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Bicycle Retailer Minute Makeover Series - Episode 4: Add-On Sales

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Click Here For Episode 4 Video - Add On Sales

By Gregg Frederick

Editor's note: Gregg Frederick, CSE, MBA, is the principal of G3 Development Group, Inc., a consulting service that focuses on engagement through business development, retail development and human capital development. Follow Gregg on Twitter @g3leadership and on Linkedinwww.linkedin.com/in/greggfrederick

A key to growing your profitability is to perfect the art of the add-on sale. Whether in wholesale or retail sales, the most successful salespeople are those who add value to the customer experience by providing the customer with the product they need to enjoy the ride from day one.

As a retailer, providing a superior customer experience (CX) allows you to meet the expectations of today and tomorrow's consumer. The Retail Remodel projects that we've done with Bicycle Retailer, 3 Dots Design and Merchandising Werx have allowed us to create a visual environment that is conducive to creating a superior CX, but at G3 Development Group, we work with the retailer to maximize the CX by training the retailer on ways to engage them in-store and online.

To start on your CX journey, you must define the emotional outcome you want your customer to have when they leave your store. Everything you do and every product you have should have a purpose leading to that outcome. When your products complement the CX outcome that you've defined, you are on your way to maximizing the CX through the add-on sale.

To maximize the add-on sale, the Units-per-Transaction (UPT) calculation should be tracked. You should incentivize your sales staff on UPT goals. For one of our clients, we were able to get UPT from 1.75 to 3.75 in three months with a goal UPT of 4 (for every bike sold, there should be a helmet, lock, bag, cage, pump, lights, shoes, gloves, etc., suggested to go with it). Along with the growth in UPT, we saw an increase in P&A margin of 7 percent!

UPT is so important to us at G3DG, that we've influenced one of our brand clients to create a hang tag with a checklist of aftermarket products listed on them as a reminder to the retail sales person and the retail customer to not forget those high margin necessities that enhance the riding experience, i.e. the customer experience.

Like it or not, Amazon has mastered the art of a comprehensive shopping experience and you can take advantage of some of their best practices to increase add-on sales. The easiest to take advantage of is their ability to provide great recommendations on related products, also known as "affinity sales."

A well-merchandised store takes advantage of these affinity sales by grouping like items together. For example, create a well-merchandised area for inflation so that during the sales process your trained sales people can walk the customer through the necessities that will make their riding experience seamless, like floor pumps and CO2's. You can also do the same for apparel, helmets, locks, lights, shoes and socks.

We've seen tremendous success at retail using accessory sales packages as a way to create sales velocity around add-on sales. With a three-tier package, you can sell the cycling essentials together (helmet, lock, bottle and cage) at a discount over buying them individually, driving up UPT and gross margins.

Finally, up selling should not just be for the sales staff. The importance of using the service department to drive add-on sales should be a main part of your CX strategy. According to Joseph Michelli, the author of Driven to Delight, the lifetime value of the Mercedes Benz customer is linked to the customer's willingness to maintain a relationship with its service department. For many IBDs, the service department is often an afterthought, but has a huge potential to drive add-on sales through service packages.

According to Forrester Research, 90 percent of sales still come from physical retail locations, but the gap between meeting today's customer expectations at the IBD and what the customer receives online, is widening. With a focus on the customer experience, a highly trained sales staff, focused sales goals that include UPT tracking, and creating sales velocity around service and accessory packages, you will be able to drive your profitability through increased add-on sales.

Bicycle Retailer & Industry News Minute Makeover Series - Episode 3: Apparel

The apparel department can be a profit center - it just needs the right mix of product, merchandising and placement to do its job. Generally we place the apparel section at the front of the store, mainly to give it the most exposure.

Softgoods do bring personality to the store. It's something everyone can relate to - you know, clothing! It makes even the most novice rider feel like that is a section of the store they understand. Most importantly it is something that brings freshness to the store every season. It is important to have a good selection of styles and sizes, as that is what the consumer is used to when buying apparel.

Merchandising is creating those visual impressions. As apparel is a spontaneous buy for the most part, it is important to create as many visual impressions on the wall as possible so the consumer sees the apparel selection coming into the store and leaving the store. They may not buy it this time, but if you did a good job merchandising it will remain in their mind for a possible later purchase.

Creating stories, both in the form of color or telling a technical story, will increase sales. If you have bought the apparel correctly you will be able to create color stories and outfits. Women especially respond well to having outfits laid out for them. Placing a jersey, jacket, shorts, socks and gloves that go together in the same section will cause them to buy something they hadn't intended to buy - the whole outfit. The same idea can be followed through with a technical story all grouped together in the same section.

Men's and women's sections should be separate whenever possible. Sales increase when the consumer knows which section they need to be in to shop for themselves. Mannequins are the best way to differentiate these sections. Cycling apparel has low hanger appeal, meaning it generally doesn't look good on the hanger, so, forms and mannequins leave out the guesswork. The consumer can get a better idea of what garments look like on and are more apt to purchase products displayed on mannequins.

Learn how to use visual merchandising, color stories and mannequins to better sell apparel in the third video in Bicycle Retailer's Minute Makeover series on youtube.com/bicycleretailer.

Click Here For Episode 3 Video: Apparel

Great Trends For Revitalizing Your Retail Bike Shop Design

When it comes to remodeling, bike shops around the world are pushing the envelope and bringing great design ideas to retail shop design. If you want your bike shop to look cutting edge and updated, here are 3 major bike shop retail design trends.

