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Retail Strategies & Trends

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bbcon 2013

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Retail Strategies & Trends

  1. 1. 09/29/2013 #bbcon 1 Retail Strategies PRESENTED BY: LAURA BEUSSMAN, ALTRU MARKETING MANAGER JONATHON LEEKE, ALTRU PRODUCT MANAGER
  2. 2. 09/29/2013 #bbcon 2 • Laura Beussman is the Product Marketer for Arts and Cultural Solutions at Blackbaud. Prior to joining Blackbaud, she was a Pricing Manager for Dell, focusing on consumer desktops. Laura also spent 5 years working in the non-profit arts at various organizations including Austin Lyric Opera and the Dallas Theater Center. • Jonathon Leeke has been an Altru Product Manager for two years. Prior to working at Blackbaud, he managed payment terminal and network security offerings at Radiant Systems, the developer of Counterpoint retail software. PRESENTERS
  3. 3. 09/29/2013 #bbcon 3 INTUITION IS NOT A STRATEGY
  4. 4. 09/29/2013 #bbcon 4 MARKETING TIPS
  5. 5. 09/29/2013 #bbcon 5 MARKETING FOR YOUR GIFT SHOP The 4 P’s
  6. 6. 09/29/2013 #bbcon 6 PRICING FOR YOUR GIFT SHOP
  7. 7. 09/29/2013 #bbcon 7 PRICING FOR YOUR GIFT SHOP • You have invented a light bulb that will burn forever and never burn out. What do you price it at?
  8. 8. 09/29/2013 #bbcon 8 PRICING Market- Oriented Set prices based on similar goods sold by competitors Customers are cross shoppers Product is a commodity, widely available Decision is based on price/feature comparison Cost + Calculate the cost of a product, then add a certain $ or margin % Customers are highly sophisticated with purchasing knowledge Product is intensely traded in large markets Decision is based on “bargain” compared to cost Value Set price based on the perceived value to the customer Customers are browser/often captive audience Product is unique or niche Decision is based on emotion or impulse Customers Definition Product Decision
  9. 9. 09/29/2013 #bbcon 9 PRICING FOR YOUR GIFT SHOP Which pricing model applies? Selling in bulk to a major retailer Selling on the shelf at a gas station Selling at a sporting event on a 100 degree day
  10. 10. 09/29/2013 #bbcon 10 PRICING FOR YOUR GIFT SHOP
  11. 11. 09/29/2013 #bbcon 11 PROMOTION FOR YOUR GIFT SHOP
  12. 12. 09/29/2013 #bbcon 12 PROMOTIONS FOR YOUR GIFT SHOP • Which items should you be pushing and how?
  13. 13. 09/29/2013 #bbcon 13 PROMOTIONS FOR YOUR GIFT SHOP What to promote Excess inventory High margin % items - (Price-cost)/Price Items with high elasticity - relatively high % change in quantity for a % change in price New items - Call attention to new merchandise Seasonal Items – limited selling period
  14. 14. 09/29/2013 #bbcon 14 PROMOTIONS FOR YOUR GIFT SHOP What types of promotions do you use in your gift shop?
  15. 15. 09/29/2013 #bbcon 15 PROMOTIONS FOR YOUR GIFT SHOP • Would a customer rather have $2 off or 25% off? • Would a customer rather have $500 off or 25% off?
  16. 16. 09/29/2013 #bbcon 16 PROMOTIONS FOR YOUR GIFT SHOP How to promote Price Drops Discounts – The Rule of 100: Under 100, % discounts seem larger, but over 100, absolute values seem larger Member Reward Programs - Benefits reserved for members of your organization Sustained price Member Reward Programs - Benefits reserved for members of your organization Value Adding Bundles - Add something the customer values without dropping the price Push money - Additional incentives for sales people to sell specific items Displays – More visibility at the same price point
  17. 17. 09/29/2013 #bbcon 17 PLACE FOR YOUR GIFT SHOP
  18. 18. 09/29/2013 #bbcon 18 PLACE FOR YOUR GIFT SHOP Your Gift Shop Decompression Zone Power Display Best Merchandise Window Display Window Display Something visually interesting GiftShop
  19. 19. 09/29/2013 #bbcon 19 PLACE FOR YOUR GIFT SHOP Did you know? Customers only see merchandise that is placed from their knee level to eye level
  20. 20. 09/29/2013 #bbcon 20 PLACEMENT IN YOUR GIFT SHOP What do shoppers love? • Touch – almost all unplanned buying is a result of touching, hearing, smelling or tasting something on the premises of a store. • Mirrors – Definitely for jewelry and clothes, but also helps slow customers down in general • Talking – When people discuss the merchandise, they’re more likely to buy it • Recognition – Studies show that when any contact is initiated by an employee, the likelihood of purchase increase *Why we Buy, Paco Underhill
  21. 21. 09/29/2013 #bbcon 21 PRODUCT FOR YOUR GIFT SHOP
