retail strategies & trends

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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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• 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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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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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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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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What types of promotions do you use in your gift shop?

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• Would a customer rather have $2 off or 25% off?

• Would a customer rather have $500 off or 25% off?

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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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Your Gift Shop

Decompression Zone

Power Display

Best

Merchandise

Window Display Window Display

Something visually interesting

Gift S

ho

p

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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


- 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


- 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?

retail strategies & trends

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