Retailing Winners: Deep Discounters and Used Re-Sellers January 23, 2009Posted by David Dirks in Building Foot Traffic, business strategy, Increasing Your Profitability, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics, Sales Tactics.
Tags: beating a recession, business strategy, buzz marketing, differentiation, fighting a recession, increasing profits, increasing revenues, market differentiation, recession strategies, retail sales, revenues, sales, sales strategy, Sales Tactics, small business sales
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We should have seen this one coming. While most of retailing struggles, there are those who are doing just fine, thank you. I noted a recent cnbc.com report that told the story of Family Dollar Stores with quarterly profits jumping 14% in the 4th quarter of 2008. Deep discount stores have for a long time been the butt end of business jokes but no more. If every dog has its day, then this dog is having a good one. Mind you, stores like Family Dollar and 99cent Power have always done well and only just increase their sales and profit tempo by several fold in tough times like this.
Gamestop is another interesting retailing story. They sell both gaming hardware and software but with a twist: they also re-sell used gaming equipment and gaming software. Just think of it. When some people move up to the next system or change systems, they are often stuck with a substantial inventory of gaming hardware and game cartridges. However, they realized that there is a very vibrant and growing secondary market for this stuff. So they buy it outright and re-sell it at good profit. So far, the kids can’t get enough of this stuff and keep buying and selling. Gamestop also offers a discount off of new games if you bring one in for trade. Either way, they make a good profit.
You might be familiar with a franchise called “Play It Again Sports” that buys and then re-sells used sporting good equipment of all kinds. What an idea! Take the stuff that we who have kids seem to accumulate in droves, buy it on cheap (we just want to get rid of it not realize an ROI!), and re-sell it to folks who are smarter than we are (because they can buy sports equipment in excellent condition for a fraction of the cost we paid for it). It’s a great play but especially in times like these where every dollar spent is measured carefully.
What can we learn from these retailers? Here are a few questions I’d be asking myself:
- What part of my business could take advantage of this concept of offering deeply discounted or re-selling high quality, slightly used products? For example, if I owned a retail shop that sold hi-tech equipment (think like a Best Buy but on a smaller scale), I might seriously consider buying slightly used, ‘late-model’, high-quality equipment from folks who are looking to unload it for cash.
I’m not suggesting here that you sell junk. Leave that to the yard sales to move. Instead, you are creating another source of incremental sales revenue and profits by way of offering a less expensive alternative to ‘new’. Don’t worry about selling the new product as there will always be those who will only buy new…however, in these times there are a lot less of them.
- Don’t get hung up on the concept of selling slightly used products. Don’t let your pride get in the way of your ability to DRIVE TRAFFIC TO YOUR STORE. This is about creating another level of differentiation that customers will value.
- Set up a distinct area of your store or website that offers the re-sale product and promote the heck out of it. Nine times out of ten if it doesn’t work, it’s because it wasn’t promoted every way possible. You can build it but if they don’t know about it, they won’t come.
- You have to let folks know you are a buyer of product. You have to market to the people who own the product you want to resell. If you promote to sell product, you also have to do the same to buy it.
- Buy low, sell high. Establish an idea of what the used product goes for on the market given different levels or grades of quality. Ebay is a great place to start. Look there to see what used items in that category are going for.
- Set high quality standards for the used products you buy. The good news is that you don’t have to buy anything that you deem junk. Set standards for quality (and safety) that anyone could use to measure whether a used product is worthy of you buying.
This concept of re-selling slightly used product or deeply discounted new product doesn’t fit every business model. Remember, this is about giving customers and potential customers a reason to come to your store (or retail website).
Retailer Strategies: Beating the Big Boxes December 20, 2008Posted by David Dirks in Building Foot Traffic, business strategy, Buzz Marketing: Lowest Cost/Highest Payoff, Marketing Buzz, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics.
Tags: beating a recession, business strategy, increasing revenues, market differentiation, marketing, promotion, public relations, sales, sales strategy, Sales Tactics
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A regular reader of our blog, a marketing director of a two-store retail operation, recently sent me this note:
“I have stumbled across your site via Google, and have found many useful tips, and ideas to use in our day to day operations with my previous employer in the retail industry.
