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Reset and Rebuild a Department

Changing the product mix in your business

In the office of our store is a bulletin board on which we keep track of our projects, plans and goals. One of the groups of projects that this list contains, is merchandising ideas that we have either seen working in other retailers (not necessarily a hardware store) or that we have read about.

Many of these merchandising ideas come from ads in trade magazines showing a great plan-o-gram. We even keep a file folder of these ads. The list consists of ideas that we would like to do, ideas that we are working on, and a couple that we have completed. (The last group is left on the list to give us a feeling of accomplishment.)

Our list ranges from checking a four foot section to see if we have lost any stock numbers, to increasing a four foot section to eight feet and moving it to another location, or perhaps adding a new department to our store.

Some of our ideas have come from the grocery store or drug store next door. As they are both a part of large chains, we know that they have professional merchandisers constantly working on new sales ideas.

We have also added projects to our list after seeing new items at a show, or an announcement from a wholesaler listing a new product group that they have added to their warehouse. Unfortunately, sometimes we have had projects on our list which remind us to discontinue a section in our store because the sales have been disappointing.

There are always a number of ideas on our list. We have made a point of working to continually examine each of our departments to make sure that we have the most up to date, and complete selection of merchandise.

Because there are frequent changes in the retail market in our area, we must re-examine our presence in many categories. Years ago, we were the only retailer in our shopping center to sell a well known brand of household plastic products. Now there are three other retailers that have chosen to carry a much larger variety and color selection than we have carried. The presence of these new retailers has caused us to decide to diminish our selection in not only this brand, but in the housewares department as a whole.

As these reductions create open shelf space, we sometimes look to create a wider selection of related items in a department. When we discontinued our pet supplies last year, we decided to change from having only six items to having 8 feet of organic gardening and composting supplies. We have also rebuilt and enlarged our gadget (Jandorf or Servalite) products selection, and are in the process of enlarging our marine hardware.

We have in the past couple of years added new departments. Our three largest have been adding 24 feet of pool supplies, 16 feet of lumber, and 8 feet of child and home safety products. When we decide to add a new department, we do so slowly over several weeks. We do so by ordering only one of each of the items from our supplier's warehouse, so that we can experiment with how we want to set up the selection. Rarely, has the final product been what we had originally anticipated.

When we begin to rebuild a section, we first review the sales of our current selection by way of a report from our computer. Items which have sold only one or two in the past year, unless they are accessory or "part" items are quickly moved to the sale table and retagged.

Before we take a markdown price on the now discontinued item, we make sure that the retail price on the item is the most current retail and begin our markdown from there. The item may have gone up in price and we want to get the most from our final sale of this item. We have also found that having a retail price and a sale price before them, helps the customer to establish the value of the item.

As we are resetting a selection, we find that some of our suppliers have a rating system in their catalog to indicate which items sell better than others, and we rely on this information very heavily. We also have one of our suppliers that provides an occasional listing of the best selling items from each of their departments.

After penciling in the items that we want to continue to stock, we look for the highly rated items that we want to add to stock. We estimate the physical size and shape of the item, create a bin label, and establish a place for the item on our shelves.

As we are introducing a new product or department, we have found a few favorite ways of getting the attention of our team members and customers. One is the occasional creation of a feature end which is entitled "new additions". Usually, all items are at full price, and the quantity of each item is rather limited. We may have as many as two dozen different new items on a new addition display. We have also created feature ends that are exclusively from one department. With one display, it included a number of new items from our marine department, with the bottom half of the feature end consisting of one gallon containers of marine engine 50:1 oil mix at a special sale price.

Our other favorite method of promoting the new item is by offering a "bonus dollar" to our team members each time they sell the item. In this case, the item is displayed in the appropriate department, making sure that related items are stocked next to it.

Each of the bonus dollar items is displayed with a lime green sign, noting the features and perhaps a special price. The green sign is the tip off to our team members that they will receive a bonus for selling the item. To receive their bonus, they create a note card noting the transaction and give it to a cashier before their shift is over.

We believe that this constant examination of products and product selection is a key to our store being considered by our customers as a place to shop. And, it is important that our team members understand why we do it. Will we stop reworking the store? We doubt there is a good reason to.

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This article is copyrighted by Tom Shay and Profits Plus Solutions, who can be reached at: PO Box 1577, St. Petersburg, Fl. 33731. Phone 727-464-2182. It may be printed for an individual to read, but not duplicated or distributed without expressed written consent of the copyright owner.

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Profits Plus Solutions, Inc.
PO Box 1577
St. Petersburg, Fl 33731
(727) 464-2182
Fax: (727) 898-3179