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Best Business Practices:

Business Tune-Up: Merchandising 101

By Dave Schenk H-P Products Inc.

In the retail industry, there are many competitors trying to sell to your target customers. Many stores sell the exact same or similar products and differentiating yourself can become a challenge. How you present your business can be the one factor that sets you apart from the others. Putting in the extra effort with your displays and merchandising can not only increase sales, but can also help you create an identity for your store.

John from Pennsylvania has owned his business for a few years. Displays and merchandising have never really been a top priority at his store. He writes, "My main focus has always been sales and customer service. Merchandising was always thought of as an unneeded expense. Now I'm realizing it could actually work together with sales and should have been part of my business plan from day one. What are some best practices for displays and merchandising?"

The ultimate goal of merchandising is to increase sales. Think of your showroom as well-trained salespeople. They should be attractive, clean, up-to-date and well spoken. Your store should carry these same traits. It should be inviting, well kept, have new products and contain easy-to-understand signage. It should NOT have light bulbs out, vacuum hoses cluttered around on the floor, products no one uses anymore and signage that catches no one's attention, or even worse, uses loud, obnoxious graphics.

A merchandising plan can help you create an ideal showroom, but there are a few things you need to consider before you begin. The basics include: the customer, visual balance, lighting and use of space.

The Customer
A clean store with organized product groupings not only attracts customers but it also encourages them to return. On the other hand, a cluttered store can come off as a "bargain" store and therefore, customers will expect bargain prices. Your store should be designed around who you want your target customer to be. What is their age? How much money are they willing to spend? What's their style? What interests them? Customers are much more attracted to products they can picture using in their everyday life. Show the product in use or in a way that relates to the customer.

Visual Balance
Once you've figured out who your customers are, you need to think about the visual aspect of your displays. A loud and obnoxious display is just as bad as a boring and dreary display. You should be somewhere in the middle with the focal point at eye level. Make sure your visuals attract, rather than repel, customers.

Displays should have visual balance. Larger, darker items should be placed near the bottom of the display and lighter items should be at the top. Too many products in one area can make your display look unbalanced.

Lighting helps lead customers into a store, makes products look more appealing and encourages customers to stop and look. It is among the keys to a store's image and can affect sales. Here are a few options to consider:

General Lighting – This kind of lighting is often used in mass merchandising or discount type stores, think Target or Lowe's. If you have a larger store general lighting may be used but it wouldn't make sense in a small shop.

Accent Lighting – If you want to add depth and create a focal point for merchandise, accent lighting is a good option. It establishes the importance of certain objects through the use of contrast and should be used in high traffic areas of the store.

Ambient Lighting – You can use ambient lighting as overhead lighting. It lights the entire store, so it should be bright enough for customers to see what they're looking at, but not so bright that they have to squint.

Use of Space
Product and display positioning are important factors when it comes to using space. An effective floor plan encourages customers to shop the whole store. The easiest way to get customers through the entire showroom is by putting clearance and sale items in the back. This makes customers look, or at least pass, new merchandise along the way.

Putting the most popular items toward the back of your showroom is another effective way to get customers to shop the store. You may notice grocery stores do this by putting eggs and milk far away from the entrance. If customers really want something, they'll hunt for it.

The front of the store should be reserved for brand new merchandise. Placing it here will give it the best chance possible to succeed.

If you think of your store as the ideal salesperson, you'll automatically improve the look and feel of your store. Thanks for your question, John, and good luck with your merchandising initiatives. As always, please keep those central vacuum sales, marketing and installation and business management questions coming!

Ask Dave is a monthly column authored by Dave Schenk, OEM Products Manager for H-P Products and a 36-year veteran of the vacuum industry. If you have questions, concerns or tips that you'd like to see addressed in future columns, send them to Ask Dave, Dave Schenk, H-P Products, Inc., 512 Gorgas St., Louisville, OH 44641; phone 888-292-4407 x2280; fax 330-875-7584; or send an e-mail to dschenk@h-pproducts.com.

Reprinted from Floor Care & Central Vac Professional, November 2012