  1. Mix of natural with the industrial. When it comes to shop remodeling trends, stores are mixing natural woods with clean lines from concrete floors and brick walls with metal fixtures. With bikes standing out against warm wood tones while blending with industrial metal accents, sellers are able to present the dual nature of bikes as mechanical yet connected to the outdoors. Handsome Cyclesis a good example of this blend of natural colors with an industrial twist.
  1. Feature bikes on walls.  In addition to the necessary racks of bike inventory, the trend is to pull unique bikes out and feature them in a highlighted display on the wall. This is a great way to break up a group of bike racks and also a good way to engage your customer with a clearer presentation of the features on the highlighted bike. The Factory Five Boutiqueexercises this trend in a great way, showcasing the fixed gear frames for visitors on their walls and hanging from the ceilings. Not only does it draw color to the walls, but visitors can get a good look at every part of the frame without moving the bike. And given its position on the wall, the frame looks as light as it is, making riders more susceptible to seeing the advantage of the frame.
  1. Bright and bold colors for visibility. As more and more people want bikes for commuting, bike shops are displaying their wares with a mix of bright and bold accents that bring bikes and accessories to the forefront. Displaying bright products--such as reflective materials, neon-colored clothing, and colorful helmets or handlebars--gives consumers a sense of safety, visibility, and forward-thinking when looking at bikes in shop. Playing with these bold colors can add great interest to your shop.

For more design ideas and inspiration as well as versatile fixtures for displaying your product be sure to check out our website.

Good Merchandising Will Help You Sell More Product

The Impact Good Merchandising Has On Your Sales May Surprise You

Have you ever walked into a hardware store or an auto parts store and stood scratching your head, wondering which direction to go to find that one tiny part or piece you need? Maybe you have found yourself in a retail or sporting goods store, trying to figure out where on earth to find golf balls or spikes & poles to set up a volleyball net for your July 4th bash. We have all probably found ourselves in situations similar to the ones listed above or other equally daunting tasks at one time or another.

What is the one thing in all the above circumstances that could make finding that 'needle in a haystack', so to speak, a little less frustrating? The answer is MERCHANDISING! When you walk into a large store, finding something you need or finding a salesman to help you out are difficult tasks. However, with effective usage of signage throughout an establishment, store navigation and satisfied consumers could be as simple as color coding or placement.

Another effective way to merchandise products in a way that may encourage customer purchases is through proper presentation of apparel, household items, sporting goods, etc. on well-designed, merchandise-friendly racks and fixtures. A well-placed wall fixture or specialized product rack, coupled with colorful, eye-catching signage promoting price points and other pertinent information could be the difference between a buyer and a browser!

With so many retail options and different product types being thrown at us through media representation, whether in commercial form, print ads, or internet sales & promotions, sales establishments need to present their best face through well-thought-out merchandising and advertising techniques and budgets. The impact good merchandising has on your sales will not only surprise you, it will make your customers happier, therefore increasing the likelihood of high sales retention and customer loyalty.

3 Pro Tips That Show Why Your Retail Space Needs an Effective Signage Package

Why Your Retail Space Needs an Effective Signage Package

The importance of an effective signage package cannot be overstated. According to a survey by Ketchum Research and Analytics, 76 percent of consumers have chosen to enter a store they had never visited before based purely on its signage. Perhaps more importantly, 68 percent of customers admit to having made product purchases after a sign caught their eye.

When considering the effect of signage on your retail space, it is good to remember the ABC's. Effective signage:

  • Attracts new customers
  • Brands your retail space in the minds of customers
  • Creates increased impulse sales

Attracting New Customers

First and foremost, your signage outside and inside your retail space should be designed to draw the eye of passing customers. While it may be difficult to afford a massive marketing campaign to garner customer attention, well-designed signage is both affordable and effective. Unlike other forms of advertising, signage works for you 24/7, piquing customer interest in your products and driving traffic into your store.

Branding Your Retail Space

If your company has a trademark or logo, your signage should contain its image both outside and inside the store. Repeating text and images throughout your store via signage keeps your brand in the minds of your customers. The more consistent your signage is, the better your customers will remember the uniqueness of your retail space. Use your signage to make your brand more visible, more recognizable, and more conspicuous.

Creating Impulse Sales

Studies of retail shopping behaviors indicate that 68 percent of purchases were unplanned during major shopping trips and 54 percent on smaller shopping trips. Clearly, impulse sales account for a large percentage of total sales for a retailer.

Effective signage encourages impulse purchases by drawing the consumer's attention to the areas of your store that you want them to see. An attractive sign is both memorable and enticing. According to the Ketchum study, 68 percent of customers believe that a store's signage is a reliable indicator of the company's products or services. 

What does this mean for retailers? Simply put, your signage establishes your reputation with your customers, at least partially. Customers tend to believe that a company with a poorly designed or unattractive sign is likely to offer an inferior product or unprofessional service.

Location, Location, Location

Effective signage works not only on the outside of the store to bring customers in, but also on the inside of the store as well. In-store signs introduce customers to special products, promote sales, and give customers the information they need to make a purchasing decision on the spot. In-store signage coordinates your brand message throughout the customer browsing experience.

How to Make Your Signage Stand Out

To make the most of your signage, it is important to ensure that it meets the following criteria:

  1. Quality production: The days of hand-written, misspelled signs is definitely over. Modern consumers expect quality signage.
  2. Simple color scheme: While you want your signage to catch the eye, you do not want it to assault the eye.
  3. Easy to read: If customers cannot easily decipher the text and images on your signage, it will lose its effect quickly.
  4. Simplicity of message: Your message should be short and sweet. Longer messages slow down a customer and make impulse shopping less likely.
  5. Proper placement: Your signs should be placed in the areas you want your customers to browse. However, signs should never be placed in such a way that customer traffic is impeded, or merchandise is blocked.

If you follow these general guidelines, your signage will drive traffic to your retail space and promote sales. If you would welcome additional information about how to make your retail space all it can be, please contact us. We will be glad to work with you to promote your store in the best way possible.