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How to increase retail sales within same footfalls

November 5th, 2011

Sharpening selling skills and increasing service standards has never been as important as it is today, considering the current downturn and footfall being far below what it was the same time last year. The average buy per customer has also fallen.
The following is the burning question that is the key to sustainable sales and maximum results: -

How do we increase sales within the same footfall and increase the ticket size per customer?
You may not be able to guarantee an increase in footfall, but you can surely increase sales within the same footfall. The following are a few pointers in that direction: -

Sell higher-price-point products to customers

Customers are price-sensitive no doubt and to address that, we have a reasonable portfolio of products that can satisfy the needs of the customer. At the same time, we also stock aspirational products that are at higher-price-points. The trick is to create a zone for the customer whereby he feels comfortable with the presence of products at both ends of the price spectrum. Eventually, the decision on choosing should belong to the customer. A good salesman should be able to highlight all the necessary elements for sale in a manner that is pleasing, honest and convincing. Most customers will graduate to aspirational products if they believe that the decision was entirely theirs.

Focus on selling the additional product (Coordinate-sales)

The advantage of sporting a reasonable width in product line also empowers the sales man to sell co-ordinates. The challenge for the salesman is to ensure that the customer is brought up to date about the range in the store and kept fully informed on the brands. This would induce further buying.

Thus, a salesman can achieve higher sales. For example, if the footfall in a store is 300 customers a month and if the salesman can induce 25% of these customers to buy 1 more garment than what they originally planned, an extra sale of 75 pieces is then straight away registered.

Sell at least one accessory per 5 bills

There has to be a clear focus on accessories eg. caps, belts, handkerchiefs, ties, flip-flops, etc. Accessories are presently the least focused-on by many of the stores and it is curious that even customers do not give them much importance. However, if you do suggest any accessories to him, say handkerchiefs, caps, belts, undergarments etc., the customer many a time, will not resist. This is typical of a customer not ‘sweating the small stuff’ in his purchase. At the end of the day, it is a ‘win win’ situation for both sides.

Assist the customer to buy and do not follow him

In most of the stores, the salesperson enjoys following the customer, which many a customer does not like and so, this is not advisable. Moreover, there is often no actual interaction…the salesperson just stands silently behind the customer. It then looks rather like you are keeping an eye on him rather then helping him! Indian customers like to obtain guidance and they appreciate respect. If a salesman could respectfully suggest the right options to them, they will surely become regular customers. This is how a loyal customer is made!

First understand the customer’s need

How many salespeople actually comprehend the need of the customer? A smart salesperson does not have to give technical details of the fabric, but he should certainly use soft skills like understanding the reason for the purchase, speaking with the customer on current trends, suggesting season’s colors, etc. He should give advice and suggestions on what may suit the customer best although this is best done in a careful manner. A proper job done of the service to your customer is imperative.

Focus on Conversion
Your inventory must be up to date. The staff at the store should know what is on display and what is in the back-end storage area. Also, broken stocks should be kept well under control so as to minimize loss of sales. The higher the conversion the more profit and loyalty you gets.

A simple example given below is apt in this context: -.

All this within the same footfall!

In the above case sales in one store getting an average footfall of 50 on a daily basis, has been considered. The average bill value considered is Rs. 1000/- . The challenge is to increase your conversion and average bill value by just 10%. You can see the incremental sale achieved is 21% more than what is regular.
As a retail store, you may not have influence over footfall, but you can achieve an additional 21% just by team effort, great service and a sharp focus. For any explanation contact:Alok Sharma

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Posted in Customer Relationship Management(CRM), Retail Customer Buying Behaviours, Retail Market Strategy, Retail Operations, Retail Store Management

Tags: Conversion Customer footfall customer’s need footfalls retail entry strategy retail operations Retail Performance retail plan retail sales

Key Issues with Startups,Small and Mid size Retailers

November 7th, 2010

Retailing in India is in the process of getting more organized and professional.Startups, Small and Mid size Retailers are faced with many issues as they attempt to be successful. The key issues include:

1-Customer Satisfaction:Retailers know that satisfied customers are loyal customers. Consequently, retailers must develop strategies intended to build relationships that result in customers returning to make more purchases.
2-Ability to Acquire the Right Products:A customer will only be satisfied if they can purchase the right products to satisfy their needs. Since a large percentage of retailers do not manufacture their own products, they must seek suppliers who will supply products demanded by customers. Thus, an important objective for retailers is to identify the products customers will demand and negotiate with suppliers to obtain these products.

