to a customer buying
NEW! or SPECIAL. Your reader will habits survey conducted in 1995 by
find a lower case message, in serif the Point of Purchase Advertising
type style if composed on computer, Institute, 70 per cent of brand
far easier to read than one in capitals. purchase decisions are made in the
store—and 42 per cent of all brand
Use colours that create decisions are made when point of
3 impact.
Colour attracts attention. We’re told
purchase signage is present.

Promote products
that red is associated with savings
and therefore red price ticketing will
give the perception of a bargain.
6 not signs.
Often a sign can be so dominant that
Dark green gives the perception of all the customer sees is the sign and
Just about Everything a Retail Manager Needs to Know
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153
Vol. 1: See 66

no product. Remember, the aim of a


Management Memo
sign is to draw your customer’s The power of signs
attention to the product you are ■ Running a business without making ef-
promoting, not to assume the centre fective use of signs is the same thing as a
stage spotlight. The product must be young fellow winking at a girl in the dark. He
knows what he’s doing, but she doesn’t.
the focus; the sign points the way.
■ A New York bookstore, going out of
business, had this sign in its window: ‘Words
Use words that sell.
7
In compiling a sign’s message,
failed us’. 69

always use words that increase sales G Guarantee, get, glamour, great, gold,
by increasing your customer’s give
H Health, happy, heart, heaven, help,
interest. Such attention-gaining
home, 'how to', hurry, honour, hot,
words include: hope, honest
At last Attention I Introducing, intelligent, invention,
Check out these Exclusive invite, innovate, incredible, interest,
Finally For the first time improve, immediate, important, instant
Good news Huge savings J Join, jewel, jumbo, joy, just arrived,
Hurry In a class by itself juicy
It's here New K Know, key, king, keep, knowledge,
New low price Now you can kind
Save big State of the art L Love, land, liberty, luxury, look, last
Switch to… Take a look at these chance, life, lasting, listen, learn
The smart choice Urgent M Money, magic, more, maximum,
It’s all here for you at… minute, modern, miracle, most, mind,
Back by popular demand mine, many
For those who insist on the best N New, now, need, nude, nice, neat,
Only… can give you… never before
Reasons why you should… O Opportunity, occult, open, on,
Take the… challenge original, occasion, own
The… advantage P Proven, power, positive, promote,
Quality does not have to cost you. protect, payoff, pro, pleasure, profit,
performance
Use positive words to sell Q Quality, quick, quiet
products. Donald Caudill from the R Results, respect, revive, right, rich,
University of North Alabama revolutionary, remarkable, record
suggests using power words from S Save, safe, sale, satisfaction, self,
service, sensational, special, smile,
his ‘Power Word Alphabet’: super, startling, secret, suddenly
A Action, accomplish, ahead, anybody, T Today, take, taste, thanks, time, true,
achieve, answer, announcing, try, total, tempting, think, trust
amazing, at last U Urgent, unique, understand, ultimate,
B Benefit, best, bible, big, bargain useful
C Can, calm, care, career, clean, comfort, V Victory, vitamin, vacation, VIP, value,
challenge, compare, cash, control valour, volume
D Discover, deliver, destiny, definite, W Win, wise, wanted, worth, willing,
dynamite, decide wow, which, when, why, who else,
E Easy, earn, effective, efficient, wonderful
entertain, extra, exciting X Xanadu, Xavier, x-ray, X
F Free, famous, full, fancy, fun, future, Y You, your, yes, young, youth
facts, friends, fast, found Z Zest, zodiac, zip, zenith, zeal, zero

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SIGNS See also: 78, 152, 156, 157

How to manage signs in your store

Signage needs to look fresh and professional. Indeed, a well


presented sign could be considered as an extra salesperson in
your store. Unfortunately, many stores do not realise the sales
opportunities that signs can offer, with the result that signs are
often managed quite inappropriately. To take full advantage of
signage in your store, consider this advice…

Reflect on the size Be consistent.


1 of your signs. 3
The appearance of your signs does
While the size of a sign is important,
you must remember that your much for your store’s image. To
products are more important. Signs maintain or raise your image,
are only selling devices and their size delegate the responsibility for
will vary depending on their position preparing your signs to one person,
in the store. Gondolas and relay particularly if your signs are
management positions, for example, handwritten. Consistency is
need smaller signs, end caps larger important.
signs, and large free-standing
displays can use larger signs again. Calculate the costs of
As a guide, use 25mm x 88mm signs
for relay management positions,
4 producing your signs.
Handwritten signage is expensive. A
90mm x 120mm signs for end caps, typical sign (product name, price and
and up to 1000mm x 750mm for three benefits) takes about six
island displays. minutes to produce. In other words,
a typical person, when writing non
Select the correct
2 typeface for your signs.
Typeface is important. It should vary
known value product signs can
produce about ten an hour. Known
value signs can be produced faster,
in style—for example, hardware about twenty an hour, as benefits
products are promoted using a bold don't need to be listed. With these
type face, while a softer, lighter type figures, you can calculate the cost in
face is used with expensive products labour to produce handwritten signs
for women. It should vary for for your store. Compare that with the
legibility—lower case is often easier cost of using computer-based signage
to read than capitals, and, if your systems—some of which can create 40
customer base is getting older, you signs an hour—and you are then in a
may need to use larger print to help position to explore the possibility of
shoppers with fading eyesight. reducing your costs considerably.

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155
Management Memo
Develop a policy
5 on vendor signage.
Suppliers are often keen to place
The power of signs
■ Sign in the window of a vacant store: ‘We
their signs around your store, often undersold everyone’.
at the expense of your image. Their ■ Sign on the window of a men’s clothing
signage should be part of a planned store that was forced to close after three
program and linked only to product months in business: ‘Opened by mistake’. 70
promotions. Make it clear to these
suppliers that you have a policy on
signage—if you haven’t, get one. It is below, as proposed by Sonja Larsen
your store, not the supplier’s, and you in Signs that Sell, should help.
should be in complete control of
signage on your premises. Review your signage

Always review your signs


7 strategy every year.
The technology of signage changes
6 once a week.
Store walks should concentrate on
rapidly and recent innovations could
mean you are soon out of date. You
signage at least once a week. Develop should therefore review your entire
a checklist for your store tour and signage strategy once a year and
produce an action list as a result of decide how you wish to develop
your weekly findings. The checklist your silent salesperson in the future.

WEEKLY SIGNAGE REVIEW CHECKLIST


ACTIVITY GOOD IDEAS PROBLEMS
Review this week’s sale signing
Are all advertised items signed? (list)
■ Do any advertised items have traditional problems, such
as always needing two sides for back-to-back signing etc.?
■ Are all advertised items easy to locate?
■ Are there problems with customers confusing sale merchandise
with adjacent non-sale merchandise?
Review general signing policies
■ Are there any out-of-date signs still up?
■ Are there enough signs, per agreement, per fixture, gondola, etc.?
■ Are there too many signs in any area? Too few?
Review general sign quality issues
■ Are signs consistent—legible and neat?
■ Are the benefits well presented?
■ Do the signs, in general, enhance the appearance of the store?
Review trend signing
■ Is what’s new proudly out in front for the customers to see
and is it properly signed?
■ Are there any trends without signs?
■ Does the customer understand the trend?
■ Review any problems identified by store managers and associates.
■ Communicate this checklist to buyers and sign personnel.
■ Check sign department and store to make sure proper signing
has been prepared and sent.

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KNOWN VALUE SIGNS See also: 78, 128, 154, 157

How to write a known value sign

Known value signs are used on products where it is


assumed the consumer knows the price—and if your
store varies from the expected price, you will be
perceived as too expensive or too cheap. The price of
petrol is a good example. In other words, the product is
a basic item, a ‘price sensitive’ product, and as such
warrants your special attention as a retailer…

Know the impact of your cross through it. This is far more
1 known value products.
Common known value (KV)
effective than giving percentage
savings.
products include petrol, cigarettes, KV signs work if you apply
newspapers, toilet paper, lettuce, the KISS principle—
sugar, milk, bread, and bananas.
KV products can be used to give the
Bananas Keep It Simple, Sells.

public a price image of your store. If


your products, within the KV range, $1.25
are more expensive than those in
your competitor’s store, you will be go
Store lo
perceived as being more expensive
across your whole stock range. If
your KVs are cheaper, the reverse
view will be true. Keep your KV signs

Keep your KV signs


3 large—and sell.
2 simple—and sell.
Put the price in larger print, and
invariably the customer perceives the
product as being cheaper, even if it
With KV products, your objective is
to maximise sales. The key to doing isn't.
this is to keep things simple. In
essence, all you need with a true Get your KVs upfront.
known value product is:
• the name of the product
4
Try to limit your KV products to a
• the price of the product. minimum of a dozen in your store.
The product name should be at the And if you want to foster an image of
top of the sign and the price in the being price aware in the eyes of your
centre. If you wish to show monetary customer, then put your KV products
saving, then write the old price in the in your store’s primary location.
right hand side of the sign and then

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YOUR CUSTOMER YOUR BUSINESS
YOUR STORE THE PRODUCTS 157
NON KNOWN VALUE SIGNS See also: 78, 128, 156

How to write a non known value sign

Non known value products are those where the average


consumer is not at all sure what the exact price for the
product should be. Usually their decision to buy is based
on more than simply price. Signage is a key to selling
non known value products…

Identify customers' products you sell. The majority of us


1 needs and wants.
Prior to writing a non known value
need memory joggers to encourage
us to purchase. Your listing of
sign, you should identify the key customer benefits can become their
benefits to the consumer. The best memory joggers.
approach is to brainstorm your ideas But, in doing this, many retailers
amongst a small group within your make their signs far too complicated.
team and then identify the three key Keep it simple. For example, to get
benefits that you believe are the most benefits across to your customers,
important to the customer. bullet points prove most effective:

Design a sign that sells.


2
Research by Sonia Larsen in the
Chrysanthemums
• Ideal Autumn garden colour
United States and by Hilary Kahn of • Can be grown indoors or
outdoors
Kahn Retail Solutions in Melbourne,
• Come in fashionable colours
has identified that the customer
needs to know, in sequence, what the
product is, the three key benefits, the $1.50
price, and finally a motivator to buy. Ideal to decorate your home
Design your sign with these
details in mind. Again, keep it
simple. If you give your consumers
too much information, they will get Check all your signs
confused, even discouraged, and the
sale opportunity will be lost.
4 regularly.
Signs reflect your image. You need to
monitor the appearance and
Make bullet points
3 do the job.
effectiveness of your signs on a
regular basis, and the checklist on
Do not assume your customers know page 155 will help in this regard.
as much as you do about the

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SIGNS See also: 156, 157

How to use signs effectively

Since the introduction of the self-service concept into retailing,


the application of promotional aids for point of purchase sales
has increased greatly among retailers. Research by the US
Skaggs Institute has revealed that a price-only sign increases
sales when compared with no signage, but price-plus-benefit
signage is the most effective. The evidence suggests that
effective signage can become a silent salesperson and can
have a dramatic effect on your average sale per customer…

Write effective signs. Adhere to the rules of


1
Signage should change in style
2 product signage.
Although writing signs is an art,
depending on whether the item anyone can write one—provided
being promoted is a known value or they abide by a dozen simple rules:
a non known value product. 1. Be specific in what you want to
Signs for known value products— say to your customer.
well used items usually purchased
2. Make the price easy to
on price alone—need to be simple to
understand.
be effective:
3. Sell the romance and sizzle.
Hawaiian 4. Write facts, not fiction.

