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Using Signs and End Caps

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We have heard an old theory that an end cap on a major aisle should sell as much merchandise as half of one side of the same counter. Our four foot wide end cap should sell fifty percent as much merchandise as the sixteen foot counter that it fronts. This theory appears to be held in high regard with store remodeling trends as end cap displays play a key part in the retro-fits offered by hardware wholesalers and trade associations.

We are frequently reading reports that detail new information regarding merchandise selection, pricing and signage for end caps as well as similar ideas for merchandising the rest of the store. The reason for our studying these reports is to increase sales, profits, and meet the competition of the warehouse stores.

With this new information, we have taken a bigger interest in improving our merchandising. We have greater expectations for sales and profits through our renewed efforts. One of our new expectations deals with our sales ticket average. We find that with our having over 300 customers each day, we need to make more effort to increasing our average ticket sale.

One of the ways we are making an effort is through employee incentive. Each day in our class room, we post the monthly sales to date, the number of customers to date, and the average sale. As we work towards our goal of increasing our average sale by $1.00, our employees realize that even an increase of 30 cents per customer will make a difference of $2,700 in sales total for the month. To reward our employees when we increase our average sales for any month over the previous month by $1.00, we will them and their family to a steak dinner. So far, we are very impressed by the idea that all of our employees have these numbers memorized each day.

Thinking that we have given our employees a good incentive, our attention is then turned to providing the tools on our sales floor so that we can accomplish our goals.

The first of our efforts is to redesign our end caps and reconsider the merchandise that we select for them. Jessica, our cashier supervisor and display builder, decided to call in some help in trying to spruce up the displays. Going next door to the grocery store, she met and visited with their merchandise manager and store manager, asking for their help with her display work.

It has been only a couple of weeks, but it is easy to tell where our new displays are. As Jessica begins to rebuild them, we have departed from the old guidelines that we have followed for years. Bulk merchandise items, such as mineral spirits or windshield washer fluid, are no longer stacked in cartons. Accessory items are being added to many end caps. The merchandise has a new look; a fuller selection, fresher appearance, an up to date style, and it looks easier to pick up an additional item from an end cap while the customer is shopping.

Roque, another of our team members has mastered our new Insignia sign making machine, and new style signage has been added to each display. Some signs give only price, while other signs give suggestions -buy two, this item makes life easier, or announcing a new item on the market.

Another new idea of merchandising has been applied to all of our departments. Last year, all of our counters had merchandise no taller than 5 feet high. Anyone taller than 5 feet could see all across the store. Now we have merchandise on a shelf at the 5 foot mark. You can no longer see across the store. As you walk down an aisle, the selection looks fuller and more complete. All of the bulky and most expensive items on an aisle are now placed on this top shelf.

We have also extended our new signage program to these aisles. Roque and his new machine have created a sign which invites our customer to compare our prices with our competitors. This special sign shows the picture and price from our competitor's ad, as well as our price which we will make better or equal. At this "moment of truth", the customer sees our store as being competitive.

Surprising to us have been the comments from our customers. Our customers have asked many of the team members if the store has new owners. Customers that know me as the owner have been very complimentary.

The surprise to us has been that we have little more merchandise in the store than we did last fall. We have spent several weeks clearing out departments of old merchandise, placing the items at the front of the store on large tables with giant signs of $1.00, $5.00, and "Make us an offer". Every time the tables sold down, we went through the department for additional clearance.

By building these top shelves and moving merchandise to them, we have made room for additional sku's. However, we have been good stewards of our open to buys, and have given up unnecessary depth of some items to pay for the new ones. Our accountant tells us that it looks like smart merchandising and some "smoke and mirrors".

Since last Thanksgiving, we have experienced sales increases of an average of 14% per month. We now find that in addition to shopping for additional sku's, we must watch our inventory levels more closely to decrease the number of outages we experience each week.

Of course, the question we have asked ourselves in our staff meeting is "What has caused this tremendous sales increase?". Our collective answers have been to credit the new merchandising format, the new services we have added, our new end caps, and the signs that look sharper than our old handwritten ones.

Of course, we will never know which one is the primary reason, nor will we try to find out. But, we are glad to have tried each of them and we will continue to improve on them. We are one happy bunch of team members enjoying our group efforts and successes.

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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