As we wrote this post we stopped every once in a while to sing the theme song from the TV show “Rawhide.” The retail tie-in pertains to the refrain,
“Move ’em on, head ’em up; Head ’em up, move ’em on; Move ’em on, head ’em up… Rawhide!” That’s exactly what you do each time you take a markdown: Head ’em up and move ’em out.
At least that’s what we hope you do.
Consider the retailer who was convinced by a dubious financial counselor to invest $1000. The counselor promised that $1000 investment would yield $2,500 within 12 months, so the retailer handed over her hard earned cash
Three months later the retailer called the financial counselor to see how her money was growing. The answer was disappointing: her investment was down to $815, but the counselor encouraged her not to be discouraged. Another three months passed and the retailer called again, this time her $1000 investment was down to $488. Six months later its value was just $104.00. Not exactly a happy ending. This scenario happens in retail stores all across the country each year, maybe even in yours.
You might be that financial counselor if you’ve ever held on to merchandise far past its selling life, you’ve been there. Sometimes you hold on to product so long that it begins to fade, wear a little around the edges, and fall out of style. You might even have some of this merchandise on your sales floor right now. Here’s the thing: the fashion and seasonal items you carry have limited life cycles. You should never wait until shoppers turn up their noses and walk away from a display as the only hint that it’s time for a markdown. The basic items you need to stock every day can become shopworn and need to go too, even if it means reordering that same item.
Just because
you loved it when you bought it doesn’t mean that customers will too, and it doesn’t mean that it’s guaranteed to sell. We call buying things you personally you fall in love with the “halo effect,” which is dangerous to your bottom line. You need to make sure that your invested money works smarter and harder for you, supplying a return on your investment. Let’s look at the key areas you need to manage to move ’em out:
Calculate your Turn. Inventory turnover, or turn, is a measure of the number of times inventory is sold within a period of time, usually a year. The easiest to way to determine your inventory turn figure is to simply divide your last year’s total retail sales by your year ending inventory at retail value.
To achieve a better turn rate, you need to closely control your inventory. Be insistent about delivery dates, and implement a strong markdown program to clear out product that’s past its sell date.
Tell vendors when you want to receive your orders. Before you place that order ask yourself when the product actually needs to be in the store, and then tell your vendors what you need. It’s foolish to take late-season deliveries if that can hurt you, and it’s just as foolish to receive goods – and have to pay for them – far in advance of your actual need time. So request delivery dates. You won’t always get your wish, but if you don’t ask, the vendor will always get theirs.
It’s fabric, not wine. It doesn’t get better over time.To manage your inventory and return on investment (ROI), you need to know the age of every item on your sales floor and in your back room. When did it arrive? You don’t always have time to run to your computer or POS system to look it up. And let’s be honest, when was the last time you actually did that? Instead, adopt a system to mark each item with a “received date” code that allows you to instantly determine age without having to leave the sales floor to check a report. We like a simple bin ticket for this task.
Bin tickets are stickers that you place on each shelf or fixture to indicate the item’s designated home. Bin tickets should include the information that’s important to you, including SKU number, maximum and minimum quantities, price, cost (in code shoppers can’t decipher), vendor, and date code. The date code tells you when the item was received so you’ll know at a glance which products are selling and which are not.
Let’s say a customer asks for a particular item, so you lead the customer to the place it’s supposed to be. The bin ticket is there, but the shelf is empty. Or worse, the space has been filled in with another product. How long has this merchandise been out of stock? Is there more in the back room? How do you know? Here’s where our Dot System comes into play.
You’ll need a supply of small red and green adhesive dots. A green dot on the bin ticket means there is more of this particular available product in the back room. A red dot on the bin ticket means there is no more in the back room. No dot on the bin ticket means there isn’t any more of this product in the back room and this item is not to be reordered.
Train your associates to check the stock room each time they come across an empty shelf and a bin ticket with a green dot. This product is available and needs to be restocked ASAP.
Know when to take a markdown. Markdowns are not your enemy; in fact it’s smart retailing to ditch the dogs. Stores do not close because they had to take markdowns. They close when product is not sold fast enough to create the cash flow needed to cover expenses.
When taken on time, the first markdown is always the cheapest markdown. Clearing out merchandise before the price/value relationship is destroyed is critical. You should mark down items as soon as sales start to slow down.