Name of Product

Pineapples 5. Don’t state the obvious.


6. Explain what is not obvious.
$3.45 7. Help the customer buy the best

Price of Product
product.
8. Help the customer comparison
Signs for non known value products shop.
are most effective if prepared with 9. Remind customers of logical
the focus being price-plus-benefits… needs.
10.Always state what they will save.
Pre-shaped

Name of Product 11.Stay positive and sign-friendly.


Hamburgers
12. Break the above rules—if it fits
•Perfect bun size
your strategy.
•Easy storage

The 3 benefits
•Fast defrost &
Adhere to the rules of
microwave
6 for $2.50
3 store promotion signage.

Price of Product
While signage can be used to
Great for BBQs!

Closing motivator
promote products, it can also
Just about Everything a Retail Manager Needs to Know
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promote your business. Again, Management Memo
follow some simple rules to ensure
you use signs to promote your
business effectively:
W hen writing company procedure
signage always write it in customer-
friendly language. Examples of positive signs
1. When you have something to say include:
about your business, say so ■ If you bring bags, parcels and prams
into
through your signage. the store we know you will understand we
2. Promote the services your are obliged to check their contents when
you leave.
business provides.
Thank you.
3. If you have a strong policy
■ If you are lucky enough to look as thou
statement, repeat it a number of gh
you could be younger than 18, you will
times. The prime example is a understand that we are legally obliged to
prominently displayed sign in a ask to see your ID before selling you
Stew Leonards’ store, Connecticut, alcohol/cigarettes.
in the United States: Thank you for your co-operation. 71
Rule 1: The customer is always right.
Rule 2: If the customer is ever wrong,
re-read Rule 1.
For example:
4. Place services signs in the relevant Velcro T Stands—normally steel
merchandise category stands fitted with velcro hooks on
departments. both sides.
5. Use signage to ask for customer Chrome ticket holders—usually
feedback. adjustable stands with hooks to
6. Promote store activities and accommodate signs with holes in
occasions, prior to the events, via them.
signage. Clear acrylic hanger signs—ideal for
7. When changes are taking place in eye level merchandising.
the store, always apologise for any Basket grip stands —for attaching to
inconvenience to the customer via display baskets.
signage.
Velcro hook and loop fasteners—ideal
8. Make sure permanent signs for relay management and to
always look professional. prevent your team using staples or
9. Your signs are part of your public sticky tape to put signs up.
image. Make sure you look on
them in that way.
Rotate your signs

Invest in a complete
5 regularly.
4 signage package.
Signs should be placed next to the
items you are promoting. As a
To be effective and to look general rule, sign about 10 per cent
professional, you need a complete of the stock in your store and then
signage system in place, not just rotate the signs on a regular basis to
scattered signs. Sign display systems ensure that, over time, you expose all
are available in a variety of styles. your products to the customer.

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MUSIC See also: 18

How to use background music


in your store

Background music can influence the mood and spending habits


of retail customers. Store silence can be unsettling for many. It can
be embarrassing. Music is increasingly being used in retail stores to
overcome this problem. Retailers have also found that music can
enhance sales—and, if incorrectly chosen, that it can also drive
customers away. To take full advantage of background music in
your store, consider the following points…

Be convinced— • US research shows that sales increase


1 music matters.
Research studies have revealed that
by 38 per cent when music is slowed
from 108 beats per minute to 60 beats
per minute.
the playing of background music in
retail stores can have a sigificant
Play music to relax
effect on sales:
• Research in British supermarkets
2 your customers.
shows an 18 per cent increase in sales Relaxation music is now widely
when the music from familiar available and is ideal background
television advertisements was played music for the majority of retailers who
in the store. want to lull customers into a
• Leicester University researchers found spending mood. The key word is
that when French accordion music was background, however. Whatever
played, Gallic wine and cheese outsold
German varieties. When German music you select, it must be in the
oompah bands were played the background and not overwhelm the
situation was reversed. shopper in your store.
• Sydney University research in 1999 Play music when the store is
found that: quiet. When you are busy, your
• Only about one-third of shoppers customers may be making so much
are aware of the music wafting noise that you may find you do not
down the supermarket aisles. need any background music at all.
• All are encouraged to undo purse
strings or ‘linger longer’ by the
Tailor the tune to the
tempo and style of tunes.
• The faster the music, the faster
3 tastes of your customers.
Do not play music simply because
people moved down the aisle.
• More money was spent when your staff like it. Play music your
slower music played. Indeed, nine customers like. This may mean that
weeks of slow music yielded an you play different types of music at
average $16,740 in daily sales in different times of the day or week.
supermarkets, compared with
$12,112 for fast music—a 38.2 per For example, if you have retired
cent difference. people as your main shopper group

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161
Management Memo
on Thursday mornings, you will
Where words fail, music speaks.
need to play nostalgic '40s and '50s
music, not '90s music. When the baby —Hans Christian Andersen
boomers shop, play Elvis Presley
tunes. If you have a young customer those whom we dislike, you will find
base on Saturday mornings, then you are bound to upset some
play contemporary music. customers. Play it safe and use only
music in the background unless it’s a
Experiment to find
4 your solution.
special season such as Christmas.

Taste in music is, of course, linked to Play music to suit


type of music. Australian research
has shown that, in a bottle shop or
6 the season.
During traditional festivals, play
liquor store, for example, different music that is associated with these
shopping behaviour resulted when festivals. In these cases singing is
different music was played. People acceptable. The festivals that come to
bought more expensive bottles when mind include Christmas, St
classical music was playing—they Valentine's Day, and Mother's Day.
moved from the $8 bottles to, say, the In a garden centre at bulb time, you
$15 bottles—than when Top 40 tunes might play ‘Tulips from Amsterdam’.
were on offer. Classier music
generated classier purchases. Remember: tempo
Banks found that classical music
and instrumental jazz encouraged a
7 counts.
And get the beat right. Slower music
sense of trust and seriousness in doesn’t force people to buy more, but
customers, and music retailers found it can make them linger longer. The
that bass-heavy music with broad music you play should have the
appeal made customers more willing same beat as a pulse beat. In
sales targets. hardware stores and supermarkets,
Experiment in your store to music with fewer than 60 beats per
determine what’s best for you—even minute—roughly the tempo of an
consider other sounds. The sound of average ballad—is recommended.
water, for example, can be an
alternative to consider. For many Do it properly,
years, a fashion shop has successfully
used a water feature in one corner of
8 and legally.
If you choose to make music part of
the store to focus attention, to break your retailing environment, quality
the silence, and to soothe customers. counts. Invest in good quality audio
equipment, and you will reap the
Feature music—
5 not singing.
rewards.
Finally, in many countries around
If you use background music with the world you need a licence before
singing, you will find that customers you can play recorded music in
will start relating to the singer. Since public. Check your local regulations
we all have artists we enjoy and to ensure you are abiding by the law.

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AROMA See also: 18, 160

How to use aroma in your store

The aroma of freshly baked bread, the smell of freshly ground


coffee, the sweet fragrances of cut flowers —these are the
naturally occurring store aromas that attract customers. But
no longer is it just the smells you sell that create sales. Today
aromatherapy—the practice of generating artificial
aromas—is becoming big business. Retailers are increasingly
employing organisations to create smells for their stores in the
hope of attracting customers and increasing sales…

Identify the aromas products near the entrance, for


1 in your store.
Your store must smell attractive to
example, locate your cut flower
display near the door.
your customers. Customers find the • Use a pipe system and channel a
aroma of bread, coffee and flowers positive store aroma to the
appealing while they find the odour entrance; for example, the smell of
of fertilisers, fish and manures bread in the bakery.
generally offensive. Undertake a • Purchase perfume making
‘smell audit’ in your store—only machines and small cartridges of
then will you be able to build on the oil. These machines warm the oil
positive and reduce the negative. and pump it out into the store…

Position negative aromas


2 away from customers. 4 Consider the advantages
of artificial aromas.
Products with negative odours need We are told that artificially generated
to be carefully located. For example, aromas can:
fertilisers and manures may need to
be merchandised outdoors or at least • enhance your store’s image
in a roomy and airy part of your through the creation of a
shop. Alternatively, you may wish to ‘signature’ aroma, which sends a
install an extractor fan in the vicinity strong message to your customers
to ensure they associate that
of such products.
aroma with your store.
Position positive aromas • increase browse shopping.
3 at the entrance. • promote a particular product.
• heighten customer perception of
The location of positive aromas at the
entrance of your store can be the quality of a product.
achieved by using one of three • lessen, in the customer’s mind at
methods: least, the time spent in a queue.
• Position the more positive aroma • trigger impulse buying.

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• build an image of quality,
freshness, dependability, vivacity, Management Memo
or sophistication.
The sweet smell of success
Research by Dr Susan Knako of arden plants wholesalers have started
the Marell Chemical Senses Centre in
the United States shows that
G producing scented labels so that cus-
tomers can smell the flowers when the plant
customers will browse longer if a is in the garden centre, but not in flower.
store has a positive aroma. In fashion Japanese tyre manufacturers are placing
shops, she found rosewood, lavender scent in the rubber compound of tyres. As the
tyres wear down, they release the smell of
and vanilla aromas increased sales.
roses! 72
Men and women stayed longer in
jewellery shops where there was a
fruity, floral aroma. She found a
positive aroma encouraged his premises, the manager of a
customers to feel more items—and timber-flooring retail store in
the more they felt, the more products Sydney, for example, located beside
they purchased. a busy inner city road, uses woody
fragrances including pine, cedar and
Investigate the use eucalyptus to combat outside car
5 of artificial aromas fumes—and to get up the nose of his
competitors at the same time.
in your store.
If you have a natural smell in your
Do not overdo
store—coffee, scents, baking bread
etc, then let that permeate your 6 the aroma.
premises. However, if your business While the pulling power of fragrance
is ‘on the nose’ for some reason, it is becoming the latest retailing tool
may pay to investigate the use of for getting customers to part with
artificial aromas. their cash, the Centre for
Australian aroma marketing Chemosensory Research in Sydney
specialists Ecomist offer over 180 cautions retailers to curb their
different fragrances ranging from enthusiasm.
freshly cut grass, to steak and onions, Director Graham Bell warns: ‘You
to roses. The aromas are dispensed don’t want customers thinking
from small wall units programmed they’re walking into a brick wall of
to spray at regular intervals to create odour the moment they walk into
a pleasant smelling environment for your store. The fragrance must be
customers to shop in. subliminal, almost below the level of
To enhance the environment of awareness to have most effect.’