I am now in the retail world, and although similar in the “customer focused industry”. I am finding it harder to come up with ideas to draw in foot traffic for our unique, upscale home & garden boutique. We capture e-mails & information, send out mass e-mails with flyers, intimate wine & cheese events that have a store wide sale during that event. I’m in the process of creating a newsletter for launch Jan 1, and our owners are constantly running a sale of some sort (which I think devalues the product if there is a 15-25% off sale every day).
Do you think you can help? I need something that will create a buzz quickly, our owners want fast results…”
I called her and we had a nice chat. For the most part, she is doing many things already that will pay bigger dividends as time goes on. She’s new to the retailer she works for now and has some excellent marketing skills. After our conversation, I sent her an email recapping some of my thoughts.
I thought you might find them helpful, so I’ve added my summary to her below:
Thanks again for taking the time to chat with me today. We’re glad that you’ve found the “Running with the Big Dogz” blog helpful to you.
I thought it would be good just to quickly recap a few items we discussed:
- It seems that you are already creating additional customer value by developing your newsletter and adding other ‘event’s’ to your store schedule.
- Increasing the number customers that are added weekly to the customer database will become more critical as time goes on. I would recommend capturing all customers, even those who are from out of town. You can still send them an electronic version of your newsletter if the newsletter is packed with tips & advice on gardening, basic skills, etc. The out-of-town customers will be your internet customers of the future.
- Your strategic advantage against the big box competitors in your market is your ability to drill down to the customer level. The big boxes have no customer level tracking whatsoever. If you capture POS data for every customer, you’ll soon have a treasure trove of demographic and buying data that will help you refine your product/service set as well as target very customized offers to your customers based on their historical buying habits.
- Web-based sales should be a high priority and acceleration of for expanding sales/service via the internet is key. You indicated that they had already begun some minor commercial expansion of the website but I would make it a much higher priority than it is. Internet sales may or may not overtake your in-store sales but the goal is to add incrementally profitable revenue streams.
- Your ‘girls night out’ program sounds excellent and we discussed creating a similar package for the men too.
- I highly recommend reducing or cutting completely any marketing spend on flyers or ads in free distribution periodicals. As I noted, it might be better to spend that money on more ‘one-to-one’ marketing programs like your demographically target events, targeted direct mail offers, and more investment in commercializing your website.
- We also discussed the alternative of possibly empowering your sales team to offer an instant X% discount for buyers who need just a slight push to make the sale that day. It may be a much more constructive way to offer a discount ONLY IF NECESSARY to keep a customer from walking out. It might be more effective than the constant “gotta sell everything today at a discount” mentality. The caveat is that if the “deep” discounting works and your profit margins remain stable, then it may make sense to keep doing it.
- To get more mileage from your PR marketing efforts, especially for your special events, I’d call and develop a relationship with the business editors at the major paid circulation newspapers and other periodicals.
- One of the best ways to help ‘sell’ a marketing proposal is focusing on the benefits (not the features of the program) and use real examples from other high performing businesses to demonstrate that the concept has a track record of success.
Based on what I heard today, you are on the right track and are doing the things that will provide you with the recession-resistent flow of business. It will take time but it will come. Keep up the great work!
Have a burning marketing and/or sales issue? Feel free to email me at email@example.com and see if together we can come up with some ways to solve it.
Driving Retail Sales: Layaway Plans October 23, 2008Posted by David Dirks in Building Foot Traffic, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics, Sales Tactics.
Tags: beating a recession, driving retail sales, driving retail traffic, layaway, sales strategy, Sales Tactics
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It seems like a hundred years ago but there was a time when credit cards were not the ‘cash’ of the day. When your or my mother wanted to buy something that was an larger purchase than usual, they did it on the layaway plan. Layaway? I’m sure if you ask some high school or college students what a layaway plan is you’d get some blank stares. Better yet, try finding a retailer who bothers with offering a layaway plan. Therein lies your opportunity.
In the economic climate we’re in now, people are rethinking how they make purchases. You can help by offering a layaway plan (assuming you don’t already have one!) to your customers. You simply allow them to make an initial deposit on the total purchase and then weekly, bi-weekly, or monthly ‘payments’ in cash until the merchandise is paid. No interest and you can determine the standard amount that is needed to start the plan…say 20% of the total purchase price. Then you can determine just how long you’ll stretch the payment. Maybe you stretch it from as little as 3 months to 6 months and let your customer choose which payment plan they want. Once the plan is paid in full, they get the merchandise.
