Merchandising Impulse and Add on Selling Items Throughout the Store

 I have been working in retail for the last 35 years and when I started we had the similar problems and opportunities to increase sales and profit just in a different environment. Now I work as a supplier and advisor in the convenience and gas station channel

Here are a few observations

Key Issues Facing Convenience & Gas Stations Retailers

• Pay at the pump and shrinking gasoline margins are a sizeable industry threat
• Traditional high volume tobacco sales continue to decline
• Labour costs on the rise.
• Household penetration is flat as is shopping frequency
• Drug stores, mass department stores and grocery stores targeting the convenience trip.
• Time spent processing lottery sales with low margins.

Opportunities For Sales Growth in this sector

• Expansion of Food Service offerings
• Expansion of new merchandise categories
• Understanding the impact of changing consumer demographics and buying habits.
• Impact of technology. i.e. consumers in line ups checking their cell phones
• Driving more gas purchasers into the store
• Drive up the size of the average sales per transaction (AST) & Units per transaction (UPT)
• Focusing on product mix to maximize your most profitable categories
• Consumers shop C-Stores frequently but are not necessarily loyal to anyone store
• Primary reason for visiting store was to purchase beverages, gas and lottery
• Some customers that pay at the pump enter the store
• Beverages are a destination category

One of the best ways to increase your sales without spending one anything on advertising or incremental inventory is to get bigger retail sales from the retail customers already buying something from your store. One of the most effective ways to do this is to add-on to every sale. Done properly, adding-on is great customer service – not a pushy sales pitch. In fact, most of the time you haven’t given good customer service if you haven’t suggested add-on items.

There are many ways to use add on sales concepts throughout the store and of course your sales associates are a key component of the strategy.

Here are two tips for making register add-ons bigger retail sales generators:

1. Don’t put too many items at the register as add-ons. If there are too many choices, your customers will frequently be overwhelmed and choose none. Rotate different items until you’ve found your best bet add-ons and then keep them on the counter and keep them in stock!
2. Make sure everyone on your staff shows every customer an add-on at the cash register before they give the total dollar amount for the sale. A quick demonstration and an enthusiastic endorsement will persuade even more people to buy.  The trick is to add-on constantly and consistently until it becomes a habit.

It can’t be stated strongly enough that if you and everyone who works in your store attempt to add on to every single sale you will see significant retail sales increases. It’s the little things done well, and done all the time, by everyone in your organization that mean the difference between constant struggle and the type of success you deserve. The quickest way to add money to your till is by training your staff how to sell.. Give your customers what they really want – a great buying experience every time they visit your store.

The best impulse products are the ones that are easy to grasp—both physically and mentally. Keep them simple. Such products don’t need a lot of explaining. It sells itself (because) you understand what it does.” In other words, if the customer has to ask what the items are, they won’t make for good impulse buys.

Here are some tips for profitable cross-selling and up-selling.

25% Rule The value of an add-on sale should not increase the overall order by more than 25 per cent. For example, if the original order is $20.00, you should be cautious in your attempts to exceed that order by $5.00. Despite the fact that people are motivated to buy, they still have a mental limit as to the amount they will dispense

DON’T DUMP THE JUNK There is, on occasion, the urge to use cross-selling and up-selling to move unwanted inventory. This in itself is okay provided the customer isn’t saddled with useless or defective products. If you are clearing stock that won’t be replaced, let the customer know. If it is a discontinued line, don’t hesitate in letting the customer know. If you don’t, you’ll be sorry later. Your goal is to give your customer value, not to be cleaning out your warehouse of ‘stuff’ you can’t sell. You’ll make a sale today, but lose a customer tomorrow.

WHAT GETS MEASURED GETS DONE

You need to measure you add on and up selling initiatives. The best metrics to track are ones that measure the increase of the basket size.

• Average sales per transaction (AST) = Total Net Sales/Total Transactions
• Units per transaction (UPT) = Total Units Sold/Total Transactions.

You need to know where the business stands on these metrics and put goals and plans in place to improve.

When you consider the following statistics it is even more critical to have an add on selling process.

• 60% of the customers buy gas.
• 25% pay in the store
• 35% pay at the pump. 15% go into the store. 20% do not go into the store
• 40% of the customers buy no gas but enter the store
• 2/3 of gas transaction customer enter the store.

So if you had 1000 transactions a day that would mean 600 gas transactions and you strategy produced $5 average sales per transaction 50% of the time you would have 300 x $5 = 1500 incremental dollars a day or $10500 a week or $546000 per year. You cannot afford not to have a process

Make your impulse buys more noticeable and enticing by pushing the right consumer buttons. Here are some suggestions:

• Urgency – Trigger people’s sense of urgency through limited-time promos. Consider the       “Today Only” description in its signage to make the impulse buy more compelling.
• Value – Make people see that they’re getting a good deal with generous offers. “Buy two, get two” promos with its impulse products to further encourage shoppers to buy.
• Excitement or Novelty – You don’t always have to throw in an offer with your impulse products. Often, if a product looks fresh or novel enough, people will notice them. If you have new and original items in your store and they fit the above-mentioned criteria (i.e., handy and low cost), then consider testing them out as impulse buys to see how customers react.

Another strategy is to position products near your store’s prominent sellers. What parts of your store do customers frequently head to?  What are the items that customers usually buy or come to your store for? Strategically place merchandise near these areas or products to increase their visibility. Great example of this is to have baked goods near your hot beverage counter.

Part of increasing visibility (and sales) with impulse purchases entails placing the merchandise where customers are sure to see it. In retail stores, the two most effective ways to pull this off would be positioning impulse products at the checkout area and placing them near your bestsellers.

Another way is to place key selling and add on items throughout the store on clip strips

Clip-Strip Tips

• Make sure product on clip-strip is facing the customer with labels forward.
• Clip strips must be full at all times without being overloaded. Due to the length and shape of certain products, it may not be necessary to stock every tab on the
• clip-strip.
• Clip Strips are to be signed with a price tag.
• Remove any double-up of product or clip-strips.

Placing products at the checkout zone is a common and highly effective tactic. Shoppers who are at the point-of-sale area are likely already in the mood to buy, so the chances of them making additional purchases are relatively higher. Even businesses that are not in the business of selling retail items are using this tactic. Here is an example in the rental car business and how gas stations & convenience stores sell over the counter products.

If you have a solid foundation on all these concepts , sales and profit will improve. The key to success is to plan and review all your add on and up selling infinitives daily, measure your success through the metrics and customer satisfaction and have fun selling more merchandise.

Over 30 years’ experience in management, excelling in business planning, strategy development and process improvement. Bruce is a leader with strong business acumen, well-developed analytical skills that transforms into powerful operational business planning focused on people. He has recognized ability for strategic development and performance management planning that delivers measurable and sustainable results. Bruce operates WBRC Solutions a full service consulting firm for small to medium sized businesses that specializes in helping companies identify, understand and maximize all of their tangible and intangible assets to drive greater performance and create more wealth for the company.