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COLOUR See also: 166, 168

How to make best use of colour


for effective merchandising displays

The focus of all the merchandise planning in your store should


be your product and your product displays must be designed
to attract customers. Well-planned lighting and thoughtful
use of colour will make these displays more effective, and in
turn will create more sales…

Attract the eye Create points


1 of your customer.
To attract the attention of your
2 of interest.
Whenever possible, displays should
customer, your merchandise displays be built with strong primary colours
should form a series of focal points as points of interest, then contrasted
throughout your store. The displays against cool, subtle hues for the back-
are your focus areas, and the goods ground. This contrasting of colours
are the primary features. Displays makes the displays stand out and
and product should always be clean, attract the attention of the customer.
fresh, bright, well-lit, with a blueprint When choosing colours, always
for merchandising and colour usage test the colour samples in the light
carefully shaped in advance. and in the environment in which
The colour of your merchandise is they will be seen. Light colours can
the fixed element in your planning appear more intense on a wall, and
and, for this reason, colour selection the hue can vary depending on the
for your displays should be based on light source, so an on-site test of
the colour of the merchandise itself. colour suitability is essential.
Where the merchandise is one
If your products lack impact in
dominant colour, then the
form or colour, such as reading
background colour for the display
glasses in an optometrist’s store, then
should either contrast or
a bright primary colour as a back-
complement your merchandise.
ground to the display will highlight
Where your merchandise colour
an otherwise uninspiring product.
varies, and a number of individual
displays are called for, then the
Use contrasts of colour
overall surrounds in your store should
be a neutral colour. In this case, colour 3 and form.
If you have dark objects in your
emphasis will be added to the
immediate background of the displays, then display them against
displays, again to contrast with or to light objects to make them stand out.
complement the colour of merchand- If your products are in warm colours,
ise in those individual displays. then set them against a background

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of cool colours to add emphasis to other on the wheel, or tints and
the product. The secret is in the shades of the same colour, are called
contrast between merchandise and harmonious colours. Used together,
your props. these are more relaxing and subtle in
If you use form in your displays, their effects, and are useful if you
such as a cart, or a rickshaw, then want your customers to slow down
surround the form with space. The and spend more time in your store.
way to highlight form is to surround
it by unfilled space—do not give it a
backdrop, just space. This works
particularly well in window displays.

Aim at variety.
4
Aim at variety in your displays, but
take care not to overdo it. Use texture
in your displays, for example wood,
hessian, stone, rope, or straw, to
create contrast and interest. This
texture can sometimes be provided
by the merchandise itself. THE COLOUR WHEEL
Y = yellow, O = orange, R = red
V = violet, B = blue, G = green
Create a buying mood.
5
Your aim in building merchandise
The colour triangle below reveals
that, when white is added to a full
displays is to provide points of
colour, a tint is achieved. When black
interest and attraction through the
is added to a full colour, a shade is
skilful use of colour and form, to
achieved.
create presentations that your
customers comprehend and can white

relate to. Your ultimate goal is to


create the ambience that will put tint
your customers in the buying mood.
colour
Know how a colour
6 wheel works.
tone grey

If you use colours that lie opposite shade


each other on the accompanying
colour wheel (they're called
black
complementary colours), you can THE COLOUR TRIANGLE
create a dramatic effect, because each
colour makes its partner appear
Ref: E. Danger, Using Colour to Sell, Gower,
more intense. Complementary
London, 1968.
colours are excellent in
merchandising displays. This topic was written by Linda Stanley,
Colours that lie adjacent to each John Stanley Associates, Perth, WA.

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COLOUR See also: 164, 168

How to make best use of colour


for the store exterior

Colour is an emotional factor and a psychological tool that


can be used to help create an ideal retail environment. Used
wisely, colour can attract customers into your store; used
carelessly and it can repel would-be shoppers. The external
appearance of your store—and colour plays an important role
here—should be in harmony with the type of product or
service you sell, and the environment…

Use colour appropriate since working class people are


1 to your trade.
Your store exterior is your
generally attracted by these. If you
have a large ethnic group within
advertisement to passers-by. Make it your customer base, ascertain what
clear to the passing public what it is their traditional cultural colour
you sell, and choose colours that are preferences are, and consider how
appropriate to your product or you can use those colours to the best
service. If you are in baby goods, retail advantage. Choose colours that
then paint your store in pastels— will attract your typical customer.
racing green and checkered flags
Promote your company
would be inappropriate. To decorate
your store in this way would not
communicate to the passing motorist
3 image.
Your company image may be the
that you are a baby goods retailer, no determining factor for the exterior
matter how much you love motor colour of your store. Choose hues
racing in your private life. that are appropriate for your image.
For example, one shade of green may
Identify, then market to, scream out to the passing public that
2 your customer base. your store is down market and cheap,
while another shade may subtly say
Determine who your typical
customer is—age, gender, race, class, that you are upmarket and expensive.
religion, and interests. Choose The secret is in the hue, and the
colours preferred by that market. If perception differs from culture to
your customer base is primarily culture as to what that hue
elderly, choose subtle colour tones, symbolises. Use of Harrods Green,
such as pastels, as elderly people Navy Blue, and Royal Purple may
prefer subtle colours; if they are indicate a conservative, traditional,
sophisticated, use high fashion, or even up market store in Britain.
sophisticated colours; if your However, in another culture, those
customer base is working class, then colours may indicate a down market,
you can use louder, primary colours, old fashioned, or poor taste store.

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167
In most western countries, hot
Management Memo
primary colours, such as red, Hot Colours refer to the red, orange and
indicate activity, or fast service. This yellow hues. They are called hot colours
because they stimulate the autonomic nerv-
is why most fast food outlets in the
ous system, increase blood pressure and
west use a large amount of red in heart rate.
their company colours—consider
Cool colours refer to the blue, green and
Kentucky Fried Chicken, Pizza Hut, violet hues. They are called cool colours
and McDonald’s. Freshness in the because they have a calming effect on the
west is often symbolised by a bright autonomic nervous system, decreasing blood
green, symbolising countryside. pressure and heart rate.73
Woolworths vegetable departments
in Australia are an excellent example
Use colour to highlight
of this belief. The company's
vegetable departments are a strong
5 architectural features.
Use harmonious combinations of
green colour which, along with very
carefully placed lighting, accentuates colour to highlight any attractive
the freshness of the products. architectural features your store may
Carefully consider what your have. If the building and these
image is, then choose colours that features relate to a specific historical
will portray and enhance that image. era, use a blend of colours appropriate
to that era to detail the features. If the
features are unattractive, then a
Harmonise with your
4 local environment.
single, pale, cool, colour painted over
the whole area will help to send the
If your store is in an historic street or features into the background. Cool
setting, then maintain that heritage colours visually recede.
image on your store exterior. Choose
traditional colour harmonies that are Ensure the store exterior
appropriate to that era in history.
Painting the walls in psychedelic
6 sends the right message.
In the retail store, colour is often
colours, for example, will not only limited to the facia which usually
offend your customers, but your promotes a company colour, name
store will be completely out of step and logo. In many stores this is the
with the environment. only visual panel available to attract
If your store is in an ultra modern shoppers, so plan it carefully to
shopping block, maintain that ultra ensure it is giving the right message.
modern image. If your store is a If company colours are not used on
country store, keep the country the facia, then a hot colour would
image, and maintain the harmony of gain maximum attention.
your surrounds. Your customers Facades can be in the company
choose to live where they do because colour also, the same as the facia.
their environment appeals to them, Alternatively, use a neutral colour to
whether that be ultra modern, harmonise with the local culture.
country, forest, or heritage. Keep
your customer happy. Harmonise This topic was written by Linda Stanley,
with your environment. John Stanley Associates, Perth, WA.

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COLOUR See also: 164, 166

How to make the best use of colour


for the store interior

First impressions are vitally important in attracting your customers’


attention and, once attracted, in holding their focus, and
encouraging browse shopping. Your store must first be inviting to
enter, must create points of interest to encourage the customer
to look around, and must stimulate customers to buy. In other
words, your store must be designed to give to the product or
service you sell a strong visual impact and appeal—and colour
plays a major role in this regard…

Use colour appropriate Keep the focus on your


1 to your trade.
It is vital that customers be put at
3 merchandise.
The background colours in the store
ease in your store. Soft floral colours set the stage for your merchandise
may make male customers in an displays. If your merchandise is one
automotive business feel basic colour, then the store’s internal
uncomfortable, but would be decor can be chosen to complement
expected by customers in a florist that colour. A complementary colour
shop. Badly designed interiors can is the opposite colour on the colour
confuse customers, and leave them wheel.
unsure of exactly what it is that you If the colour of your merchandise
sell. is varied, then individual displays
are necessary. In this case, the overall
Use colour appropriate surrounding colour in the store
2 to your customer.
Determine the race, gender, age,
should be a neutral hue with colour
added to the immediate background
religion, income bracket of your of each display. Your customers’
typical customer and use colours attention should always be focused
appropriate to that market whenever on the merchandise and never be
suitable. Children love bright distracted by the surroundings—
primary colours so, if your primary after all, it is the product that you are
target market is children, then paint wanting customers to buy.
your store in bright primary colours
Use colour to create the
to excite these customers. If your
market is primarily men, use 4 atmosphere.
masculine colours; if your market is Bright, hot colours (red, orange,
women then use feminine colours. yellow hues) are stimulating to the
The emotional comfort of your nervous system. They encourage
customers is an important activity, so they are often used in fast
consideration, and colour is an food outlets and children’s stores.
emotional tool. Use it thoughtfully. Cool colours (blue, green, violet

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169
Management Memo
hues) increase mental concentration
and calm the nervous system. They Warm colours
are appropriate colours for doctors’ • make an area look smaller
• bring forward distant walls
surgeries, schools, and for • reduce visual size in lofty areas
background contrast in • are cheerful in cool or cloudy regions
merchandising displays. Light, clear, • are advisable in long narrow areas
warm hues create a welcoming • work well in areas where there is little
atmosphere, and are suitable for natural light
restaurants and other meeting places. • provide a welcoming atmosphere.
Cool colours
Keep your image fresh • make an area look larger
5 with in-vogue colours.
• add distance, cool colours recede
• give a cooling effect in warm areas
The colours that your customers are • are good for contrast in the background of
painting their homes reflect the displays
current colour fashions in your area. • work well in first aid rooms
74
These fashion colours produce • create a calming effect.
positive emotional responses in
shoppers and create a stimulating
environment that inspires customers colour combinations are more
effective than others.
to buy. If you require a particular
• For expert advice on colour
colour for practical purposes, then combinations, consult Colour Image
choose a variation of that hue which Scale by Shigenobu Kobayashi,
is currently in vogue. This will keep published by Kodansha International.
your store and your merchandise • Alternatively, seek the assistance of an
looking up-to-date and fresh in the interior decorator, or your local paint
customers’ eyes. store.
• You can also get a lot of ideas on
colour combinations from the many
Make colours welcome
6 your customers.
‘home beautiful’ type of magazines
available.
Consider the following points:
• Use colours and lighting that flatter Contrast architectural
your customers’ appearance. Warm
colours in medium tones are both
welcoming and flattering to your
7 features.
Make the most of any attractive
customer. architectural features inside your
• Avoid very light colours as they can store. Use contrasting hues to add
create glare and excessive brightness emphasis and interest to these
which is harsh and uncomfortable on
the eye.
aspects. Don’t highlight ugly
features, however. Instead, use one
• Consider the customers’ comfort, and
welcome them with warm colours. cool light colour to make the features
• Avoid using a single colour
visually recede.
throughout the store. It can be boring.
Colour harmonies are much more This topic was written by Linda Stanley,
inviting and friendly, and certain John Stanley Associates, Perth, WA.

