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The end of impulse?
  by John Stanley

     As retailers, we are brought up to believe that there are two types of buying modes: The consumer is either buying a purpose item or an impulse item. Our stores are then laid out strategically to encourage impulse sales, especially as impulse sales are often 60 percent of total consumer expenditure in many retail operations, and these products are often sold at a higher margin.

     The recession loomed onto the scene and changed shopping habits. During a recession, impulse sales naturally decrease across the board, and this was true of the recession we have just experienced.

     As we move out of the recession, consumers have changed. Impulse is now not what they are looking for; they now want information. The game rules have changed.

     You may think that this is where your sales staff come into their own. Sorry, this is not the case. Our own research in March 2010 indicated that 61.8 percent of consumers believe product knowledge provided by salespeople has declined in the last five years. Consumers now rarely trust the advice being provided by salespeople.

     Research published by David Evans, the CEO of SPOS Group, and reported in the May 24 edition of Inside Retailing, mentions that the “Information” trend started in the USA, and customers want information to be next to products, without salespeople interrupting their shopping experience. This means that we need to rethink our whole merchandising strategy if we are to be in tune with consumers and grow sales.

Information Strategies
     As a retailer, you need to have an information strategy that helps consumers as well as provides you with the retail high ground as the expert in your area. In today’s retail environment, the competition is not just other physical retailers, but online retailers as well.

     So what steps can you take to own the high ground in the information stakes?

  1. Have a signage strategy that tells customers what a product is; provide three benefits and the price. This has been a golden rule of retailing for decades and still applies in the social media era.

  2. Accept that in today’s market, it is the manufacturer or producer that is the real hero, not the salesperson. Introduce the supplier into the communications chain. Consumers now want to know about the makers of the products, not the seller. This means you may want to place a picture of the producers next to the products or even details about the producers’ Facebook page or web page. The provider now needs to be the retailer’s partner in the supply chain. This will result in a whole new thinking process in supply-chain management.

  3. Position leaflets in holders next to the products. Leaflets on the products you are selling make sound like a dated idea, but in this information age, there is a role for leaflets that explain about the product.

  4. Use technology. You may want to provide a YouTube link that explains how to use a product. You may want to place a TV monitor next to a product that explains the attributes of the product. You may wish to use a quality-control (QC) bar code that can be linked to a web page and downloaded onto customers’ mobile phones.

  5. Displays and merchandising are still important in the process, but make sure displays are educational and tell customers how they can use the products. You may have to link together a number of products to tell the story for consumers.

  6. Rotate information to avoid overload. Strategic communications is still part of the game rules; if you place information boards next to all the products on display, it is going to confuse consumers and they will get information overload. Decide what you want to sell at any one time, provide the information and rotate it on a regular basis. This will improve the knowledge base of your team, plus customers will be provided with a larger knowledge base because when they return you will be exposing them to new information that they are more likely to read and absorb.

  7. Increase sales with social media. Research indicates that when consumers communicate through social media, sales go up. Therefore, join in the social media conversation and get them to share their ideas on your social media pages as well. This gives you an opportunity to share knowledge with consumers.

Is It the End of Impulse?
     Impulse sales will continue; they are a lifeblood of retailing. What has changed is the way consumers are buying impulse lines. It used to be if something looked good, people would buy it. In today’s retail world, if something looks good, consumers want the knowledge and information required to move from “lookers” to “buyers.”

     We are entering a new era of retailing and all retailers need to re-evaluate their present retail offers and question whether they are presenting products in the right way for the new consumers.
 


John Stanley (CSP) is among the top 10 percent of speakers in the world today, an acclaimed retail consultant and WA Entrepreneur of the Year 2009. The author of several marketing, customer service and retail books, his company is WA Small Business Champion 2009. Visit www.johnstanleyretailguru.com.au or www.johnstanley.com.au.


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