The layaway plan is great for larger purchases, especially those made before the holidays kick in. Considering how few retailers actually offer layaway plans, this is an opportunity to promote and give customers and prospects a chance to make purchases that won’t put them on the plastic.
This is a great way to help you sell in a season were people are wondering how they can afford to buy. It’s also a great way to differentiate yourself from your competition who doesn’t want the ‘bother’ of offering a layaway plan.
Driving Retail Sales: Groo’s Shoes October 22, 2008Posted by David Dirks in Building Foot Traffic, Local Brand Development, Marketing Buzz, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics, Small Business Advertising.
Tags: cross promotion, driving sales traffic, marketing, marketing strategy, promotion, retail sales, sales, sales strategy
If you read this blog long enough, you’ll get the hint that creating a growing and profitable business comes down to creating a business that can differentiate itself from the competition. If I had one key word to describe the process of marketing and selling, ‘differentiate’ would be all the word I’d need. The Big Dogz know how imperative it is to keep creating and refining the ways you can differentiate your business from the crowd. The only crowd you want is the one that will beat a path to your door.
I make it a habit to scan my local paper, The Times Herald-Record (www.recordonline.com) to see what kinds of advertising creative and marketing campaigns are out there. Just today, I found a local shoe retailer who’s been in the business for many, many years with their latest ad. When I saw it, I immediately said to myself, “That’s the kind of event that helps to position a local store like Groo’s Shoes in a different light with its customers.” And create new ones.
Like many local hometown stores, Groo’s has to compete successfully against giants like Kohl’s and Target. Groo’s probably knows that it cannot compete soley on price against the giant chains. What the ad below shows is clearly an effort to create the kind of shopping experience that you can’t find in the big boxes.
So here is a local store that gets it. As I scanned the pages of the newspaper, this ad just naturally popped out. It was located in a sea of similar sized ads but stood out and looks to be a great event that might just create traffic to their store. The point is, they are making the right effort to create differentiation in a tough retail market.
While that is all good, there are a few things missing here. The website doesn’t promote the event! To get the most mileage from your advertising, you’ve got to integrate all of your marketing together. Your ads promote not only the event, but should push customers and prospects to the website for more information. Maybe a special offer only available on the website but connected to the “Girl’s Night Out” would have been a great way to leverage the marketing tools that Groo’s already has available.
Other than that, this is a classic example of creating unique events to drive store traffic. The enticement of free High School Musical 3 movie tickets is a great tie-in. If they keep on track and continue to create events like these (not like the usual ‘sales days’ crap you see most often), they will continue to build their local brand. Good stuff.
Locating Your Retail Store July 4, 2008Posted by David Dirks in Building Foot Traffic, Retail Locations, Retailer Store Strategies.
Tags: business locations, foot traffic, retail store locations, retail store strategies
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How many times have you passed a retail store location that seems to be a revolving door for businesses? I noticed them all the time. It’s the location that has a business for a few months…maybe even a year or two, and then, gone. The ‘for lease’ sign is up the next day and soap covers the windows so you can’t see in (what’s the deal with that?). A couple of months later, a new store selling something different steps in. And the saga continues.
Finding a good location is more than a trick, it’s a science. Many times I’ve seen locations with thousands of cars passing each day but to no good end. Of course, that’s what the landlords are selling…the traffic. “Look at all that traffic that passes by this location each day!”, they’ll say. They may even have some recent traffic studies that back their claims up. Good for them. Not necessarily good for you. If one of the pillars of retail success is ‘location, location, location’, it’s one you have to get right the first time.
Why is it that a location with lots of real traffic can’t seem to work for anyone for any length of time? After studying this for years, I’ve got a couple of reasons for you. First, the location may not have good access from the high traffic road it’s on. This is especially true if the location is on a road that has a legal speed limit that’s higher than 45 mph. Nobody stops unless they have to. Or there may be very limited parking on this high traffic site. Secondly, it may be on a what I call a ‘commuter’ road. This is a road that has high traffic volume in the morning and evening rush hours. Here’s the challenge though: lots of traffic but commuters have one thing on their mind and that’s getting to work (whether they want to or not!). I’ve seen plenty of come and go bagel & coffee shops fall for this one. It would seem logical to put such a store on a high traffic commuter route and it is logical. However, the key is where you put your bagel store along the commuter route that is critical. Now, I don’t have scientific evidence but I do have some experienced insight here. Commuters like to get their morning bagel or coffee at a location not far from their home or at a location that is just a few minutes before they arrive at work. If you open one in the middle, you’re stuck. Don’t believe me? Just study it. Observe what bagel/coffee shops seem to do well and which ones are rotating through that location like every couple of months. Enough on commuter locations.
