Very Important and Useful Retail Facts That May Assist You

Among the many various retail facts that exist, a few of the more pertinent are as follows:

  • Almost 70% of typical shoppers feel that their needs are not first in the minds of retailers
  • Most shoppers (almost three quarters) are prone to buy the item they want when they first find it, and more than half know specifically what they want when they go shopping
  • Almost half of today’s shoppers do not enjoy shopping in large stores, but they do so because they feel there is a better chance of finding the merchandise they want
  • About half of all shoppers say that saving time is more important than price – particularly men
  • Location continues to be an extremely important factor in your retail success – unless you have an extremely compelling reason, your customers will not spend a lot of time and energy locating you

Ideas For Merchandising Your Sales Floor

Merchandising a sales floor can be a big challenge for some people and a very simple task for others. Actually, there are some general "display rules" that can help you to develop a basic sales floor look and you can make adjustments from that point to further refine it. A number of sample "rules" are listed below for your use and we ask that you send us your comments as you think of new and even more refined ideas to help others.

  • utilize walls as well as floor fixtures

  • wall fixtures are useful for highlighting merchandise

  • merchandise wall fixtures small to large, left to right, top to bottom

  • keep fixtures straight and parallel to any area borders (like carpet border)

  • insure that floor fixtures have attractive, easily understood, attractive signage

  • insure fixture signage faces traffic pattern

  • insure fixture arm heights are consistent and symmetric

  • use a fixture with the proper holding capacity (density) for your store (low, medium, or high)

  • do not let goods on a fixture touch or drag on the floor

  • insure your store merchandising will permit an un-obstructed view of the sales floor for customer service help and security

  • insure at least 36 inches between all floor fixtures on all sides

  • rounders are often the best fixtures for clearance merchandise

  • utilize fixtures that are a consistent type and height to insure the sales floor is consistent

  • do not use rolling hanging racks on the sales floor

  • beware using vendor-supplied fixtures as they may disrupt the consistent look of your sales floor

  • dump bins for select small merchandise, used sparingly, can be a useful tool

  • "colorize" merchandise by varying colors from light to dark and sizes from small to large within each color

  • "colorize" rounders counter-clockwise

  • "colorize" a wall grid across from left to right, then diagonally down and then left and right again

  • "colorize" rounders first then assort each color by size

  • never put more than two colors on an arm

  • insure color scheme of store is in balance

  • never mix stripes and paisley patterns

  • show individual items and complete outfits

  • hang pants at mid length

  • create merchandise grouping based upon the type of goods being sold

  • avoid mixing different items on an arm

  • keep different categories of merchandise on different rounders

  • shoes display pairs are best displayed close to eye level

  • display key margin items and featured items as close to eye-level as possible

  • insure all merchandise displayed is neat, steamed, folded, zipped, buttoned

  • face hangars the same way and separate (space them out) by 1 inch

  • do not mix hangar types

  • keep chrome fixture clean by dusting and wipe off finger prints carefully (try wax paper)

  • size collars are helpful if merchandise sizes are difficult to see on vendor tags

  • insure your price signage is accurate

  • take pictures of your well-merchandised sales floor to help associates understand the look you want to maintain

  • keep your sales floor full and your stock-rooms empty

  • develop a sales floor plan - see example - before placing merchandise

  • "recover" your sales floor at least once per day to neaten up merchandise handled by customers

  • dust and vacuum daily, clean linoleum and wood floors 2x per week, clean restrooms 3x per day

For more information on this topic contact Pat Fitzpatrick at Atlanta Retail Consulting Inc

New Store Opening Checklist - Add To Our List!