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Managing
your Business
The person who has had a bull by the tail once
has learned 60 or 70 times as much
as the person who hasn't.
Mark Twain

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STRATEGY See also: 2, 174

How to develop
a retail business strategy

As a successful retailer, you need to work ‘in’ your business to


generate a return on your investment today and to work ‘on’
your business to ensure that you generate a return on your
investment in the future. This means it is critical that you take
time to stand back from the business, to analyse it
objectively, and to develop a plan for the future…

Do a SWOT analysis Identify your weaknesses.


1 on your business. 3
In identifying your weaknesses you
Most consultants will tell you that it
is critical to examine your business at need objective answers to the
least once a year by carrying out a following questions:
SWOT analysis—where you explore • What areas of our business
your strengths, weaknesses, operation provide the most
opportunities and threats. The ‘think frequent complaints?
tank’ process should be undertaken • In what situation are we most
away from the workplace so that you vulnerable as a retail operation?
are not distracted by the day-to-day • What products or processes
operations of business, and with the provide the most problems?
assistance of up to half a dozen key • What products or processes bring
team members… in the lowest returns?

Identify your strengths.


2
The first step is to clearly identify the
4 Analyse your
opportunities.
Once you decide on what your
strengths of your business. As a strengths and weaknesses are, you
group provide answers to the can then start planning your future
following questions: direction. Again, start with the
• What do we do really well? positive and look at the
• What sector of our retailing adds opportunities that might be available
most to the bottom line? to you by answering the following
• What are the areas of our business questions:
where we outperform our • What opportunities exist to
competition? improve the internal running of
• What parts of our retailing our retail business?
endorse how customers perceive • What current marketing
us with positive recognition? opportunities should we exploit?

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173
Vol. 1: See 280, 282, 284, 286
Management Memo
• What changes are taking place
that are external to our business,
that will allow us to operate more
W hen analysing change in your retail
business, you need to look at the
internal aspects of your business, and to
effectively? develop a Positioning Statement…75
Our customers are…………. They come to
Analyse the threats
5 to your business.
The final part of your SWOT is to
us for………………… because…………….
We are better than……………for the follow-
ing reasons: ……………………….
analyse the threats to your Customers prefer us because……………….
business.You need answers to the
following questions:
• What are the main factors that
Consider your financial
create a potential threat to our
retail operation? 8 position.
• Which threats are the most serious How will the changes affect your
to our future retailing operation? retail business? Know precisely why
• What changes could take place you should be making the changes,
that could threaten our business? how they will reduce costs, increase
profits, or both, and to what extent
Prioritise your actions. they will increase your market share.
6
Having carried out a SWOT analysis
Do you have the resources to make
such changes?
on your business, and explored the
possibilities for and implications of Understand the technical
future development, you now need
to prioritise your findings. Make
9 implications.
You need to evaluate how technical
your decisions based on the response and technological developments will
you believe you will get from your enhance your business, especially as
customers, your team and their far as the customer is concerned. Do
capabilities, and on a consideration you have the internal resources to
of your economic situation and deal with such changes and does
technical skills and abilities… your team have the knowledge,
understanding and motivation to
Consider staff reaction deal with the changes.
7 to proposed changes.
Examine critically
How will your team respond to any
proposed changes, how will you
measure their responses, and how
10 the final strategy.
Finally, you must critically examine
will you involve them in each envisaged change in detail.
implementing the changes? Consider Critique all the information available
as well the extent to which you will to you, to conclude with answers to
need to involve your customers in the following: What?, When?,
the process. You will need to adopt a Where?, Who?, How?, and Why?
professional approach when Only then will you be fully prepared
addressing these issues. to implement your new strategy.

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BENCHMARKING See also: 172, 178, 180, 182, 184, 198, 200

How to benchmark your store

Successful businesses need to monitor what they are doing. The


old saying, ‘if you can’t measure it, you can’t manage it’, is very
true of retailing. But not only do you need to measure within your
own business, you also need to measure your enterprise against
other businesses in your retailing sector, especially the leaders in
your field. This is the process of benchmarking and it is undertaken
so that you can become as good as, or better than, your
competition…

Aim above the average. process as a management tool, never


1
It is easy to fall into the trap of
as the answer to your problems.

Know what to measure.


gathering measurements from an
industry, averaging them, and then
comparing your figures with these
3
In retailing there are some common
‘average’ statistics. This can be benchmark areas that relate to all
misleading since those average retail sectors. These include:
figures also include the businesses • Sales per selling square metre
that are failing. What you need is to • Average sale per customer
benchmark against the top one-third • Sales per full time team member
• Sales return as a percentage of sales
of performers in your retail sector. By • Markdowns as a percentage of total
using these as your yardstick, you will sales
get a truer picture of how you are • Shrinkage as a percentage of sales
performing in your industry sector. • Labour cost as a percentage of sales
• Stockturn during the year.
Know why you measure. Other figures can be analysed, but an
2
In benchmarking, you measure key
exploration of these benchmarks can
help you in a practical way to
profit indicators within your retail improve your business.
sector. If you find you are
Know how to measure.
performing below standard, then the
process will force you to ask 4
To obtain a benchmark figure in the
questions about your performance.
Perhaps your figures are unique key retailing areas, apply the
because of your location, following equations:
demographics, unique product mix, Sales per selling square metre
or management style. Perhaps your Total dollar sales
store is simply performing poorly. No. of square metres of selling space
Benchmarking will not normally give Do not include car park, office space or
you answers. Instead, look on the other non retail areas in this equation.

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Vol. 1: See 312, 308

Include aisle ways. It is exceptionally Shrinkage as a percentage of sales


valuable if you can do this in each product Inventory shrinkage
category as it allows you to identify your Total sales
profit and loss merchandise areas.
This will provide a shrinkage figure that
Average sale per customer then needs to be marked against
Total dollar sales customer theft, team member theft, or
Number of customer transactions administration errors.
This tells you how good your Labour cost as a percentage of sales
merchandising and selling strategy is. All payroll expenses related to selling
The information should be available to Total sales
your whole team.
This tells you the cost of doing business
Sales per full time team member with your present team.
Total dollar sales Stockturn during the year
Number of full time members equivalents
Total retail sales per year
The key is to look at full-time equivalence, Retail value on inventory held at any one time
so group causals' hours into full-time
employee equivalence. If you do not, it is This tells you how often you turn your
very difficult to compare one store’s products during a twelve month period.
figures against anothers.
You should contact your trade
Sales return as a percentage of net sales
organisation for assistance and
Returns in total
Total of transactions
information relating to benchmarking
within your industry sector.
This will provide you with a customer
satisfaction report based on return of
Interpret your findings.
goods, not on human relationships with
your team. For example, a high goods
return may reflect on your quality control.
5
The value of benchmarking comes in
Markdowns as a percentage of sales knowing how to interpret the
Markdowns figures, and the following table will
Total sales act as a guide:

BENCHMARK ABOVE TOP THIRD IN INDUSTRY BELOW TOP THIRD IN INDUSTRY


Sales per selling Well done You have opportunities. Review your
square metre product mix, merchandise, display and
signage strategies.
Average sale per Well done Review your sales training. Your team are not
customer add on selling, selling up or communicating
with the customers as well as others.
Sales per full time You may need more team members. You could be overstaffed, or have the wrong
equivalent They may eventually burn out. people selling, or your training program needs
reviewing.
Sales return as a Customers are dissatisfied. Find out Well done
percentage of sales why as a matter of urgency.
Markdowns as a Are your price strategies correct? Well done
percentage of total sales Are team members selling professionally?
Shrinkage as a Analyse your shrinkage policy Well done
percentage of sales as a matter of urgency.
Labour cost as a Is your training effective? Do you have enough team members
percentage of sales to service customers properly?
Stockturn during the year Well done You are overstocked or have the wrong
merchandise mix.

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STANDARDS See also: 174

How to maintain standards


in your store

Success in today’s retail world is not about achieving perfection, or


even excellence. Realistically, it is about achieving consistency.
Customers accept that perfection is elusive and that few stores will
be excellent. What they will not accept is a retailer who is
inconsistent. A successful business ensures consistently good
standards in customer service, hygiene, merchandising, and general
safety. To maintain such standards, consider the following advice…

Walk the floor • the cleanliness of worktops and the


1 regularly.
Management needs to be visible,
checkout
• posters that are out of date or ripped
• cobwebs
actively involved in retailing and • dead flies in the store window.
maintaining retail standards. This A survey of small stores carried
cannot be achieved by staying in the out by Arthur Andersen in the
office. Walk the floor once a day— United States found:
and be seen to walk the floor. During Emptied litter bins daily 97%
that walk you should have a checklist Washed windows daily 66%
and use it to prioritise tasks that need Cleaned the toilets daily 52%
to be carried out during the day. Mopped floors daily 49%
Waxed the floors daily 21%
Walk in your customer’s
2 shoes.
When walking the store you should
4 Devise a standards listing
for your store.
do so as if you were a customer. Start To maintain consistency, prepare a
outside the front door to the shop list of questions which will guarantee
and take the route your average you are projecting the image you
customer would take. Go through want your customer to have of your
the checkout and leave the store. If store. Your list may comprise such
you do not, you will miss the items as these, compiled by Rod
obvious. Never assume anything. Pickworth of Home Owners
Warehouse:
Remember: retail is • Is your store front clean and inviting to
3 detail.
the customer?
• As you enter your store where does the
Detailed retail stores are admired by customer’s eye focus? Is this what you
their customers. Always check: want as the focus?
• finger prints on the front door • Are the key locations in the store
(especially if it is glass) supporting the correct product? Is this
• the condition of the floor product at the correct stocking level
• toilet paper in the restrooms and is the signage clearly visible?

Just about Everything a Retail Manager Needs to Know


MANAGING
WINNING OVER PROMOTING MANAGING INDEX
YOUR STORE
YOUR CUSTOMER YOUR BUSINESS
YOUR PRODUCT
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
177
Vol. 1: See 308, 323
Management Memo
• From the entrance is it easy to locate all
the departments in the store?
• Can you see strong promotional
signage related to the specific products
D o not delegate store walks. They are a
key part of the role of management.
The team must see them being done and
you are promoting in the store? they must be done daily. Management
• Is the race track easy for the customer ‘swooping’ down from Head Office to do store
to follow, is it uncluttered, clean and walks every three to six months can
safe? demotivate teams and are not good for your
• Is the store inviting to the customers business culture. 76
when they take the first five steps into
the store?
• Are all the lights working? Are they all WEEKLY STANDARDS CHECKLIST
on and located in the correct locations How good are we?
and at the correct angles?