Another reason that locations can fail is that people can get sold on ‘cheaper is better’. When given a choice of locations and not a whole lot of funding, many business owners will opt for the cheaper lease payment and take a less desirable location. It happens all the time. Just because someone decided to build retail space at a particular location doesn’t mean they knew what they were doing. Or they were ‘on to something’ about that location. There are plenty of retail spaces that have been built or being built in locations that are just plain awful. Sure, the numbers on the surface might look good, but traffic numbers are not the big picture or the only thing.
Of course, if you don’t have a good business model with a compelling reason for people to visit your store or you’re operating from a shoe string, it doesn’t matter how great the location is. I’m certain a great many of the business that go in and out of business fast are in that category.
Here are some basic questions that I’d ask any landlord right from the get go:
- What kinds of businesses were in this location before? How long were they here? Why did they go out of business?
- How long has this location been vacant?
- Do you have traffic studies that I can see?
- How many tenants have you had in this location in the last 24 months?
Questions to ask yourself:
- Who are my customers and where do they come from? How does that relate to this location?
- Have I asked any of the other tenants that are in the area how the location is working for them?
- Does the traffic seem to visit this location? Is it easy for a traffic to get on and off this location? Is there enough parking available?
- Are there any planned construction projects (check with the local municipality) near this location in the next 12-18 months? If so, what will the impact be on this location?
- What new construction projects (if any) are already going on in this area? Are they retail? Office space? Warehousing?
- How far are the neighborhoods (urban or suburban) from this location? What kinds of neighborhoods are they? Upscale, downscale, mix?
We could go on but this is a blog. Again, first comes a solid business plan that has a compelling business model built into it before you worry about a location.
Have a comment or question about this subject? Feel free to email me at: firstname.lastname@example.org and we can chat about it or you can respond to this blog!
Increasing Deli Foot Traffic in a Declining Market May 15, 2008Posted by David Dirks in Building Foot Traffic, Retailer Store Strategies, Sales Strategy/Tactics, Solving Business Problems.
Tags: economic slowdown, fighting business recession, increasing foot traffic, increasing revenues, sales slump, the deli business
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In the building I work in, there is a nice little deli that serves breakfast and lunch. While they have the advantage of being a monopoly service business within the building, the also suffer from the not-so-infrequent moves of tenants. Right now, the building tenant situation is that they are losing tenants and therefore, a good chunk of their existing deli customer base. Having talked with them, the deli owners have taken a big hit in their daily revenues.
So what did they do to counter this sales trend? First, they reduced expenses wherever possible. They reduced staffing to the size necessary to adequately service the current flow of business. This is a good and basic counter to lower revenues. Then, in order to stabilize revenues they did the next worst thing: dramatically raised prices on common items. The prices of coffee, soda, and other commonly purchased items have been raised by 50% to 75%. Like no one would notice!
Why is that the wrong policy? Well, they weren’t underpriced to begin with. They were always considered a bit more expensive than the deli you’d have to drive 5 minutes to from the office. Premium pricing was their deal…why not…they have a monopoly in the building, right? Not so fast bucko. The remaining customer base that has always frequented the deli notice right way. When a bottle of flavored water goes from 1.50 to 2.00 overnight, people notice. I’ve talk to a bunch of folks here that have decided not to frequent the deli anymore. The deli owners have reached what I call the maximum elasticity of their pricing…they have gone over the line in trying to desperately stabilize their revenues in the face of significantly lower foot traffic.
So, what could they do differently to stabilize their revenues? Three things come to mind for this posting:
1) Reach out to the many who do not frequent their deli or don’t use it at all. Never assume you have 100% market penetration. In this case, there are still several hundred people in this building. My guess is that only a small percentage actually use the deli on a regular basis…less now with more tenants moving out or reducing headcounts. This calls for creating a compelling reason for folks to venture out of their cubes and come to the deli. Outside of being the only deli in the building and having high prices on everything, there’s not much to compel the brown-bagger to come in and buy a sandwich once a week. Once they have created some compelling reasons for people to visit them, then the task is to insure you have ways to communicate those compelling reasons.
