Promotions & Opening Price-Points are Key to Success

By Ken Soens

Ken SoensRetailers need to look for ways to increase sales and margins, and one good option is opening price-point merchandise. Opening price-point merchandise in a general merchandise/variety store fills a void between in-line programs and promotional merchandise, without jeopardizing sales.  Many buyers initially think they are trading dollars, until they realize that by offering a lower price-point option, it actually increases their overall sales. It gives the customer a choice to purchase something rather than nothing, or leaving the store and shopping elsewhere.

Today, value-driven merchandise is seen almost everywhere. Hardware, grocery and drug stores are all adding more general merchandise and opening price-point items, to increase their average sales per customer.  The thinking is that by offering convenience and one stop shopping, consumers will stay in the store longer and increase a merchant’s bottom line.

Offer private label and off-brand

Disposable income has shrunk, and customers on a fixed income have to make tough decisions every day on how and where to spend their money. In today’s economy, people are willing to trade down on brand name and to purchase off-brand or private label items. You just cannot afford to ignore that important customer base.  Look for vendors who offer items in floor and counter displays, or on pre-loaded merchandise strips for ease of getting product to the sales floor with little labor. Pre-packed goods actually save storeowners money.

Simple, concise price-points make the buying and shopping decision for the consumer easier. Clearly label items and promote with signage throughout the store.

Independent storeowners are constantly fighting a battle with big box retailers, and have to find ways to be unique over their competition. One way to do this is to expand price points. Many dollar stores are slowly converting to a $1 to $5 dollar price point, with an emphasis on multiple sales such as two for $3 or three for $5.  Simple, concise price-points make the buying and shopping decision for the consumer easier. Clearly label items and promote with signage throughout the store. When buying an item to promote, make sure that you buy enough to let the customer know that this is a special buy, and they better buy it now or it will be gone.

Get informed

Independents should review trade journals, visit websites and seek out new vendors, in addition to attending several industry trades shows throughout the year to stay on top of new items, closeouts or continuity programs. An informed owner/operator will be more successful, because they recognize what product is available for them to sell. Finally, tap in to your sales people and ask them for their suggestions. Learn what items are new and trending. A good salesperson will always have your best interest at hand, and help you to remain successful.

Comments

  1. Gail Clements says:

    Hi Ken,

    I’m about to jump in to the retail business. I have no retail knowledge and need help getting started.

    What do you suggest? My background is real estate. My ideal is to purchase unique and different products for resale. I pickup some items from yard sales, thrift/estate sales. Also get stuff from foreclosure properties.

    I do have a mentor.

    I do appreciate any advice you can give me. Thanks!

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