Extremely
Extremely

Neither
Slightly

Slightly
• Do products on display make a strong
– +


Quite

Quite
statement to your customers and are
they inviting the customer to buy?
PHYSICAL APPEARANCE
• Does the merchandise reflect the image
of your store? Dirty ■ ■ ■ ■ ■ ■ ■ Clean
• Does your store reflect a personality to Unattractive ■ ■ ■ ■ ■ ■ ■ Attractive
decor decor
your customers? Does it reflect the Difficult to ■ ■ ■ ■ ■ ■ ■ Easy to shop
name on the outside of the store? shop
• Are the familiar brands that customers Slow checkout ■ ■ ■ ■ ■ ■ ■ Fast checkout
…………… ■ ■ ■ ■ ■ ■ ■ ……………
ask for in the correct locations around
the store? STAFF
• Do the shop fittings and fixtures for Discourteous ■ ■ ■ ■
Courteous ■ ■ ■
promotions reflect the image you are Cold ■ ■ ■ Warm ■ ■ ■ ■
trying to create? Unhelpful ■ ■ ■ Helpful ■ ■ ■ ■
Inadequate ■ ■ ■ Adequate■ ■ ■ ■
• Have you ‘lifestyle’ statements around Numbers Numbers
the store that your customers can relate …………… ■ ■ ■ ■ ■ ■ ■ ……………
to?
ADVERTISING
• Are you using the upper walls
correctly? Is the consumer's eye Uninformative ■ ■ ■ ■ ■ ■ ■ Informative
brought down on to products or are Unappealing ■ ■ ■ ■ ■ ■ ■ Appealing
you encouraging them to look at the Unbelievable ■ ■ ■ ■ ■ ■ ■ Believable
Unhelpful ■ ■ ■ ■ ■ ■ ■ Helpful
ceiling due to misplaced signs and …………… ■ ■ ■ ■ ■ ■ ■ ……………
products?
• Is all the cross merchandising in the PRODUCTS
store relevant to your customers? Narrow ■ ■ ■ ■ ■ ■ ■ Wide
• Have you the correct ratio of signs in selection selection
the store and are they relevant to your Depleted ■ ■ ■ ■ ■ ■ ■ Overstocked
stock
customers and the products next to …………… ■ ■ ■ ■ ■ ■ ■ ……………
them?
PRICING

Devise appropriate Comparatively ■ ■ ■ ■ ■ ■ ■ Comparatively


5 checklists.
low prices
Average dollar ■
spending low
high prices
■ ■ ■ ■ ■ ■ Average dollar
spending high
The following checklist is typical of Large number ■ ■ ■ ■ ■ ■ ■ Low number
one which you could adapt/compile of specials of specials
for use with your store: …………… ■ ■ ■ ■ ■ ■ ■ ……………

Just about Everything a Retail Manager Needs to Know


FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS
178
PERCENTAGES See also: 180, 182, 174

How to work with percentages

To allow comparisons to be easily made between stores and for


benchmarking to be more realistic, many retailers prefer to talk
in percentage terms rather than in financial terms. For this
reason it is essential for retailers to understand the basics of
percentage calculations—although it is important to remember
that you bank money, not percentages, and it is money that
eventually is counted as profit and pays the expenses.

Know how to calculate analyse such financial ratios to


1 simple percentages.
A percentage is a part of a hundred
determine the health of their retail
business. As a retailer, then, you
and working out a percentage is a need to:
simple mathematical equation. Step 1. Gather accurate information
For example, 59 per cent (%) is 59 and package it so you can see
parts of a hundred. relationships
59 = 0.59 = 59% Step 2. Calculate financial ratios
100 Step 3. Record your industry
Part standards
Percentage = x 100
Whole Step 4. Compare your results
Step 5. Analyse possible causes of
Percentages allow you to compare problems
figures within your retail business. Step 6. Take action.

Develop an
2 understanding of 3 Be able to calculate
percentage change.
percentages.
In retailing we often need to
It is important for retailers to
calculate a percentage change
understand percentages since it
between two figures.
enables them to calculate valuable
The formula for this is:
comparative statistics as:
Percentage Change
Net Profit as a percentage of sales = x 100
Change Original Number
Gross Profit as a percentage of sales
Wages as a percentage of sales For example, if you have reduced the
Shrinkage as a percentage of sales price of a shirt from $12 to $10 and
Expenses as a percentage of sales you need to tell the customers on the
and so on. ticket the percentage change to the
Retailers need to be able to original price:

Just about Everything a Retail Manager Needs to Know


MANAGING
WINNING OVER PROMOTING MANAGING INDEX
YOUR STORE
YOUR CUSTOMER YOUR BUSINESS
YOUR PRODUCT 179
○ ○ ○ ○ ○ ○ ○ ○ ○ ○
○ ○ ○ ○ ○ ○ ○ ○ ○ ○
Percentage change =
2 (the change) Management Memo
x 100
12 (the original price)
= 16.6% saving. D iscounting can be a major
your store is in trouble. Dis
should be used as a tool to ma
indicator
cou nting
nage stockturn,
Know how to work out
4 discounts.
but if you become establishe
ers' eyes as a discounter,
achieve the gross profit you
d in the custom-
you may never
Suppliers and manufacturers are are aiming for. 77
constantly contacting retailers with
discount buying opportunities. These
are often based on the amount of
product ordered, reduction on list your business. This can be calculated
price, or an agreed payment contract. using the following formula:
As a retailer you need to know how Discount
to calculate discounts so that you can = Discount Percentage x Normal Price
confidently make a business
decision… = 7% x $2000 (normal bulk price)
A supplier telephones you and = .07 x 2000
offers a 7 per cent discount on dog = $140 saving on order
food. Your immediate task is to work This order will actually cost you
out the saving in financial terms to $2000 less $140. You will pay $1860.

Just about Everything a Retail Manager Needs to Know


FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS
180
PROFIT See also: 174, 178

How to work out mark up


versus gross profit

Gross profit is your key financial guide for growing your


business. Everyone in your organisation should be able to
understand gross profit and how it affects the life blood of
your retailing and their department. An understanding of
gross profit allows your team members to make decisions
that will improve the way your business operates…

Understand gross profit. Gross Profit % = Sell Price – Cost Price X 100
1
Retailers generate a lot of money e.g.
Sell Price

Gross Profit % = Sell Price – Cost Price X 100


through the cash register. A large
Sell Price
percentage of this money is used to
= $5.00 – $3.00 X 100
pay for the goods sold, as well as the
$5.00
other expenses as a result of doing
business. The aim of a retailer is to = 40 %
generate enough money from selling If you purchased a product for $3.00
a product to cover the costs of and you sell it for $5.00, you will
purchasing that product, to cover all generate a 40 per cent gross profit.
the related expenses—and to obtain a
Understand mark up.
profit from entering into the venture.
Gross profit is the dollars in profit
from buying and selling a product.
3
Mark up is the profit obtained from
Put another way: the sale of a product when expressed
Gross Profit = Sell Price – Cost Price as a percentage of the cost price.
The gross profit is used to pay Mark Up % = Sell Price – Cost Price X 100
expenses and to provide a return of Cost Price
profit. e.g. Note: Cost Price, not Sell Price, goes
Gross Profit = Sell Price – Cost Price below the line.
= $5.00 – $3.00 e.g.
= $2.00 Mark Up % = $5.00 – $3.00 X 100
$3.00

Think in terms of gross = 66%


2 profit percentages. This shows that a 40 per cent gross
profit is in fact a 66 per cent mark up.
Although retailers bank dollars, not
percentages, they often talk about They are completely different
gross profit in percentages terms. percentages.

Just about Everything a Retail Manager Needs to Know


MANAGING
WINNING OVER PROMOTING MANAGING INDEX
YOUR STORE
YOUR CUSTOMER YOUR BUSINESS
YOUR PRODUCT
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
181
Management Memo
Avoid costly mistakes
4 through confusion.
Confusion can cause major problems
P ricing policies vary according to the type
of store and the goods sold. Whatever
the policy is for a retail organisation, it rarely
for the retailer. By looking at the changes. Customers expect certain prices at
calculations below, it is readily certain stores. 78
understood that, if team members
confuse gross profit percentages and
Explore ways to increase
mark up, the retailer can end up with
some very misleading figures when
analysing sales.
5 your gross profit.
The bottom line for retailers is the
size of their profits. If you hope to
Schedule of Comparisons increase the size of your gross profit,
between Mark Up Percentages then consider the following actions:
and Gross Profit Percentages
• Purchase your products at a lower
Mark Up % Gross Profit % price.
10 9.90 • Change your product mix.
15 13.04 • Reduce the number of markdowns.
20 16.67 • Charge higher retail prices.
25 20.00 • Price your services higher.
30 23.08 • Stock more seasonal items.
35 25.93 • Offer fewer Stock Keeping Units (SKUs).
40 28.57
45 31.03 According to research by Arthur
50 33.33 Andersen in the United States, the
55 35.48
60 37.50 best method of increasing gross
65 39.39 profit is to change your product mix
70 41.18 and to include high gross profit
75 42.86
80 44.44 items of a non known value nature,
85 45.96 which will allow you to use price
90 47.36 pointing effectively. In addition, they
95 48.73
100 50.00
recommend that retailers link this to
105 51.22 more value-added services.
110 52.38 Customers appreciate such service
115 53.49 and are willing to pay more for it.
120 54.56
125 55.56 On the reverse side, it is
130 56.52 important for retailers to be aware of,
135 57.45 and take steps to minimise, those
140 58.33
145 59.18 factors which can result in a decrease
150 60.00 in gross profits. These include:
Many people get confused in • Competition pressure.
grappling with the terms mark up • Too many retailers in your sector
and gross profit. By considering the within your catchment area.
• Customer preferences change.
above chart, you can see why you • Change in product mix.
mustn’t. • A lot of lower priced merchandise in
stock which gives low gross profits.

Just about Everything a Retail Manager Needs to Know


FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS
182
PRICING See also: 180

How to set prices that sell products

A good pricing policy is a vital ingredient in any retail business


and is the considered outcome of a range of factors—
manufacturing costs, government charges, suppliers’ costs,
overheads, expenses, profit margins, customer needs, perceived
value of the product, and so on. For the retailer, it also becomes
a balancing act as the customer demands better quality
products and better service, at acceptable prices.

Be aware of the two rather than price. This has been


1 product types.
There are two types of product in the
successfully achieved by the florist,
wine, and chocolate industries.
marketplace and both need to be As well, retailers can price such
treated differently by the retailer products on the notion of 'perceived
when setting prices. value'. Clothes, toys, cosmetics, and
plants are often based on a retail
Known Value Products
price that at times has no relation to
Known value products are basic
manufactured price. Both the toy and
commodities and are very price
clothing industries learnt long ago to
sensitive. Customers purchase them
base prices on perceived value.
on price considerations— newspapers,
dog food, toilet paper, cornflakes, tea,
Use price points.
and so on. Some retail sectors
promote relatively few known value
2
The practice of price pointing is
products, but they are a major part of
the product mix in supermarkets in based on the price barriers that most
particular, and trade in these items is customers subconsciously set in their
very competitive. minds when they go shopping. These
price barriers are 50 cents, $1, $1.50,
Non Known Value Products $2, $3, $5, $7.50, $10, $15, and so on.
Non known value products are The perception is that a 95c
normally bought for reasons other product is seen as acceptable—but at
than price—they are customer $1.05 it is perceived as expensive.
‘wants’ rather than ‘needs’—and Another product, priced at $1.29 is
include fashion clothes, toys, exotic perceived as being cheap, having
fruit, most garden products, and moved away from the $1 price
sports equipment. With such items barrier towards the next barrier at
retailers have more leeway in terms the $1.50 mark.
of the price levied. To stimulate Price points used effectively can
customer demand, such products are ensure you maximise profits and
normally promoted on their benefits, stockturns.

