Every retailer has what I like to call golden items. These are the products that customers seem to gravitate toward no matter the season. They may not always be the flashiest or most expensive items in your store, but they consistently generate impressive sales.
Seaside retailers should find ways to let golden items shine in their stores. When done right, these products quietly contribute a significant portion of revenue year after year.
Find winners
Many retailers make the mistake of relying on instinct to identify these products instead of using actual sales data. Run a sales report by SKU and sort the results by total sales dollars or units sold over the past 12 months. You will quickly discover which products are doing the heavy lifting for your store.
"When done right, these products quietly contribute a significant portion of revenue year after year."
You need to also evaluate whether these items are working as hard for your bottom line as they are for your top line.
Pick a price
Choose one of your bestselling items and review its gross margin. Has your wholesale cost increased over the past year while your retail price has remained the same? Making even a small adjustment to a high-volume product can have a big impact on annual profits.
If the market will support it, a modest price increase may improve profitability without affecting demand. On the other hand, if the item is being used as a traffic builder, maintaining a competitive price may be the right strategy. The key is making a deliberate decision based on data rather than habit.
Perfect placement
Your golden items deserve prime real estate in your store. Place them where every customer has an opportunity to see them. If customers are already buying these products, increasing their visibility often results in even greater sales.
Don’t be afraid to merchandise the same item in multiple locations. A bestselling mug can appear in the drinkware section as well as a themed display. Having multiple touchpoints increases the likelihood of additional purchases.
Track results
Finally, get into the habit of tracking the performance of these items. Monitor its performance for 30 to 60 days. Compare unit sales, revenue, gross margin and inventory turns with previous periods. Your sales reports will tell you whether the strategy worked.
By identifying and repositioning your golden items, you’ll ensure these proven winners continue to generate even greater results throughout the season.
Michael Hale, CEO of Retail Rehab, transforms retail spaces and helps drive up profits. michael@retail-rehab.com, www.retail-rehab.com