2) Stop the price increases. Making your remaining customer base pay for your lack of foot traffic is not a winning strategy. In fact, I’d be willing to bet that in the long run, the higher they raise their prices…the less revenue they’ll get. In stead of keeping customers, they’ll drive them away. It’s cheaper to go down to the local grocery store and buy in bulk what you need for drinks, snacks, etc. if you don’t want to pay those ridiculous prices.
Raising prices in the face of dwindling foot traffic and sales is the easiest and dumbest thing you can do. It’s like hitting the panic button without realizing that there is still plenty of business to mine from the area. In this case, there are plenty of people still here in the building to more than make up for what sales they have lost.
3) Now’s a good time to start a simple customer loyalty program. How about a card that gets punched everytime you make a purchase over $5? Or get 10 coffee’s on your punch card and get a free (you fill in the blank)?
Using Trial Offers to Combat Slower Sales May 5, 2008Posted by David Dirks in Building Foot Traffic, Sales Strategy/Tactics.
Tags: sales strategies, Sales Tactics, trial offers
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I’m starting to hear the budget wheels moving…only to tighten. You don’t have to listen too hard to find many business folks rumbling about smaller budgets…budget cuts and the like. And they are hearing it from their own customer base. Even if customers are good financial condition, the smart ones pull back on spending when times get tougher.
One way to combat the budget constraints and general purchasing wariness, especially on high ticket products or services, is to offer customers a trial offer. You see the trial offer used all the time in cases where the product purchase is significant.
A trial offer does several things:
- Gets wary customers interested in testing your product without the risk of purchasing first.
- Trial offers attract interest and can spread via word of mouth…especially if your product does what it says it does.
- A trial offer acts as a way to strengthen your reputation by virtue of the fact that you are putting it all on the line during the trial. A trial offer says, “hey, don’t take our word for how good the product or service is…you make up your own mind.”
- Builds sales where you would have none before. If a customer is in need of your product or service and the trail meets or exceeds their expectations, nine times out of ten, you’ve earned a sale.
Like the 100% no-questions-asked money back guarantee, the trial offer builds consumer confidence and sales.
Building a Compelling Business April 25, 2008Posted by David Dirks in Building Foot Traffic, Sales Strategy/Tactics, Solving Business Problems.
Tags: brand, building brand, compelling business, driving store traffic, sales traffic
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It doesn’t matter what kind of business you have, people need a compelling reason to do business with you. Webster’s defines the word compelling to mean “having a powerful and irresistable effect”. Long term business success is built on this one and all-powerful word. Creating a business that provides people with a compelling reason to do business with you is not easy but also not complex either.
Businesses fail every day for a variety of reasons but the one that seems to burn the brightest is a lack of compelling reasons for people to buy their products or services. Location means nothing if you don’t have a stable of compelling reasons for people to drop their money there. Now more than ever, your business needs to be compelling.
Here are a few questions you need to ask yourself:
- What am I offering that can compel people to do business with me? If you can’t answer that question, convincingly, the good news is that you move up from where you are today.
- What would make someone drive to my store or office, regardless of how close or inconvenient my location may be?
- What is my most successful competitor doing that compels people to spend their money there?
How do you know if have a ‘compelling’ problem?
- You struggle to build foot traffic.
- Your phone is dead…as in there is no business callining in.
- Your store traffic can never seem to move higher than what it is today. You can’t seem to find that next level that will enable you to grow your business.
- Or, worst case, you’re about ready to give up because you can’t generate enough revenue to make a go of it.
The secret to creating a compelling business model is really no secret at all. Building a compelling reason for people to do business with you starts with this:
1. Each morning, before your day begins, ask yourself this: What can I do today that will create a compelling reason for people to do business with me?
The secret is this: ask yourself that question every day and then be sure to do something about it, every day. Time is the archilles heel of many business owners. Once the business day begins, all other things seem to take over. The next delivery crisis, who didn’t show up for work today, or whatever else sucks up our time.
You’re probably asking yourself right now: What is a compelling reason for people to do business with me?
A good and fair question. However, there is no ‘silver bullet’ here. There are all kinds of things you could probably think of, many of them written about in this very blog you’re reading now. I don’t know your business but you do. Here are some things you can do to help insure you have an answer to the ‘compelling’ question:
- Start with your own head and think in and out of the box. Make a list of ways that can help you develop many ‘compelling’ reasons for people to do business with you.