Just about Everything a Retail Manager Needs to Know


MANAGING
WINNING OVER PROMOTING MANAGING INDEX
YOUR STORE
YOUR CUSTOMER YOUR BUSINESS
YOUR PRODUCT 183
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Avoid those price point


Management Memo
3 barriers.
Every customer has a ‘price barrier’
Avoiding those Price Point Barriers 79
Major Price Minor Price Your Price Point
Barrier Barrier Should Be
when they shop—a pre-conceived,
perhaps subconscious feeling of $ 1.00 $ .95 or 1.25
$ 1.50 1.45 or 1.65
what is a ‘cheap’ product and what is 2.00 1.95 or 2.25
the point at which that same product 3.00 2.95 or 3.25
becomes a ‘dear’ product. Pricing 5.00 4.95 or 5.25
your products with these barriers in 8.00 7.95 or 8.25
mind can dramatically improve your 10.00 9.95 or 10.50
13.00 12.95 or 13.25
bottom line with no other effort on 15.00 14.95 or 15.50
your behalf. To defuse those barriers, 18.00 17.95 or 18.25
refer to the accompanying 20.00 19.95 or 20.50
Management Memo. 23.00 22.95 or 23.25
25.00 24.95 or 25.50
30.00 29.95 or 30.55
Try lifting prices
4 on a monthly basis.
One Australian retailer has a novel
40.00
50.00
75.00
39.95 or 42.00
49.95 or 55.00
74.95 or 78.00
strategy for handling inflation via his 100.00 99.95 or 110.00
150.00 149.95 or 175.00
computer-based pricing system. He 200.00 199.95 or 225.00
increased prices by adding one
percent at the start of each month. In
this way he claims he eliminates the Ref: Ron Marceil, Garden Centre Consultant,
California, USA
hurdle of confronting customers with
large annual price increases and, problem 12-18 months later when
being programmed into his annual accounts are finalised or
computer, it happens automatically. when liquidity has dried up.
This increase compounds to give a The loss factor on lines that sell
12.6 percent increase for the year— slowly due to a large price increase is
yet the monthly price jump is minimised using this strategy.
negligible. To explore his strategy further,
Other advantages soon become consider the effect, over one year, of
evident. Buyers, encouraged by the a one percent monthly increase for a
better price, purchase earlier rather $3.65 product…
than later. The well-proven September $3.65
marketing strategy of warning October $3.68
customers of pending price increases November $3.72
happens 12 times a year rather than December $3.76
once. January $3.79
As well, he argues, manufacturers February $3.83
March $3.87
delay price increases because they April $3.91
fear market reaction and loss of May $3.95
business to other producers who June $4.00
have not increased their prices. They July $4.03
only discover the real extent of their August $4.07

Just about Everything a Retail Manager Needs to Know


FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS
184
PRICES See also: 182

How to increase your prices

Retailers spend a great deal of time considering price


reductions when they should in fact be considering how to
put prices up. To understand how much you can increase
the price of a product, it is essential to understand the
principles of price banding. The price band will vary
according to your location and demographics.

Position the product. wrong and sales may be dramatically


1
Product positioning is basically your
reduced. For example, the customer
expects to pay more for an expensive-
attempt to influence the perception a looking flower arrangement at a
customer has of your product. Where florist. If the item is cheaper than
you locate the product in the store, they expect, they question how long
the promotion campaign you adopt, the flowers will remain fresh.
even the price itself, all play a role in
Consider the impact
influencing the shopper’s perception.
As a guide, the higher the quality 2 before increasing price.
profile a product has, the more a Everything you do should be
customer is prepared to pay for it. measured. If you increase the price of
Price positioning in relation to a product, you must know how it
quality perception in the eyes of the will affect sales. Raise your price only
customer is of paramount when you understand the impact of
importance. Get the price point the increase. The table below is a

Ref: Results Corp, If your present margin is…


Queensland 20% 25% 30% 35% 40% 45% 50% 55% 60%

…and you increase …your sales could decline by the amount shown below before your gross profit reduces
your price by…… 2%` 9% 7% 6% 5% 4% 4% 4% 4% 3%
4% 17% 14% 12% 10% 9% 8% 7% 7% 6%
6% 23% 19% 17% 15% 13% 12% 11% 10% 9%
8% 29% 24% 21% 19% 17% 15% 14% 13% 12%
10% 33% 29% 25% 22% 20% 18% 17% 15% 14%
12% 38% 32% 29% 26% 23% 21% 19% 18% 17%
14% 41% 36% 32% 29% 26% 24% 22% 20% 19%
16% 44% 39% 35% 31% 29% 26% 24% 23% 21%
18% 47% 42% 38% 34% 31% 29% 26% 25% 23%
20% 50% 44% 40% 36% 33% 31% 29% 27% 25%
25% 56% 50% 45% 42% 38% 36% 33% 31% 29%
30% 60% 55% 50% 46% 43% 40% 38% 35% 33%

Just about Everything a Retail Manager Needs to Know


MANAGING
WINNING OVER PROMOTING MANAGING INDEX
YOUR STORE
YOUR CUSTOMER YOUR BUSINESS
YOUR PRODUCT
○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○ ○
185
Management Memo
useful tool for measuring the
consequences of price increases. As
the perceived quality of the product
R etail store managers mark down their
products after having considered the
following factors: 80
improves, the customer expects the End of season 72%
price to move up. The motor vehicle Sales movement 59%
industry does this exceptionally well. Age of product 58%
▲ Walking the store 55%


ing Rule of thumb markdowns 21%
Price ition
os Across board markdowns 10%
eP
Pric Predetermined markdown formula 4%

Quality
A Basic Product, e.g. cornflakes
A Fashion Product, e.g. grey dress
Do your homework
3 when setting prices.
A Seasonal Product, e.g. sunscreen
Pricing strategies in general retail
Do not just put prices up or down vary based on the category of the
without undertaking some basic product. In the Arthur Andersen
research. You must link your price Research, they found:
strategy to your customers’ Product Range Pricing Breakdown
perception of value (what they Retail policy Basic Fashion Seasonal
would pay for it). This is often Everyday low pricing 59 % 10 % 31 %
different from your perception of Full price promotion 50 25 25
value. Indeed, in many instances, Consistently moderate price 48 26 26
High-low price 45 23 32
your perception will be lower than
the consumers'.
US research by Arthur Andersen Cater for changed
found that retailers, when setting a
price, do so for the following
5 buying habits.
Research by Grey Advertising in
reasons, in order of importance:
1991 and 1993 in the United States
1. Expected gross margin
2. Competitor’s price
found customer buying habits are
3. Manufacturer’s recommended retail changing.
price 1991 1993
4. Customers’ perceived value
Many moderately priced brands
5. Perceived demand
meet my needs today 70 % 77 %
6. Cost to retailer
Less expensive brands have equal
7. Company image
or better quality 72 89
8. The product is in fashion at present
I will not go back to the spending
9. Volume of stock on hand.
I used to 72 83
Always review your competitors'
prices, your consumers' expectations, Clearly, customers are shopping
and your image before setting a price. around and being more critical. For
this reason, you would be wise to
Vary your price according monitor the price changes of your
4 to the type of product.
When pricing your product, consider
key products in your competitors'
stores and position your price
it in one of three categories: accordingly.
Just about Everything a Retail Manager Needs to Know
FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS
186
ADVERTISING BUDGETS See also: 60, 62, 64, 66

How to set an advertising budget

Advertising, if done correctly, is a rewarding investment in


your business future. Too many retailers look on it as an
expense and prune it when the economy is weak. This is
dangerous and not a strategy that will provide you with
a profitable future. Before you can plan your advertising
campaign, however, it is vital that you set a realistic
advertising budget…

Adopt a proven advertising than the benchmarked


1 overall approach. business as you still need to get your
name known in the marketplace.
Use one of two well tested budgetary
Your location. If you are situated in a high
approaches when considering the rent area, you will need to increase the
financial implications of your sales per square metre in your business—
advertising strategy: which means you will need more
Objective Technique—planning an exposure through advertising.
advertising budget to meet your Your size of retail outlet. If you have a
previously set objectives. Here your large outlet, in comparison with other
advertising strategy can be systematically businesses in your retail sector, you may
costed out, and is not developed on already have a successful operation and
hunches; but the budgetary approach will may need to spend less than the
only work if you have already planned a benchmark for your retail sector.
future direction for your business. The business economy. If the retail trend is
Percentage of Sales Technique. Many retail negative in your business sector, you
sectors have benchmark figures for may need to increase your investment in
companies to work on. For example, the advertising so that you can increase your
standard for your sector of retailing may market share in tough times.
be that the average company invests 5 Merchandising policy. If your objective is
per cent of turnover on advertising. If to move product quicker than your
your projected turnover for the next year competitors by using a lower price
is $100,000, then your advertising budget strategy, then you will need to increase
should be $5,000. your advertising budget to increase
consumer awareness.
Consider the factors Special events. You will need to invest
2 that matter. extra funds to advertise special events.
When deciding on how to develop
Check your profit pointers
your advertising budget, you need to
consider a range of factors that 3 in the planning process.
impact upon your business, including: Do not just plan your advertising
The age of your business. If you have a budget across the whole business
business that is fewer than three years carte blanche. It’s a lot smarter to
old, you need to spend more money on identify your ‘profit pointers’ and let

Just about Everything a Retail Manager Needs to Know


MANAGING
WINNING OVER PROMOTING MANAGING INDEX
YOUR STORE
YOUR CUSTOMER YOUR BUSINESS
YOUR PRODUCT 187
Vol. 1: See 374, 376, 392

them point the way in terms of your Marketing Communications Checklist


advertising investment priorities. Ideal Unsuitable
• Analyse all departments over the last for the for the
trading period and look for the peaks. Planned Planned
• Identify departments that are Promotion Promotion
expanding. Mass Media
• Find out if any manufacturers are Television ■ ■
planning any major promotions in the Radio ■ ■
next twelve months. Press ■ ■
• Investigate what your competitors have Magazines ■ ■
planned for the coming year or so. Billboards ■ ■
• Determine the extent to which your Mixed signage ■ ■
competitors are investing in in the community
advertising their businesses. Target Media
Catalogues ■ ■
Direct mail ■ ■
Be systematic
4 in your approach.
Telemarketing
Sampling
Free riders (Gifts)






Budgetary planning involves Publicity ■ ■
analysis of your business and a Sponsorship ■ ■
consideration of future directions. A Organised events ■ ■
typical simple chart you might Instore Media
Merchandising ■ ■
devise as a tool to help explore your Display ■ ■
options could be as follows: Point of sale ■ ■
Brochures ■ ■
Department Sales Target Advertising Display packs/products ■ ■
last year sales budget
this year available Personal Media
Sales representatives ■ ■
1. Retail staff ■ ■
2. Demonstrators ■ ■
3.
Ref: Open Learning Advertising Manual, Capel
4. Manor College, UK
10.
potential customers reached:
Advertising Circulation Cost/1000
Select the appropriate Investment customers
5 media. Newspaper A $500 10,000 $500 X 1000
10,000
Having determined how much
= $50
money you have allocated to
Newspaper B $1000 50,000 $1000 X 1000
advertising, you now consider what 50,000
means of communication will provide = $20
the best return on your investment.
Adapt your strategy
Again, the following checklist will
help you to explore the options. 6 as required.
When advertising in print media, Retailing is an ever changing scene.
your aim should be to get the lowest Do not set a budget for the year and
cost per thousand of targeted leave it. Monitor your strategy and
customers. Evaluate the relative cost results, and change your emphases
of each newspaper, for example, accordingly to changes in the
based on the cost per thousand economy or your business.