We created and initial general list of the items that a store owner will have to consider when opening a retail store. This list is intended to be the start of a very comprehensive listing of the steps that need to be considered, but we need our readers to ADD TO THE LIST via the comments button at the end of the article. We will keep expanding the list as new ideas are submitted.
  • get all needed planning tools and templates
  • develop business plan
  • perform market research to determine sales potential
  • develop a financing plan and sources of capital
  • secure financing
  • set up corporation
  • open bank accounts
  • select location
  • negotiate lease
  • get all licenses and permits
  • set-up all utilities
  • select contractor for internal/external re-fit
  • develop construction plan
  • develop full checklist with key dates
  • buy/lease phone system
  • decide sales floor fixtures to utilize
  • develop a sales floor design
  • select lighting/final colors/HVAC/sales floor props
  • determine sales tools needed in the business
  • select security system/change locks
  • get computer/cash register/POS system/other software
  • get cash handling equipment and safe
  • do initial merchandise selection and purchase
  • develop operating/ HR/customer service policies
  • determine benefit plans
  • advertise for and hire associates
  • train associates
  • physically set up store
  • order store supplies
  • develop any forms/communication policies
  • set dress-code policies
  • set merchandise prices
  • plan openeing sequence
  • set up store systems/POS/credit card links
  • create sales floor signage
  • set-up attorney/HVAC/plumber/electrician/cleaning service arrangements
  • determine store hours
  • do final punch list review with contractors
  • meet neighbors
  • insure parking space available
  • do soft opening
  • do grand opening

For more information on this topic contact Pat Fitzpatrick at Atlanta Retail Consulting Inc

How to Find Great Sales Associates

One of the smartest approaches that we have ever encountered to finding truly great sales floor associates is so simple that few retailers do it - yet it produces the best results. The secret is to "GO SHOPPING". Make it a point when you are shopping for your own needs to pay close attention to the level of service that you are receiving form the sales associate who is assisting you.

The average sales associate turnover rate is typically over 100%, meaning the "average" sales associate tends to stay with their employer less than a year! Use that statistic to your advantage and start a conversation with the associates that impressed you the most, get their names and tell them you might be hiring and ask them if they would be interested in speaking to you about a position in YOUR store. BE SELECTIVE and hire the people you really want instead of the person who walks through your door to answer your help wanted ad.

Ideas to Help You Effectively Merchandise Your Store

Studies have shown that customers buy when you deliver properly chosen merchandise, sold in a pleasant shopping environment. This merchandise must also be well presented, properly priced and most of all – in stock. Merchandising is more of an art than a science, but there are a number of general guidelines that you can consider when placing your merchandise on your sales floor. Some of the most important ideas are as follows:

- Maximize your sales floor space - you cannot sell merchandise out of your stockroom
- Present your merchandise in a fashion that supports a counter-clockwise customer traffic flow, which is common
- Create unique departments with logical complimentary merchandise
- Make sure your offering is deep (numerous different types of the same item) as well as broad (numerous different items) as long as you can keep the items selling
- Try lifestyle merchandising, appealing to customers who lead a certain type of lifestyle and buy related goods
- Consider what types of sales floor fixtures will work best for you and show your merchandise in the most attractive manner – these can be low, medium, or high-density fixtures
- Know your top twenty profit margin items in your store and feature those items prominently
- Make sure you utilize the right number of checkout areas (cash wraps) so that customers do not have to wait long in lines to check out
- Make sure your signage (for departments AND pricing) are attractive and easily understood
- Merchandise high-margin “impulse items” near the check out area
- Create a tasteful clearance area in the store to collect old and slow-moving merchandise, mark it down aggressively, and sell it as fast as you can
- Watch your customers shop and pay attention to where they go, the order of departments (or areas) they tend to shop in, and where they spend most of their time – then re-do the areas they are least attracted to

These basic ideas will help you to drive more sales and will make the sales you make more profitable. Additional ideas can be found at the Furniture World website.

What is “ZONE COVERAGE” and How Do You Implement It?

A concept adopted by large retailers to help their organizations organize and control the sales and/or operational activities that occur on their salesfloor is called “Zone Coverage”. The concept itself is easy to understand and relatively easy to employ. Basically, well organized retailers map their salesfloors into specific areas or “zones”. A zone can be part of a department, an entire department, or even parts of multiple departments. The area that makes up a Zone is more dependent on the physical layout of the salesfloor.

Each zone is the responsibility of specific store associates who are assigned to perform selling and/or operational duties only in their zone. The value in this approach is that store associates gain a better understanding of the duties that they must perform, the times the duties should be done, and where those duties are located. All confusion about who is suppoesed to do what jobs is eliminated.