3-Product Presentation:Once obtained products must be presented or merchandised to customers in a way that generates interest. Retail merchandising often requires hiring creative people who understand and can relate to the market.
4-Traffic Building:Like any marketer, retailers must use promotional methods to build customer interest. For retailers a key measure of interest is the number of people visiting a retail location or website. Building “traffic” is accomplished with a variety of promotional techniques such as advertising, including local newspapers or Internet, and specialized promotional activities, such as coupons.
5-Layout:For store-based retailers a store’s physical layout is an important component in creating a retail experience that will attract customers. The physical layout is more than just deciding in what part of the store to locate products. For many retailers designing the right shopping atmosphere (e.g., objects, light, and sound) can add to the appeal of a store. Layout is also important in the online world where site navigation and usability may be deciding factors in whether of a retail website is successful.
6 -Location: Where to physically locate a retail store may help or hinder store traffic. Well placed stores with high visibility and easy access, while possibly commanding higher land usage fees, may hold significantly more value than lower cost sites that yield less traffic. Understanding the trade-off between costs and benefits of locations is an important retail decision.
7- Keeping Pace With Technology:Technology has invaded all areas of retailing including customer knowledge (e.g., customer relationship management software), product movement (e.g., use of RFID tags for tracking), point-of-purchase (e.g., scanners, kiosks, self-serve checkout), web technologies (e.g., online shopping carts, purchase recommendations) and many more.

KISS – (Keep It Simple Stupid)…is a great principle for retail management to think and live by. For 10’s, 100’s or even 1000’s of stores to work successfully, decisions and processes must be executable in each and every store or they are worthless. Likewise if we don’t take account of every store as we make our buying and selling decisions we make the same mistake. Our prices, promotions and assortments may not work in one or many of the stores.

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Posted in Customer Relationship Management(CRM), Merchandise Management, Retail Buying Systems, Retail Category Management, Retail Consulting, Retail Customer Buying Behaviours, Retail Locations, Retail Market Strategy, Retail Operations, Retail Store Management, Retail Supply Chain Management, Retail VM, Start up Retailer

Tags: Customer footfall Customer Satisfaction department stores Entrepreneur footfalls franchisee Indian retail industry Key Issues Layout Location Managed Retail Services Merchandising and Planning Mid size Retailers Product Development and Sourcing Product Presentation retail chains retail IT retail locations retail technology small retailers Startups Traffic Building visual merchandising

Small Town Retail Plan

June 2nd, 2010

***In a study conducted by Assocham and KPMG has made a forecast indicates that 315 hypermarkets will come up in most Tier I and Tier II cities by 2011-2012.

*** The customers of tier-II and tier-III cities have accepted FMCG brands like Britannia, Colgate, Lux, Coke, Pepsi and Maggi to name a few. This is a clear evidence of association and acceptance of global brands over a period of time by the people there. Hence they will definitely accept other national as well as international food and lifestyle brands, The beauty of these under-served markets is there is limited competition. They’re starved for Modern Retailing .With a focus on low prices and quick turns, stores are profitable within a year or two.

India has about 500 towns with a population ranging between 20,000 and 1,00,000. It’s necessary to establish shops in small towns as it would enable to enjoy first-mover advantage. Big names from retail have drawn up plans to set up shop in small Town . The further we go out from metropolitan areas, the more profit and the more sales we achieve.

Home Work Required?

1. Identifying only the best small cities to enter. Before setting foot in a new city, retailers need to analyze the cost of competing by tackling various crucial issues.

2. Right Product Mix – After deciding to enter a small town, companies need to select the right product mix given the population’s local preferences and incomes, and determine how they should be sold. Historically, retailers have ignored traditional outlets that cater to lower-end shoppers, but in smaller markets, traditional grocery stores and Mom-and-Pop stores capture a higher share of the wallet-and often yield higher margins.

3. Maximizing advertising spend – As they enter small town, retailers also need to reassess where and how to invest their advertising. A company can advertise its brand in small towns for less than half of what it costs in Metro. It might be worth diverting funds to pursue market leadership in a smaller city-if the other signs are positive. By quantifying the level of competition and sales potential, retailer can prioritize the most cost-effective cities in which to advertise and also determine the optimal mix of advertising and trade or consumer promotions.

Customization of retail Plan is the key!!! you can reach me..amit@hand2handsolutions.in