  22. 22. 09/29/2013 #bbcon 22 PRODUCTS FOR YOUR GIFT SHOP Get to know your customers Find merchandise that appeals to them Watch what sells Make adjustments
  23. 23. 09/29/2013 #bbcon 23 MANAGING YOUR OPERATIONS
  24. 24. 09/29/2013 #bbcon 24 1. Capture rate: selling to more patrons What should you expect? - Students: Nearly 100% - Members: 5% - Visitors: 17% What could you do? - Add signage in the museum - Email members about “clearance events” - Add merchandise displays outside the shop HOW ARE WE DOING? 𝐍𝐮𝐦𝐛𝐞𝐫 𝐨𝐟 𝐓𝐫𝐚𝐧𝐬𝐚𝐜𝐭𝐢𝐨𝐧𝐬 𝐕𝐢𝐬𝐢𝐭𝐚𝐭𝐢𝐨𝐧 𝐂𝐨𝐮𝐧𝐭 = 𝐂𝐚𝐩𝐭𝐮𝐫𝐞 𝐑𝐚𝐭𝐞 %
  25. 25. 09/29/2013 #bbcon 25 2. Average sale: selling more to each patron What should you expect? - Average value depends on your products & visitor base. - May dip during the school year, if you measure across all transactions. - Should trend up over time, per customer group. What could you do? - Alter your product mix and pricing to improve the perceived value of higher-priced products. - Create product bundles. - Look for add-on products (“fries with that?”) HOW ARE WE DOING? 𝐍𝐞𝐭 𝐒𝐚𝐥𝐞𝐬 𝐍𝐮𝐦𝐛𝐞𝐫 𝐨𝐟 𝐓𝐫𝐚𝐧𝐬𝐚𝐜𝐭𝐢𝐨𝐧𝐬 = 𝐀𝐯𝐞𝐫𝐚𝐠𝐞 𝐒𝐚𝐥𝐞
  26. 26. 09/29/2013 #bbcon 26 3. Profitability: earn more on each sale What should you expect? - Overall around 45-60% What could you do? - Increase average transaction amount (see #2)! - Decrease costs! o Negotiate discounts or free shipping with your top suppliers HOW ARE WE DOING? 𝐍𝐞𝐭 𝐒𝐚𝐥𝐞𝐬 − 𝐂𝐨𝐬𝐭 𝐨𝐟 𝐒𝐚𝐥𝐞𝐬 𝐍𝐞𝐭 𝐒𝐚𝐥𝐞𝐬 = 𝐏𝐫𝐨𝐟𝐢𝐭 𝐍𝐞𝐭 𝐒𝐚𝐥𝐞𝐬 = 𝐌𝐚𝐫𝐠𝐢𝐧 %
  27. 27. 09/29/2013 #bbcon 27 • Reorder Point - Basic ROP = Normal consumption during lead time + Safety Stock - Example: • Sell 10 shirts a day • Lead time is 15 days • Safety stock is 5 shirts • Reorder point = (10 x 15) + 5 = 155 shirts - How big should my safety stock be? • Depends on the variability in demand and the cost of stocking out. PURCHASING
  28. 28. 09/29/2013 #bbcon 28 • Reorder Quantity - Place larger orders when… • the cost to keep inventory on hand (holding cost) is low • the cost to place an order is high (labor, shipping, setup costs) • average demand levels are high - Examples • Small items • Items with high setup costs. • Items with fixed shipping costs per-order. - Place small orders when… • the carrying cost is high • items have a short lifespan or shelf-life • average demand is low - Examples • Perishables • Seasonal items • Large, expensive items PURCHASING
  29. 29. 09/29/2013 #bbcon 29 • Slow-moving items - Goal: Recoup cash to put toward more profitable items. - Try deep discounts or new locations in the store. Use as a loss-leader at the front of the store to attract customers in. - Bundle with top-selling items to increase total sale and perceived value - Use as giveaways OTHER TIPS
  30. 30. 09/29/2013 #bbcon 30 • Advantages to building an online presence for your gift shop. - Enhances your retail brand - Increase sales - Secondary traffic source for ticket sales and membership • Questions to ask yourself - How will I support the operations of fulfilling orders? - Do customers expect a single shopping cart experience? - How will members get discounts? - How will I market the online store? - How can I control inventory between on-premise and online? - What items will I sell online? • Vendors - Shopify - Volusion - Magento E-COMMERCE - BigCommerce - Wordpress plugins
  31. 31. 09/29/2013 #bbcon 31 ALTRU MERCHANDISE
  32. 32. 09/29/2013 #bbcon 32 Tracking Inventory History NEW FEATURES
  33. 33. 09/29/2013 #bbcon 33 Batch Entry • Quickly receive multiple items or update inventory quantities • Update item attributes like Price or Vendor on the fly NEW FEATURES
  34. 34. 09/29/2013 #bbcon 34 Average Cost • Updates dynamically as new shipments are received • Gives a more accurate view of current margins NEW FEATURES
  35. 35. 09/29/2013 #bbcon 35 Sales Report with Cost of Goods Sold • Evaluate Profits based on Weighted Average COGS • Subtotal by Department or Vendor NEW FEATURES
  36. 36. 09/29/2013 #bbcon 36 Inventory Reporting • Determine Inventory value and potential sales (Retail value) • Subtotal by Department or Vendor NEW FEATURES
  37. 37. 09/29/2013 #bbcon 37 ALTRU MERCHANDISE ROADMAP
  38. 38. 09/29/2013 #bbcon 38 • Purchase Orders - Tracking item quantities that are on-order - Set reorder points or min/max levels - Be notified when items need to be purchased • Label printing - New sizes and label templates - Quickly print labels for items recently received • Sales enhancements - Buttons for individual items - Tax free option • Inventory Management - Import new items or inventory adjustments - New barcode fields - Custom SKUs • Gift cards ALTRU MERCHANDISE - 2014 ROADMAP
  39. 39. 09/29/2013 #bbcon 39 QUESTIONS?

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