Merchandising Success Secrets Pt. 1

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Have you ever wondered why Starbucks makes millions of dollars selling coffee while millions of coffee shops struggle to sell enough coffee to survive?

Or what about the likes of Bunning’s Warehouse dominating the “do-it-yourself” home improvement industry while other smaller retailers fall by the wayside? Many people know the value of merchandising and yet so few fully understand how to optimise their retail or business environments.

Success is largely due to clever merchandising. It’s a clever way of increasing your sales. If people like your store they will come back time and time again and usually tell their friends to go there as well. 

So why is Starbucks so good at selling coffee? 

Sure, you can order over 50 versions of a basic cup of coffee, but Starbucks is more about the “feel” you get when you visit the store. Think about this… When you walk into Starbucks did you walk into a coffee shop or a shop that serves coffee?

Two things happen on a subconscious level when you enter a Starbucks store:
1. “Feel”

Starbucks create the “feel” by bringing several elements together to create an inviting atmosphere. For instance…

  • They will usually have a lounge suite near the front of the store
  • The colours are complementary with warm tones
  • There are newspapers and magazines for people to read
  • With all of these you can sit back, take your time, have chat and relax like you were visiting a friend’s place
2. “Flow”

you might think of “flow” as directing traffic. When you enter a Starbucks store you go to the counter and order your coffee. The menu itself is a lesson in flow. You are guided through by the staff right to the end when they call out “Hey Rob, your tall flat white is ready.”

5 Tips for Merchandising “Flow”:
1. Directional signs

As obvious as it may seem, people need to be directed and preferably in the direction you want them to take. Directional signs can be arrows, department signs such as “women’s section” or even painted lines on the floors or walls.

2. Left to right

good retailers usually have the lower priced items on the left hand side with the more expensive items on the right hand side. It’s the same principle as reading.

3. Back to front

grocery retailers have this figured out perfectly. Nine out of ten people go to the shop to buy milk, for instance. That’s why milk is found at the back of grocery shops. Why? Because after you have picked up your milk there is a better chance you will pick up something else on your way to the counter.

4. The journey

The IKEA store is a journey. You have to walk past every single item on display before you reach the exit.  (in fact, once you’re in there, it’s almost impossible to get out!

5. Avoid bottlenecks

people dislike waiting in line to make a purchase. You might consider ways to speed up the process (e.g. Starbuck’s do this by having an order counter and serving counter.

Many people think that merchandising as a concept is only applicable to the retail sector but this is not the case – every product or service has a “feel” or “flow” that impacts the customer experience pre-purchase, during, and post-purchase.  

A CASE STUDY

A good example of a someone successfully creating the right “feel” in his business is Australian Dentist, Dr Paddi Lund.  Breaking with the stereotypical associations with the dentistry industry, Paddi decided to create a happiness-centred dentist practice. 

Wait a minute… a happy trip to the dentist… You’ve got to be kidding, right? 

Believe it or not, Paddi’s story is no joke – in fact he now runs one of the most successful dental practices in the world, all because he made the decision to change the “flow” and “feel” of his customer (and staff) experience.  

Here’s just a few examples of the changes Paddi made in his business that have resulted in him achieving 2½ times his income in just 23 hours per week AND making him, his team, and his customers happier than ever thought possible…

  • Paddi “fired” more than half of his old customers and now only accepts new clients by referral  – an incoming “flow” decision that greatly affected the “feel” inside the business. 
  • He sawed up his reception desk and installed a Cappuccino machine, bakes fresh dental buns for clients, and serves 30+ varieties of tea all in fine bone china – “Critical Non-Essentials” that contribute to the “feel” of his business and create an atmosphere unlike any other dentist in Australia.
  • In contrast to the concept of productivity through separation of duties, Paddi created a “continuity of care” system whereby one team member cares for a clients interaction through the entirety of their experience. This is a “flow” decision that also significantly contributes to the customer (and team member!) experience.

 

If you are searching for advice or answers to this blog, please feel free to give us a call on 1300 85 64 77.
Otherwise, stay tuned for part 2 next week.

 

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