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FOREWORDCONTENTS PREFACE TESTIMONIALS
AUTHORS
188
COMPETITIVE EDGE See also: 95, 186

How to maintain a competitive edge

Retailing is becoming more competitive. Australia has seen


dramatic increases in selling space per head of population
and many pundits would argue that we are over-shopped.
Therefore getting new customers and making sure they stay
loyal to your business is a major challenge and requires
specific strategies…

Plan a strategy to • A travel company might provide a


1 develop your staff.
In today’s retail environment it is
complimentary leather travel
wallet.
difficult to stand out from the crowd. • Try the buy-one-and-get-one-free
Your competitors, more than likely, strategy. It’s a stronger statement
sell the same products at the same than ‘two for the price of one’ or
price. You therefore need a campaign ‘fifty per cent off’. Free is a
that says, 'I really want your powerful word in this context.
business'. A key to success in this • Try a banded offer. This involves
area, of course, is that your whole coupling two products together
team should be striving for new and putting a band around them,
business. They must be trained in e.g. four litres of paint banded
professional skills of selling. with half litre of turpentine with a
price reduction over buying them
Work on your
2 promotional techniques.
You need to offer more than just
singularly.
• Try price reductions. Do not have
more than two sales a year, or
basic product if you are going to customers will only come at sales
grab the customer’s attention. For time. The best sales work when
example: you maintain a money back
• A hairdresser could promote guarantee. It gives consumers
allied products. extra confidence.
• A fashion store could use • Try sampling. Provide samples to
perfumes as an add-on. encourage sales. The Duty Free
• A bookshop might start a book Shop at Auckland International
club. Airport recently had a whisky
• With any purchase, offer a free gift sampling session. You can
that will be treasured by the imagine what that did for sales!
customer. • Try vouchers and coupons. These

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YOUR PRODUCT 189
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are used by many retailers,
especially the supermarkets who
use it to capture your weekly
Management Memo
ition. Re-
on't be afraid of the compet
loyalty.
• Insist on quality service—this is
D member, a kite
the wind.—Hamilton Mabie
rise s aga inst , not with,

your best promotional strategy. die a little—Gore


Every time you succeed, I
Vidal
Manage your
3 promotions.
Promotions need planning at least
Get the contract signed.
four months ahead if they are to be
successful. Saatchi and Saatchi, the 5
international promotional company, If you are working towards the
advocates the three month cycle for signing of a contact with your
promotions. This allows your customer, be aware of the following:
customers to get used to the • People often buy for greed, fear
promotion. You must have a and laziness. Listen for these clues
calendar to plan such sales in your conversation.
initiatives.
• Get from a verbal agreement to a
financial agreement.
Make a sales promotion
4 work for you. • Agree on the little things before
you start on the big ones.
A key to success is to read the
consumer magazines, those related • Keep the negotiations friendly.
to your industry sector that your • Finally, when you have closed the
consumer reads. This will help you sale, do not close the relationship.
relate to your customers more You should have worked towards
closely. You should aspire to the a win-win situation that allows
same things they aspire to. you to continue the relationship.
Keep your promotion relevant.
Keep it simple.
Keep it quality.

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190
SALES PROMOTIONS See also: 182, 186

How to develop sales promotions

Price reduction campaigns can work in certain locations and


economic climates, but if you fail to plan carefully for such
campaigns, you may find that you have cultivated a price-
motivated shopper who only comes for discounts. Supermarkets
have taken the lead in specific price promotions and the lessons
learned from positive promotions in that retail sector can be readily
adapted to other retail industries…

Consider Everyday Low Consider a Variable Day


1 Price promotions. 3 Price policy.
ELP promotions are common in For VDP promotions you make a
supermarkets and home business decision to vary the price on
improvement stores. Here the specific days of the week. You
company promotes its business as usually take your quietest day of the
the cheapest in town on the products week and use reduced prices on that
it supplies. To develop this concept day to increase your customer traffic.
as a strategy you must regularly Some companies call these days
review your competition and ‘Pensioners’ Day’ or ‘Ladies Day’.
compare your prices with theirs. To
develop ELP promotions, you will Position sales promotions
need to be a major player in the
marketplace as you will have to buy
4 to increase total sales.
The objective of a sale is to increase
in bulk to ensure you can maintain your customer traffic and as a result
such promotions. increase your cash flow. To achieve
this, many businesses place sales
Consider using Bulk bins at the front of the store. Others
2 Purchase Discounts. hold the view that it is better to place
a ‘taster’ of the sale at the front of the
BPDs are another useful way of
increasing the average sale per store and then place the major sale
customer. One of the most successful bin at the rear of the store, thereby
sales promotions is the ‘four-for-three’ encouraging the consumer to walk
promotion on products. Try using through the store and, hopefully, to
the strategy during one month to pick up more product on impulse as
increase sales, or on weekdays during they pass.
one specific month to increase sales
Be aware of the value
on quieter days. This can be successful
as it increases your average sale per 5 of price banding.
customer and ensures the initial Price banding is the band of prices in
purchase items are at full gross profit. which a product will sell. For

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YOUR PRODUCT 191
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example, if the maximum perceived
value is $30 and the minimum is $25 Management Memo
then this leaves a price band between
$25 and $30 for flexible pricing. A
retailer in a depressed area or in a
I s it better to increase the rate of gross
profit rather than sales? You may be able
to achieve an extra 1 per cent gross margin
lower economic group area may without losing sales. How? By pricing ac-
select a price nearer the $25 giving cording to what the market determines. Rather
him/her the flexibility to increase than sell at $9.95, go well past the $10 price
prices in the future. A retailer in a barrier and sell at $11.99. In other words,
more affluent area or higher once past the price barrier, it is better to move
near to the next one which in this example is
economic group area may price the
$15, rather than stay too close to the previous
product near the $30 and achieve the price barrier. Pricing below the next barrier
same volume of sales. gives the consumer the impression you are
inexpensive, while pricing just above a price
Ensure promotional sales barrier gives the impression of being expen-
6 work for you.
In more difficult trading climates, the
sive.81

tendency has been to reduce prices


and to have sales promotions to The table below, prepared by Results
increase turnover. The result of Corp, Queensland, is a useful guide
continued sales promotions may be when reducing prices. You may find
increased turnover, but can this that the turnover increase you
increase in turnover justify the achieve may not justify having an
reduction in gross profit percentage? overall price reduction.

Ref: Results Corp, If your present margin is…


Queensland 20% 25% 30% 35% 40% 45% 50% 55% 60%

…and you reduce …to produce the same profit, your sales volume must increase by
your price by…
2%` 11% 9% 7% 6% 5% 5% 4% 4% 3%
4% 25% 19% 15% 13% 11% 10% 9% 8% 7%
6% 43% 32% 25% 21% 18% 15% 14% 12% 11%
8% 67% 47% 36% 30% 25% 22% 19% 17% 15%
10% 100% 67% 50% 40% 33% 29% 25% 22% 20%
12% 150% 92% 67% 52% 43% 36% 32% 28% 25%
14% 233% 127% 88% 67% 54% 45% 39% 34% 30%
16% 400% 178% 114% 84% 67% 55% 47% 41% 36%
18% 900% 257% 160% 106% 82% 67% 56% 49% 43%
20% - 400% 200% 133% 100% 80% 67% 57% 50%
25% - - 500% 250% 167% 125% 100% 83% 71%
30% - - - 600% 300% 200% 150% 120% 100%

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192
NON PRICE SENSITIVE PRODUCTS See also: 157

How to manage
non price sensitive products

Surprisingly for most retailers, price is not always the major reason
people purchase a product. A recent survey of customers at
a Melbourne garden centre found that their priorities for purchase
related to, in order of importance—name of plant, its height, the
colour of its flowers, the scent, its non-poisonous nature, and, finally,
price. Indeed, the majority of products sold today are non price
sensitive or non known value products. Understand the special
nature of such items and you can improve your profit line…

Be aware of your non will take into consideration:


1 price sensitive products. • Is the product in fashion at present?
• Is it the right season to promote it?
Non price sensitive lines are
normally purchased on impulse. • Is the product currently topical?
They are often a ‘want’ rather than • What is the life of the product? e.g.
a ‘need’ and are normally not Teletubby toys had a 2-year retail
purchased with price being a major life.
initial motivator. These are the items
Produce special signs for
that can grow your bottom line, since
they should have a larger gross profit 3 non price sensitive lines.
than price sensitive product lines. In Customers purchase non price
the majority of retail situations, 80 sensitive products for reasons other
per cent plus of products stocked than price and so, to maximise sales
will fall into this category. of such items, you will need carefully
constructed signage to emphasise
Position non price qualities other than price.
2 sensitive lines carefully. Research tells us we remember
facts in groups of three and this is
Positioning is based on image. If
your customers come to your store a valuable guide when preparing
because price is a major motivator, your signs. The following is a proven
then price sensitive products should format for non price sensitive signs:
be displayed in major sightlines.
However, if they come because of

Name of product
your range, quality and service, then
non price sensitive products should •
Three bullet-point
be displayed in those key positions. •

benefits to the
Obviously you cannot display all • consumer

your products in prime selling


positions, so you will need to adopt a

Price
procedure where you rotate products Add-on selling line

in sightlines. Decisions in this regard to clinch the sale

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193
Train the team
Management Memo
4 to sell benefits.
Price may be an issue for your sales N owhere outside of the home furnishing
department is it possible to group so
ther
many different types of mechandise toge
team, but it is normally not an issue in lifestyle presentations. Lifestyle retai
ling
to the consumer in terms of non price allows considerable oppo rtuni ty for cross
sensitive products. For this reason, mechandising.
82

sales people should listen to the


shopper, identify the real benefits to
that customer, explain these benefits By placing the appropriate non price
—and finally get around to price. sensitive lines at the gondola ends
Training programs should include and the budget lines in the centre,
product benefits training and its you can achieve extra sales along the
importance in the role of selling. whole gondola.
End of Gondola Middle of Gondola End of Gondola
Understand customer
5 needs—then sell.
Non Non
Customers, when purchasing non price sensitive Budget lines price sensitive
price sensitive products, usually products products

place other considerations over price.