Make Sure You "RECOVER" Your Stores

Creating an inviting shopping environment is one of the most powerful things that a retailer can do. Large retail firms spend untold millions on the look and feel of their shopping environment, knowing that they must impress their shoppers in order to keep them coming back. The average store, in fact is re-modeled about once every 7 years on average – and that does not take into effect the additional ongoing maintenance and sprucing up that is done on a regular basis.

When a customer enters your store one of the first things they notice is the cleanliness and neatness of your facility. While a belief exists that many shoppers enjoy a messy environment that creates the need for them to “dig and hunt for great buys”, the truth is that few retailers rely on that operating strategy to drive sales. I do not recommend it. In order to keep shoppers coming back you first need to provide them with a neat and clean environment to shop in and then impress them with your merchandise content, in-stock condition, and sharp pricing.

While we depend on our customers to keep us in business, they can be messy, sometimes very messy in their shopping habits. In order to deal with that fact, every retailer needs to have some plan for how they will neaten up their store(s) after a busy shopping day and get ready to impress their customers once again. This process is typically referred to as “Recovery”.

We recommend that every retailer have a specific plan in place for how to neaten his or her stores on a regular basis (daily) and a method to calculate how much employee time it will take to make that happen. Observing your employees (store associates) performing the recovery task and getting an average time per aisle will help you to estimate how much time per day you should allocate to get the recovery task done. We suggest telling your associates how much time they have allotted to them to recover a given area and let them try to beat your goal.

Whatever means you employ, the most important thing you can do is make sure that "recovery" happens. Customers who think you have a dirty store will stop shopping with you and will quickly find another retailer to visit.

For more information on this topic contact Pat Fitzpatrick at Atlanta Retail Consulting Inc

How to Determine How Many Store Hours to Schedule

Large retailers utilize very complex and very expensive software programs to calculate their staffing needs. Many utilize the programs effectively, some do not. The concept of calculating store staffing levels is actually rather basic and can be done by a small retail organization on a store by store basis by utilizing a few key concepts.

First, the retailer needs to think about their store tasks in groupings of similar functions. An example might be all selling tasks on the salesfloor. Second, the retailer needs to create productivity benchmarks for each of the function groups, making sure to include all of their employees in a group. Examples of possible function groupings might be as follows (yours may vary):

- All selling tasks (including returns and adjustments)
- All receiving, processing, merchandising tasks
- All maintenance, housekeeping and cleaning tasks
- All recovery tasks (neatening up after your customers)
- All pricing and signage tasks
- All clearance merchandise tasks

For each grouping, like above, you should then select one key task or type of work for each group that can be easily measured and calculate an overall productivity benchmark for that group. See the article on developing productivity benchmarks for more information. Using the benchmarks, if you then project what your workload may be next week or the week after you can calculate how many hours of employee time you will need to get that amount of work done. See below for an example:

Having this detail will tell you that you may need 43.5 hours to run your store for the period you are looking at based upon your forecast of the workload coming up and the time it takes to do the work. Sophisticated retailers use this type of logic to develop staffing guidelines for the week then schedule the hours by day based upon their knowledge of when the work will happen. For example, if most of your sales occur on Saturday, then you should make sure you schedule most of your selling time when your customer traffic will be heaviest.

How to Develop Your Own Performance Benchmarks

One of the simplest tools that you can create for use in managing your retail organization is a list of business benchmarks (or often called, business metrics) that can be used as productivity goals. Few small retailers take this step; however, if done properly, the data you will create can be used for performance goals to help your employees attain higher levels of performance.

