This document summarizes a presentation on retail strategies for a gift shop. It introduces the two presenters, Laura Beussman and Jonathon Leeke, and their relevant experience. The presentation then covers marketing tips, the 4 P's of marketing (Product, Price, Place, Promotion), pricing strategies, promotions, product placement in the store, managing operations like capture rate and average sale, purchasing strategies, and new features of the Altru Merchandising software. It concludes with an overview of the product roadmap for 2014 and an invitation for questions.

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Retail Strategies
PRESENTED BY:
LAURA BEUSSMAN, ALTRU MARKETING MANAGER
JONATHON LEEKE, ALTRU PRODUCT MANAGER

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• 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

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INTUITION IS NOT A STRATEGY

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MARKETING TIPS

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MARKETING FOR YOUR GIFT SHOP
The 4 P’s

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PRICING FOR YOUR GIFT SHOP

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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?

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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

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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

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PRICING FOR YOUR GIFT SHOP

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PROMOTION FOR YOUR GIFT SHOP

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PROMOTIONS FOR YOUR GIFT SHOP
• Which items should you be pushing and how?

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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

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PROMOTIONS FOR YOUR GIFT SHOP
What types of promotions do you use in your gift shop?

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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?

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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

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PLACE FOR YOUR GIFT SHOP

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PLACE FOR YOUR GIFT SHOP
Your Gift Shop
Decompression Zone
Power Display
Best
Merchandise
Window Display Window Display
Something visually interesting
GiftShop

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PLACE FOR YOUR GIFT SHOP
Did you know?
Customers only see
merchandise that is
placed from their knee
level to eye level

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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

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PRODUCT FOR YOUR GIFT SHOP

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PRODUCTS FOR YOUR GIFT SHOP
Get to know your
customers
Find merchandise
that appeals to them
Watch what sells
Make adjustments

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MANAGING YOUR OPERATIONS

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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 %

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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

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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 %

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• 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

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• 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

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• 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

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• 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

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ALTRU MERCHANDISE

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Tracking Inventory History
NEW FEATURES

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Batch Entry
• Quickly receive multiple items or update inventory quantities
• Update item attributes like Price or Vendor on the fly
NEW FEATURES

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Average Cost
• Updates dynamically as new shipments are received
• Gives a more accurate view of current margins
NEW FEATURES

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Sales Report with Cost of Goods Sold
• Evaluate Profits based on Weighted Average COGS
• Subtotal by Department or Vendor
NEW FEATURES

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Inventory Reporting
• Determine Inventory value and potential sales (Retail value)
• Subtotal by Department or Vendor
NEW FEATURES

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ALTRU MERCHANDISE ROADMAP

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• 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

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QUESTIONS?