Let’s say you have an item that’s currently priced at $25.00 but it isn’t selling. If you mark that item down to $19.99, its value goes up in the customer’s mind. If markdowns are not taken in time it will take much larger discounts to create value. Just ask an apparel retailer who’s trying to sell prom dresses at full price in July. Keep this in mind: Markdowns allow you to maximize your invested dollars. When you get those dollars back you can reinvest into newer items that will yield higher margins and better inventory turn.
One of your jobs is to be on the lookout for merchandise that’s past its prime, taking take markdowns as frequently as necessary to clear this merchandise. Sales on seasonal merchandise should start just before the season ends; waiting until after the season/holiday is over will severely hurt your return. Packing product way for next year isn’t a good idea either. Get the cash out of your investment and keep it working with new, fresh goods.
Properly display markdown merchandise. When you run a sale, run a SALE. Display the product near the front of the store or in its normal home. You can also use your speed bump displays to house this merchandise during the sale. Highlight the displays with banners or signs created specifically for the sale.
We’ve seen too many clearance areas that look like disaster zones; that’s no way to create value. Clearance items should be merchandised with the same care as regularly priced product. When running a clearance sale, display this product near the front of the store. After the sale move it to a small clearance area near the rear of the store so that shoppers have to pass through displays of new product to get to it. Clearly sign your clearance area so that shoppers will want to stop and check it out before heading to the cash wrap.
“Hot Spot” and “One to the Right”. Every section of every fixture has what’s called a hot spot; it’s the part of the fixture that sells product the best. To find the hot spot in any fixture, draw an imaginary cross through the center of the fixture – the hot spot is at eye level (about 5 feet 4 inches) where the two lines intersect. Customers tend to stop in the center of a display to peruse the product, so this area is easily seen. Use it to display important product you don’t want shoppers to miss.
Here’s an insider tip: Remember “Hot Spot and One to the Right.” Shoppers do a lot of things they don’t realize they do, like reaching for product with their right hand. This means that the position just to the right of the Hot Spot is also a strong display space. You can use this area to display new items or to energize product that’s still in its selling season but isn’t moving. It’s also a great place to house product that’s a tough sell.
Display impulse items at the cashwrap. A lot more happens at the cash wrap besides just ringing the sale; it’s where impulse purchases live. Load your cash wrap with product customers just can’t pass up. Think of the add-on sales possibilities! If you have a wall behind your cash wrap, use it to create displays that keep customers thinking about product – it’s also the perfect place to introduce new products
Cross-merchandising. Why just sell one item when you can sell two or three? Here’s where cross-merchandising come in handy. Display different products or categories together on the same fixture. Cross-merchandising helps shoppers easily visualize how the items will look or work together. This technique is always a safe bet for the speed bump displays at the front of the store.
Merchandise Outposts. The next time you are at a department store take a look at the product that’s displayed in the main aisles. Chances are you’ll find tables of product that’s not in its traditional home on the sales floor. These clever displays are called Merchandise Outposts; their sole purpose is to encourage impulse purchases. They make shoppers stop and think, “I need that!” Merchandise Outposts will work on your sales floor, too.
Maximize in-store signing. Signs act as silent salespeople, helping customers when no one is available to help. Women read signs for information; men rely on them to make decisions. And since 70 percent of purchase decisions are made in-store, your signs actually entice shoppers to buy. To be effective your signs must be three things:
- Easy-to-read. Use at least a 30 point font so shoppers can see them even without their reading glasses. Use both upper and lower case letters, all caps are harder for older eyes to read. Most books, newspapers, and magazines use a serif font because this type is easier to read. Times New Roman, Palatino, Georgia, Courier, Bookman, and Garamond are popular serif fonts.
- Easy-to-understand. The offer or item description on the sign must be is perfectly clear. Use small, simple words so the sign is easy to scan.
- Professional. Print signs on your computer on a neutral colored paper. (Know what neon paper says to a shopper? It says, “This stuff sucks and we can’t give it away.”). Use proper sign holders, not tape, to display signs. And unless handwritten signing is part of your brand, don’t do it.
Schedule in-store events and promotions. To move product and build community awareness you need to hold one MAJOR and one to two MINOR events in your store each month. Events are the one thing that can really set your store apart from the competition.
Major events – think open houses and semi-annual clearance sales – attract a large number of people to your store. Minor events, such as classes and trunk shows, tend to draw smaller crowds, but still take time to plan. We recommend that you plan your events out months in advance. We can help here, too. If you need event ideas, send us an email and put “Promotions” in the subject line.