The “business metrics” concept is very basic. Essentially, it suggests that you identify each unique task that is performed in your firm. Let us take merchandise receiving, processing, and merchandising as examples of three tasks we must perform to run our retail operation. These tasks are often composed of the following key steps:
  • Prepare the area where the merchandise will be received and processed
  • Meet the inbound truck and place the incoming merchandise in an appropriate area for either immediate or later processing
  • Count and sign for the received cartons
  • Open the cartons and remove the goods, placing them on either a processing table (if more steps are required like removing packing material) or place the items directly onto either wheeled carts or wheeled hanging racks
  • Mark the goods with the correct price
  • Stage (store for later movement) the merchandise or move it directly to the salesfloor
  • Move the goods to the salesfloor and place the merchandise in the correct location on the salesfloor in an attractive fashion to attract customer attention

The time it takes to perform those tasks can be measured easily. Assume it took 3 hours in total and you used three people to perform the work for those three hours. That means your team used nine total hours (or 540 minutes) to perform those tasks. Now, divide the number of items that were received, processed, and merchandised (let us assume 2000) by the 540 minutes used in order to calculate your productivity ratio for those tasks 2000/540 = 3.7 . That means your team averaged receiving, processing and merchandising 3.7 items per minute (for each person).

Now that you know that productivity number, you can do a few things with it. First, use it to calculate the amount of time you will need for future receipts and the related processing /merchandising. If you have been scheduling too much time for your team to get the job done, then consider scheduling less time. Second, look for ways to improve the efficiency of the tasks and measure it again. You may be able to reduce the total time needed by implementing improvements and then you would be able to calculate how much time you were able to save by doing so.

You may want to consider creating productivity benchmarks for the following tasks in your business by tracking the following :

Receiving - using cartons received per minute (or hour for large shipments)

Processing - using units per minute

Merchandising - using racks or carts moved/unloaded per minute

Price changes - using process changed per minute

Floor recovery - using aisles or store zones (areas) recovered (neatened up) per minute

Cashiering - using items sold (or number of transactions) per minute

How to Increase the Productivity of Your Merchandise Receiving and Processing Activities

After you have ordered new merchandise, the planning for its arrival should begin. Make sure you request a delivery date and a way to correspond with the vendor that you ordered from so you can accurately expect when the goods will arrive. Vendors are familiar with supplying their customers with “receipt of goods” dates. Once the merchandise does arrive you will need to receive it (physically bring it in your facility and store it), process it (open the carton, verify quantity (optional) and check the condition of the contents, strip off plastic or paper packaging and unwanted tags, hang/fold/or steam the merchandise), and finally merchandise it (move it to the sales floor for presentation or into a storage area).

While working with many retailers, both large and small, over the last three decades we have noticed that there is significant variance in how these functions are performed and how productive they may be. In order to assist your firm to optimize the productivity of these three key functions we would like to offer the following recommendations. Keep in mind that the size of your facility and the layout you employ will affect how you perform these tasks; however, the general concept of each recommendation should be considered.

  • Make sure you are fully prepared for any large deliveries and have planned how you will handle them in advance
  • Insure you have all the right conveyance and processing tools available and the area you will use to store and process the goods is clean, organized, and available
  • When the goods arrive bring them in in a smooth flow and utilize as many of your employees as possible to unload the truck quickly and begin processing immediately
  • If you have to store the incoming merchandise and process it after store hours make sure the cartons are available and stored on an organized manner
  • Arrange your processing area to facilitate an organized and productive flow from one function to another. The more an item stops and starts during the processing flow, the less productive the process may be
  • Utilize appropriate work tables to process the merchandise and do not process off of the floor or other cartons
  • Once processed, hang the merchandise on movable hanging racks or movable carts with shelves (for folded goods) for efficient movement to the sales floor
  • Clean up the area once all the goods are processed to make it ready for the next truck receipts
  • Observe how many units your team can unload, process, and deliver per man-hour so that you can use those statistics to plan your labor needs for future receipts based upon the anticipated receipt volume
Here is an example of an efficient backroom receiving and processing area:


Some basic productivity guidelines for anticipating how much time you will need for each of these key functions are:

  • Receiving: unload - about 300 cartons per man-hour*
  • Process: from carton open to hang or fold on a rack or cart - about 150 units per man-hour
  • Merchandising: moving rack or cart to sales floor (or stockroom) and placing items for sale - about 100 items per man-hour

* Note: that per man-hour means the time used for "each" person working. For example: 2 man-hours would equal 2 people working for 1 hour each.