- Then, without sharing your ideas with anyone else, ask your customers and friends on what you could do that would draw business. You’d be surprised just how many good ideas you’ll get from people you know but you’d normally never ask. Especially your customers. Ask them why they shop or do business with you.
- Ask your employees for help. I don’t care if they are well paid or minimum wage earners, everybody can contribute. “What could we do to create a number of compelling reasons for people to visit our store or buy our services?”
- Check on your top competitors. What reasons have they created that compels people to prefer to do business with them? Is it the best selection? Consistently superior service? Best prices? Hard to find items? High quality technical expertise? A 100%, no-questions asked money back guarantee? Delivering more value for each purchase than everybody else? Better marketing communications with customers after they leave the store? Special contests, workshops, seminars, or other regular events to create excitement?
There’s another secret to creating compelling reasons for people to do business with you: make sure people know about them…don’t keep your compelling reasons a secret.
For the next seven days, ask yourself every morning what you can do to create another compelling reason for people to do business with you. Do it every day and make it a habit. Over time you will create a business that is built on a fortress of compelling reasons. You can take that to the bank.
Relationship Marketing: Skate Boarding Shop November 30, 2007Posted by David Dirks in Building Foot Traffic, Public Relations Strategies, Retailer Store Strategies, Sales Tactics.
Tags: contact management, managing a business, retail store, skate board shop
Good grief. I was at my local ski shop the other day, picking up our ski rentals for the season. Right next to the ski shop is a skate boarding shop. While waiting for a few things, I decided to walk over and take a look around the skate shop. I encountered the owner and we chatted a bit. I asked him how business was going and things like that.
Of course, it didn’t take too long for me to ask: do you collect any information on your customers when they come in to shop and buy products? Simple things like, name, address…and email? Let’s see, skateboard shop with twentysomethings and tweens who frequent the shop are into email and instant messaging, text messaging…it’s their way of life.
His answer: No, we do not collect information. And he said it as if, well, we hadn’t thought about that. Me: how about if you host a special event here at the shop…wouldn’t it be easy to email your customers about the event? How else would they find out about it? What if you started a free electronic newsletter and offered that to all who are willing to share their email address? Wouldn’t that be a great way to maintain contact and build a relationship? What if you had a special sale…just for those on your email list?
I could have went on and on with ideas to promote his business but I stopped. It was clear he wasn’t getting it. I did offer that you didn’t need to have some fancy PC database management software to collect customer data…how about a simple 3×5 card that has the name, address, phone, email of your customer? Just simply ask them at the point of sale. Most of the time they’ll say ‘yes’, of course. Especially if you tell them that they will receive a free newsletter on skateboard, ‘invitation-only’ events, special sales, etc.
I look a the expression on his face. He’s not buying it. I’m apparently not selling it well, either.
We grabbed our ski rentals and headed out the door. Of course, I’m thinking: here’s a guy with a store, hidden off the main street, that needs every bit of promotion and customer relationship building he can get…and he doesn’t see the need to start building a relationship by maintaining contact with people who might drop into his store. Small thinking. Too bad.
Increasing store traffic and sales per square foot October 18, 2007Posted by David Dirks in Building Foot Traffic, Increasing Your Profitability, Sales Tactics.
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One way to increase store traffic, regardless of how small or large your square footage, is to create a bargain bin and go deep. Select slow selling inventory, or buy low-cost but popular utility items and place them in a well noted area DEEP WITHIN YOUR STORE. Make people have to walk through the entire store to get to your ‘bargain bin’. Make sure every time you advertise, you mention your bargain bin. Bargain bins can add value only if the merchandise is priced well but not below cost. They work if you constantly add to the bin, keeping it fresh with new product.
Your goal is to make sure that each customer has a chance to see other high-margin items or ‘sale’ items on their way to the bargain bin. The combination of picking up more sales per customer and moving low margin merchandise at high volumes mean more overall profit for you.
The key is to make your bargain bin worth making the trip for. It should take on a life of its own. I’ve been to many retailers who create the bargain bin but forget to keep the inventory full and fresh. What you have then is nothing for anyone to get excited about. People want to know that there is a possibility of ‘discovering’ some exceptionally well-priced merchandise in that bin. The search for the customer almost becomes more fun than buying the product itself.
I don’t care what business you’re in, you can do this and be on your way to increase both your store traffic and sales per square foot. Oh, and if you do it right, you’ll improve your profitability too.