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Move ‘Em Out: How to Sell What’s Not Selling | KIZER & BENDER’s Retail Adventures
Make product recommendations at the checkout. Upsell, upsell, upsell! Amazon’s product recommendation engine is absolutely brilliant. Just prior to me paying, Amazon splashes a host of closely related products up on the screen. The result? I end up shelling out more money than I initially planned. Right before your customers pay, upsell them on related products. Give them deals they won’t get anywhere else. Convince them that they have to have the warranty or the cleaning solution or whatever it is that you want them to buy. They are already in a buying mindset, which gives you a psychological advantage. Give products away for free If you’ve got a limited marketing budget you should seriously consider influencer marketing. Influencers are incredibly powerful because they serve as online referrals. If you can connect with the right ones, you can drives tons of motivated traffic to your website. Personally, I love using Instagram for influencer outreach because most people are willing to promote your brand simply for giving them the product for free. I use a simple process to find influencers: 1) Head over to http://websta.me/search and type in some keywords related to your product. 2) The platform will return the latest content with that hashtag. 3) Sift through the posts (this takes time) to find ones with high engagement. 4) Those highly engaged posts generally belong to someone who has a large, engaged following. 5) Most influencers have a contact email in their bio. If they don’t, you can send them a direct message.
Simply let them know you love their content and ask them if they’re interested in checking out your product, free of charge. This can be a lot of work on your end but I promise you, it’s well worth it. Take advantage of online advertisements Social media is a gateway to closing sales and promoting your business at an extremely affordable price. The beautiful thing is that it targets consumers suited for your store on its own. You don’t have to do anything. Just purchase the ads and let social media work for you. Many social media sites offer ad budgeting options, meaning you can set a daily budget (some start as low as $1), and then when your budget for the day is spent, your ad quits running. It’s a great way to stay within your means while still reaching out to potential customers online. Facebook ads are a tremendously effective way to find customers at an extremely low cost. I don’t want to hear the argument “my customers aren’t on Facebook.” Mark Zuckerberg posted a status a few weeks ago that announced Facebook had reached a new milestone. For the first time in the history of the network, 1 billion users were logged in at the same time. 1 billion users. Your audience is on Facebook, trust me. Build a community of loyal fans Invest your time in building a community of fans. If you own a business, you need to have a social media page, and you MUST work to build a following. People who like your page and share your page are doing your legwork for you, so it’s literally a free marketing tool where others work for you. Keep your social media up to date. Post upcoming sales, offer coupons, and promote new products on your page. Encourage your fans to share your information with others, and it will spread the word quickly about what you have to offer. Build email lists and run email marketing campaigns. There are tons of free email newsletter creators online that can help you design and email you fans. Create quality content Quality content on your page is one of the most important marketing techniques you can have. As in a brick and mortar store, your customers want to feel like they matter. Quality content that speaks directly to them, not down to them, creates that connection. Talk about what you believe in with regard to your products, and then tell customers why they need those products. If your content is just trying to hard sell customers, they’ll be just as turned off as they would with a pushy salesman in a store. Be creative, be genuine, and be yourself! Conclusion If ECommerce were easy, every joker and his mom would do it. It requires strategic thinking and careful execution. Small mistakes, like a cumbersome checkout process, can cost you serious cash. But with thoughtful implementation, you can create an ECommerce store that creates significant revenue for you.
User-defined fields (UDF) in Retail Pro allow you to track a virtually unlimited number of data elements. UDF and auxiliary fields can be completely customized to ensure you capture the specific type of data you need to inform, for example, your merchandising or marketing strategies. Capture customer preferences like favorite colors, styles, and activities to personalize your marketing campaigns, or arm your sales associates with access to those details on a mobile device so they can make meaningful recommendations. For example, a cosmetics retailer might track a customer’s favorite brand, shade of eye shadow or lip tint, or their skin type based on their transaction history, and can send special offers for those products when they shop online or come into your stores during their birthday month. Data analysis with calculated field
Calculated fields like total sales, total transactions, total units, and the total number of visits enable you to analyze your customers’ sales history and determine their lifetime value. Then, using that key criteria, build targeted customer lists to increase the effectiveness of your marketing across channels. For example, you can create segments to market to customers with total sales over $10,000 or every customer whose favorite hobby is fishing. Whatever your engagement strategy, Retail Pro gives you the tools you need to gather and analyze the customer data that helps you drive effectiveness and build greater loyalty and customer satisfaction. Retail Pro News: Learn the latest Retail Pro news and industry updates first.
