We are always on the look out for end of line and other special buy opportunities with which we can make a value-based pitch at the front of the store, to attract traffic from the mall.
Our latest value-based offer is these heavily discounted Parker pens we found. While the stock is a couple of years old, they still work fine and come in nice packaging.
We find that the dump bin approach works well for this type of stock in our store. It does not detract too much from the overall front of store message yet presents a magnet for people in the mall looking for a good deal. Within the first four hours of putting these out we sold seven pens. This is nice basket-building revenue.
We took care to create a sign at the top that reflects value more than discount. We presented the stock in such a way that supports this too – neat, organised. yes, we have a pack open. No, they will not be stolen. We track inventory carefully and theft is rare in this business. This is in part due to the time team members spend on the shop floor.
Beyond attention to detail through shop floor execution, the key to success here is getting the right stock at an excellent price. This is where direct supplier relationships are crucial. Here are my suggestions:
- Ask your reps – sometimes they have end of line stock with them.
- Negotiate – sometimes the starting price is not what they will sell for.
- Plan – try and have a terrific shop floor deal at least once a month regardless of the seasons you are running.
- Manage the offer – don’t keep it out for too long, consider moving on price to quit the stock.
- Target margin – we look for at least 60% for floor offers like this as part of our overall business GP goal.
- Target basket builders – products regular shoppers will find easy to add to the item(s) they visit you to purchase.
- Target new traffic – make sure the offer will also attract new shoppers to your business.
This Parker pen meeds all these goals and it’s working a treat. We were able to acquire plenty of stock to keep the offer live for two weeks. This is our goal. We were not given special treatment with the offer. As I mention above, the key is to talk with reps, to cultivate relationships.
Click on the image for a larger version.
While your effort to “create a sign at the top that reflects value” is good in principle. Did you ever actually sell them at $27.50? If so, how many? The ACCC has been more interested in that aspect recently.
See: http://www.accc.gov.au/content/index.phtml/itemId/1098492/fromItemId/2332
Blake, just about every newsagent has had and sold these over the years at the price RRP’d by Parker. Marks discount will be off that RRP price so it is not one of those cases where the price has been inflated to allow for a large discount just a case of good buying when the opportunity arises and passing the benefit on to the customer while maintaing a health margin.
yes Blake. I am not stupid.
i dont doubt the ACCC has been interested that type of pricing, but have they done anything about it. actually as the ACCC done anything in the last few years?
petrol and milk
Mark, you say they won’t be stolen, we’ve been lucky so far with no theft from front of shop, but would you place your Hallmark Valentines Day Coffee Machine out the front?
Yes. We regularly have high value items at the front as much to challenge us as to show faith in our customers.
The majority of our sales come from the front 15-20% of the shop so we place a lot of high margin stock here. People walking past need a reason to come in and this will not happen if you only have cheap junk at the entrance. If you have good staff that are paying attention theft should be minimal but lazy staff leads to higher theft.
Hi Mark, didn’t meant to imply you were stupid. Just a general caution.
I’ve seen electronics retailers use RRP/Was/Slash on release week items in their catalogues.
@Peter Stewart: The ACCC link I referenced was published in January 2013 (though it relates to a 2010 catalogue).
While jewelers and shoe stores are known for sales with retail prices that never existed – remember that newsagencies are seen as a monopoly/protected by the general public and politicians. Even though we know this isn’t the case. This blog has already discussed that issue.
The problem with the monopoly perception is that it makes newsagents a potential target for action.
Hope that makes more sense as to why I posted my original comment.