 The time employed for all three functions should approximate the following:
  • Receiving: 10% of total team time used
  • Processing: 20% of total team time used
  • Merchandising: 70% of total team time used

The 2008 Holiday Season promises to be Very Challenging!

Are you Prepared for a very Challenging 2008 Retail Holiday Period?

Forbes Magazine recently reported there would be little holiday cheer this year, as office parties are slashed and shoppers skimp on gifts at the greatest rate in 17 years. Holiday sales for 2008 are expected to grow an anemic 1.5% from 2007, according to the latest projections from TNS Retail Forward, a market research firm that specializes in retail. That would make the upcoming holiday shopping season the worst since 1991, a period when the economy was slowly emerging from a recession. Even the 2001 Christmas season, coming on the heels of the Sept. 11 attacks and a general slowdown that followed the bursting of the Internet bubble, saw a 2.2% gain in sales growth from the previous year.

Holiday sales growth averaged 6.5% between 2003 and 2005, before slowing to 3.8% in 2006 and 2.7% in 2007, according to TNS. If the company's projection proves correct, growth will be nearly cut in half this year. Before the big Federal Credit Bailout The National Retail Federation had predicted that total holiday sales would rise a modest 2.2 percent for the November and December period from a year ago, to $470.4 billion. Leading the spiral downward through December will be clothing and accessories, which TNS projects will fall 1.3% from last year. One silver lining may be consumer electronics. Steady buying in preparation for digital TV signals in February 2009 should send the sector up 4%, the company projects.

With projections like that beginning to appear with some frequency now, and the clear realization that the economy is facing some of the most challenging obstacles in decades, small retailers need to intelligently plan how they will maximize their holiday sales. Going into the 2008 Christmas Season without a prepared strategy may be very risky proposition.

Despite the challenges anticipated there are a number of tactics that small retailers can employ to increase the odds of making a reasonable profit. Customers tend to lower their shopping expectations during the busy holiday period, due primarily to the general lack of decent customer service they receive. We suggest that small retailers consider this retail phenomenon a major opportunity and differentiate themselves to earn a sizable share of their customer’s wallet.

Make it your goal to impress the increased number of shoppers you will have during the holiday period, as they may not regularly come into your store during other times of the year.
Specific steps we suggest small retailers employ to improve their business and maximize the performance of their retail establishment in this turbulent period include:
  • Honestly assess your retail offering and your readiness for the holidays looking for weaknesses
    - Make sure you have a decent “game-plan” to prepare for a sales increase
    - Insure your store is physically attractive and shopable
    - Insure your signage is attractive and properly communicates the messages you intended
    - Insure your cash-wraps (cash register areas) are organized and well stocked for a sales increase
  • Make sure your inventory is ready for the holiday period
    - Insure your merchandise is properly organized, is in-stock, reasonably priced, and is well presented
    - Insure any demo items are in good condition and present a positive image
    - Insure you have a plan to rapidly replenish fast moving items and “recover” the sales floor
    - Know and feature your high margin items
    - Perform on-going recovery at pre-set times during the day and perform store re-stocking during off-hours
    - Have a plan to deal with slow-moving merchandise (special bargain areas, clearance racks, etc)
    - Create an “exit-plan” to deal with merchandise you could not sell after the holidays are over
    - Be aware of the value of impulse items and add those to your merchandise mix as needed
  • Tune-up your customer service offering
    - Know what type of service level you want to offer – define it and manage it
    - Re-train your associates on desired customer service behaviors
    - Make it a point to observe how your associates deliver customer service and coach them with feedback to reinforce desired behaviors
    - Have a plan to deal with staffing absences in case of a call-in
  • Make sure your business systems and management reports are ready for the business increase
    - Insure your systems are efficient and can process orders, receipts, sales, returns, stock adjustments, etc productively
    - Insure your management team understands how to use your management reports and can react to what they are telling you
    - Meet with your staff regularly during the holidays to review operational plans and make sure your entire team is on the same page

Contact Pat Fitzpatrick at 770-754-5008 for further information.