Retailers know there is a major shift currently underway in the payment industry. More and more consumers are beginning to leave their credit cards at home, in favor of keeping digital versions saved in their smartphones. Through the use of technologies such as Apple Pay, Android Pay, and Samsung Pay, individuals can carry out everyday transactions without ever reaching for their wallets. Outside of being popular and trendy, these “mobile wallets” come with their own set of positives and negatives. There are a few major considerations business owners should take into account before deciding whether or not to support this new payment platform. Improved security over conventional card payments. Mobile wallets take advantage of technologies that provide more secure transactions. Individuals today are more security conscious than ever – the massive campaigns behind the EMV shift are evidence of this trend. Businesses that support technologies such as Apple Pay and Android Pay are on the forefront of card-payment security, or namely, tokenization. When your customers pay for a product or service using their phones, their financial information travels in an encrypted packet – a “token” – that is later decrypted by your software when you receive it. If a thief or fraudster were to somehow get their hands on your customer’s payment data, they will only have access to these tokens, which are useless without a decryption mechanism. Secure encryption features are just one reason consumers are switching to this new technology, and retailers who offer a mobile payment platform find that it frequently serves as an incentive for some customers to keep coming back their store. Shorter Customer Wait Times. Mobile payments are fast, especially when compared to a more conventional payment method. The scene in any rush hour New York Starbucks shop should be enough to convince anyone of the importance of cutting wait time. While those customers who pay for their morning cup of Joe with a card must hand their card to the attendant who then swipes the card through a reader, the customers utilizing mobile wallets just hold them up to the NFC reader and they’re done – fast and quick. Decreasing the time it takes to process each customer should be an attractive feature to any business with heavy foot traffic. Not only will businesses be available to service a larger volume of customers, but those customers will be generally happier due to lower wait times. In this way, mobile wallets can serve to increase customer satisfaction and retention.
Mobile payment fraud. On the flip side of things, accepting mobile wallet payments may pose a risk for some merchants. With the surge in mobile wallet popularity, fraudsters are focusing their sights on exploiting this technology to attempt to trick business owners into accepting fraudulent transactions. Staying vigilant and monitoring the transactions that come through your store’s account will help deter fraud. Employee Training and Systems Management. As with the implementation of any new technology to your business, it is impossible to ignore the time devoted to employee training. Because mobile wallets are an emerging technology, few employees will be ready and trained in how to service customers who pay with this method. As a business owner, you will need to set aside time to fully train your staff and to ensure that you know the ins and outs of the system yourself. By adding to the complexity of your system and adding new card readers you are also increasing the number of possible points in your business that may need troubleshooting. Be certain you understand the hardware and software system components and make sure your tech support person is available for the system rollout. Costs of Upgrading. In order to accept mobile wallet payments, your business must have a contactless payment-capable point of sale terminal. Retailers who have recently upgraded their POS may recognize that EMV comes in two major varieties for in-store payments: “contact” transactions, in which a chip card is inserted, or “dipped,” into a POS terminal, and contactless payments, where an EMV card or smart phone is waved near to an EMV terminal. Many of the new POS terminals offer both features, and range in price from between $100 and $1,000 per terminal – actual costs will vary widely based on your store’s needs. Generally, the more functionality a new contactless point of sale terminal has, the more expensive it will be. If your business already accepts credit cards, contacting your merchant services provider is the first step you should take. Your provider should be able to offer you cost-efficient ways to upgrade your reader to support contactless payment-capable readers, as well as provide you with any additional cost estimates and educational resources. Mobile Wallets Are the Future for Consumers and Businesses. A 2015 report from Forrester Research estimates that by 2018, up to 20% of US smartphone owners will be using mobile wallets. With such a large segment of the population utilizing this new technology, many customers will come to expect retail stores to support this payment method. As consumers begin to leave their wallets and cards at home, the only way for some merchants to accommodate sales will be by accepting mobile payments. Forrester Research’s report also points to an added advantage inherent in mobile wallets: marketing campaigns. Working together with app developers, business owners can help drive more traffic to their locations by pushing notifications to smartphone users through coupons, or other forms of advertising.