For this reason, you should:
Offer assurance. Your signs and selling
techniques should erase any doubts they
have. ‘Stroke’ them, so that they will feel
Remember, finally…
like winners by making this buying
decision.
Project quality. Be ruthless with your
7
Note these key points in managing
standards because, in today’s retail non price sensitive product displays:
world, quality is expected.
• Ensure the display is striking, yet in
Inspire them to buy. Group products in keeping with the style of the retail
themes, suggest uses for the products, outlet.
show how easy they are to use, and
• Communicate with your customers by
demonstrate the benefits.
providing information via leaflets,
Offer a complete package. Always think advertisements in newspapers,
‘link’ and offer a complete package. The recorded messages in the store,
customer has come shopping for literature near the cash register,
enjoyment and expects you to provide promotions on cash register receipts,
everything they need—including related and promotions on trolleys and
items. baskets.
• Let the display promotion spread into
Display products a storewide promotion. This is easily
6 to maximise sales.
The aim is to encourage customers to
achieved with theme selling for
spring, autumn, Halloween, and
Christmas promotions, but more
shop the non price sensitive lines and difficult with generic promotions by
search for the price sensitive lines. an individual company.
You may therefore need to • Prepare a promotion plan and record
reorganise your merchandising to all activities. You need to measure the
achieve this objective. success and failures of any activity.

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194
OPEN PRICING See also: 182

How to ‘open price’ your products

Products are priced in one of two ways. The majority are now
computer code-marked by manufacturers or the retail
supplier using a ‘number’ code or a ‘bar’ code system.
However, although in decline, the ‘open pricing’ system is still
in use in many small retail stores, where the retailer must put
the price on the product using a non-computerised system.
If using this approach, be aware of the following guidelines…

Select a price label that easily. The drawbacks with this


1 best suits your business. technique are two-fold—the price-
guns need to be maintained
When adopting a technique for
pricing your products, you would regularly, and ticket switching can
normally consider one of the be a security problem, although
following options: this can be combatted by using
tickets that are made so that they
• Felt-tip pens. These are usually a
tear in half if ticket switching is
quick-fire solution for marking
attempted.
cardboard cartons and paper
labels, for they are permanent and • Tie-on labels. These are ideal for
cheap. The markings do have plants and awkward items such as
certain drawbacks, however—they wheelbarrows. They are cheap,
deface the product, are not easily permanent and easy-to-apply.
erased or changed, and may also They come in various sizes and
detract from your desired image. the tags can be easily changed. A
disadvantage is that they can be
• Rubber stamp price markers. These
are also ideal for cardboard easily switched.
cartons and paper labels, for they
Adopt a consistent
are quick to apply. Unfortunately,
they don’t work on damp or dusty 2 labelling style.
surfaces, and smudging can be a Whichever method you select, it is
problem, often causing the price to important for the customer and your
be indecipherable. team that you are consistent. For
example, always price in the same
• Self-adhesive tickets. These are ideal
for any smooth, dry, dust-free position on the product.
surface. Tickets are cheap, easy to
Adhere to the rules
apply and can be printed with
your name. Labels can be applied 3 of product marking.
Basic principles apply in relation to
to the product via a small, easy-to-
use gun and prices can be changed the marking of your products…

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• Prior to marking prices, always Management Memo


check the price against the price
he prime function of the retailer is to
list.
• Ensure your price marking
T maximise profit. Pricing is influenced
by a number of factors:
equipment is accurately set up and • Competition in the product category in
works correctly. your catchment area.
• Price marks must be clear, easily • Characteristics of goods. Certain goods
read, and legible, not only by the are expected by the consumer to be more
expensive.
customer, but also by the checkout
• Availability of goods. Generally the more
operator. scarce the product, the more expensive.
• The best positions for pricing are: • Stockturn. A high stockturn means you
- On the top of bottles, jars and can lower the price, increase the stockturn
cans. and make more profit.
• Promotions. Both in and out of store.
- On the top end of boxes and
• Store Image.
packages. • Theft. 83
- On the top right-hand corner of
the front of paper sleeves and
blister packets. time. Consistency counts.
• Make sure that you put the price • Do not obscure vital customer
the right way up on all products. information with a pricing label,
Prices placed upside down will for this is a sure way to annoy
slow down the checkout customers.
operation.
• When pricing cartons, the key is to Be aware of security
be methodical, since accuracy and
consistency usually follow. For
4 pricing strategies.
Security pricing can help reduce
this reason, keep to a proven
pilfering. A professional thief will
routine, such as the following:
often attempt to sneak products
(a) Remove the outer wrapper
through the check-out by deliberately
and expose the goods.
placing items inside others—for
(b) Select the correct price on the
example, hiding smaller items at the
price gun.
bottom of pots, buckets, bins or
(c) Mark one entire layer.
similar containers.
(d) Place all the marked goods on
If you price on the outside of
display.
products, chances are the cashier
(e) Price mark the next layer of
may not look inside the item, for
products…and so on.
example, the pot. On the other hand,
• Make sure the price is clearly if you price inside containers such as
visible. Staff and customers need pots and buckets, the cashier has a
to be able to see the price at a reason to look inside the items and
glance. can then pick up the other products,
• Adopt a tagging policy that recording them at the checkout
always prices the products in the without causing any embarrassment
same location on the item every to either party.

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196
BUYING See also: 198, 200

How to buy effectively

Retailing is the process of buying and selling products. To be


successful, you need a policy that enables you to buy the right
product at the right price at the right time which then allows you to
sell it as soon as possible at a profit. Many businesses work on a
system where they calculate a 1 per cent increase on the buying
price for every month the product sits on the shelf in the store. All of
which means that the buying process is critically important for
retailers. Get it wrong and the result can be a loss.

Develop a positive attending trade fairs, group buying


1 relationship with suppliers.
You are your suppliers' customer
or co-operative buying, central office
buying, or through representatives
and the relationship you have with visiting your store.
them should be the same as the one Retailers today have a wide
you have with your own customers. choice of suppliers offering similar
It is a relationship built on trust. So products. To help you make the right
you should select suppliers you can decision as to which supplier to use,
depend upon when it comes to price, a decision-matrix can prove useful.
quality, value, and timely delivery. Consider the following example
provided by John Berens:
Select your suppliers
2 carefully.
Your
weighting
Suppliers' priorities
as you see them
Your customers select their retailers A B C D E F
carefully and you should select your
suppliers with the same care.You Suppliers can
often have a choice between buying fill orders 5 3 4 4 2 0 1
directly from a manufacturer or from Mark up adequate 4 2 4 3 0 1 2
a wholesaler. Whichever avenue you Customer requests
you stock it 1 1 2 4 3 0 0
source, your decision should be
based on such considerations as: Supplier supplies
fashion changes 3 2 3 4 1 0 0
• the type of product you are buying
• the origin of the product Supplier helps
• the size of your business promotes 2 1 0 3 1 2 2
• the proximity of the suppliers Supplier delivery
• the supplier’s policy on buying policy 6 0 1 3 4 3 0
• the financial status of the supplier and Journal of Retailing (71/7)
yourself.
• price. Score each supplier who you believe
Suppliers can be contacted in a has the same priorities as you. The
number of ways—via the Internet, by supplier with the closest weighting
visiting cash-and-carry wholesalers, to yours is the one to select.

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197
Management Memo
Plan your purchases.
3
Buying has to be planned and the
R esearch in the United States shows
that retailers look for the following in
selecting a supplier:
astute buyer will use the following • responsiveness to specific retailer needs
formula: • commitment to follow through
• flexibility
Planned Purchase at Retail Price =
Planned Sales + Planned Reductions + Planned End
• on-time delivery
of Month Stock – Planned Beginning of Month Stock • integrity and honesty
• good communication. 84
Remember that Planned Purchase at
Retail Price is not how much the
you need to add? What is the financial
buyer can spend. Once you have this cost for you to carry this stock for a
figure you will then be able to longer period? Do you have the storage
calculate a buying price and a budget space? Will you sell the entire purchase?
for your buyer. Will the supplier provide extended
credit? Will the supplier guarantee the
The table below will help you
goods? What assistance will the supplier
plan your purchases. provide to help you move their product
on to the customer?
Ask questions before
4 accepting bulk discounts.
5 Consider central buying.
Suppliers often supply discounts for
early bird buying and bulk buying. Larger organisations often rely on
Before taking up such offers, you will central buying using specialist
need to consider such questions as: buyers who, in theory, should be
Is it a slow moving item for you? What able to select better deals as they are
extra costs of handling and storage will specialists in their field.

PURCHASE PLANNER AUG SEPT OCT NOV DEC JAN SEASON


TOTAL
1. Planned BOM stock $197,919 $225,168 $243,811 $254,233 $243,880 $232,825 $251,500
2. Planned sales 48,273 54,919 59,466 55,268 87,100 44,774 349,800
3. Planned reductions 5,971 3,379 4,159 5,493 3,054 7,317 29,733
(total of a+b+c below)
(a) Markdowns 5,247 2,915 3,267 4,664 1,748 6,645 24,486
(b) Shortages 483 549 595 553 871 448 3,499
(c) Employee/other discounts 241 275 297 276 435 224 1,748
4. Planned EOM Stock 225,168 243,811 254,233 243,880 232,825 251,500 -
(BOM stock for following month)
5. Planned retail purchases 81,493 77,301 74,047 50,408 79,099 70,766 433,114
(items 2+3+4-1)
6. Planned cost purchases 45,392 43,057 41,244 28,077 44,058 39,417 241,245
(initial markup is 44.3%,
so cost is 55.7% of item 5)
7. Planned cumulative initial 36,101 34,244 32,803 22,331 35,041 31,349 191,869
markup (44.3% of item 5,
or item 5-6)
8. Planned gross margin 30,130 30,505 8,644 16,838 31,987 24,032 162,136
(item 7-3)

Ref: William Davidson, Daniel Sweeney and Ronald Stamp, Retailing Management

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FOREWORDCONTENTS PREFACE TESTIMONIALS
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198
STOCKTURNS See also: 196

How to manage stockturns

Two companies in the same town sell the same product at the
same price. One turns stock four times a year; the other sixteen
times a year. The second retailer concentrates on stockturn in
the belief that the customer should constantly be presented
with fresh product. The second business makes the bigger profit.
Stockturn is a key ingredient for succcessful retailing…

Know what you have Buy 100 yellow cushions to retail at


1 in stock. $12.95 and sell over a 10 week period.
This information must then be
Before evaluating your stockturns
you should have a best practice passed on to the merchandiser so
procedure in place for receiving that the product can be managed on
stock. If you know what you have, a 10-week cycle.
you will not over-order and will turn
Manage your stockturn.
stock more quickly. Plan ahead so
that you can anticipate new 3
Products therefore should have a life-
deliveries and schedule displays.
Storage is expensive so use span in the store; the key is to manage
specialised equipment to reduce that lifespan. Using the above
manual handling and ensure you example, the management program
have a delivery receiving area. Make for the yellow cushions would be:
sure the receiving area is clean, well Product: yellow cushions
organised, secure, and has easy Retail Price: $12.95
Volume: 100
access for delivery vehicles.
Stockturn: 10 weeks
Week Units to sell Accumulative
Make buyers responsible
2 for stockturn. 1
a week
10
total
10
Successful stockturn begins with the 2 10 20
buyer whose role is to: 3 10