Cost Effective Merchandising

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Cost Effective Merchandising

• Image, Atmospherics and Visual Merchandising
• .Meets Design on a Dime

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Image

• How AAA retail is perceived by consumers and
  others

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A Positive Image

• Leads to Increased Sales
• From competition
• Through penetration lowest risk, lowest cost
  strategy

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Image

• Distinct
• Clear
• Consistent
• An opportunity for differentiation
• Reflects your target market

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Abercrombie Fitch

• I dont like their stores image
• Is this good?
• YES

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Who reflects your target market?
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Target Market MixAverages are never satisfying
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Segment Answers

• What percent of your customers are 55 female
  empty nesters?
• Who is your next largest segment? ()?
• Do their needs or wants differ?

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What segments buy

• Luggage
• Travel accessories
• Auto accessories
• Kids games toys
• Publishing

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How much chocolate does the average American
woman consume?

• Chocolate number one food women crave
• Over 12 pounds per year
• Why should a AAA retailer care?

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Image

• Physical attributes
• Merchandise attributes
• General attributes
• Price attributes
• Promotional tools
• Customer service

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The Longer theyre there

• The more they buy

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Your store is a theater

• Atmospherics
• Sight
• Sound
• Scent
• Taste
• Touch

• Physical attributes
• The stage
• floor and
• walls

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What Mood are you trying to set?

• Energizing
• Calming
• Cheering
• The conundrum - non-rushed atmosphere to
  encourage browsing, provide pleasant waiting
  environment but activating enough to buy

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Sight - Color

• signal action
• influence mood
• cause physiological reactions
• raise blood pressure
• increase metabolism
• cause eyestrain

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Psychology of Color

• Warm colors (red, yellow, orange) evoke emotions
  ranging from feelings of warmth and comfort to
  feelings of anger and hostility.
• Cool colors (blue, purple, and green). described
  as calm, but can also call to mind feelings of
  sadness or indifference.

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Design on a Dime

• Painting is inexpensive
• Bold accent wall in back of store will draw eye
  and customer
• A little goes a long way
• Red energizing, love
• redneck, red hot
• Blue people more productive, least appetizing
• Blueblood, the blues

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Sound

• Often unnoticed but has an effect
• Perception of time
• Mood
• Pleasure, Arousal and Dominance
• Image - classical music-upscale, expensive
• Shop longer when unfamiliar music plays
• Interpretation age related
• Background not foreground!!!

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Scent

• Why does Disneys Main Street pump Chocolate?
• Sell a home with vanilla or cinnamon?
• Olfaction strong link to memory (affect)
• Tropical scent, clean car scent?
• experiment

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Design on a Dime

• Sound
• Rip burn from library
• Scent
• Use car Fresheners within a display
• Air fresheners are cheap!

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The Theater (Taste Touch)

• The set (fixtures)
• Interior
• functional and psychological
• clean, friendly, approachable
• floor space allocation, traffic flow patterns
• More Art than Science

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Do you have to Like it?

• NO
• Unless you are the representative of the target
  market
• If you are not
• Ask 10 platinums
• Retention, social structural bonds

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Clean, Friendly Approachable
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Store on the left

• Have to be searching for pathNot keeping the eye
  on merchandise
• Clutter implies junk

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The Show

• Merchandise attributes--The show
• Merchandise, quality, assortment

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Visual Merchandising--The Show

• Must be consistent with your store image
• Ex Luggage
• by style/color fashion-forward
• by size no-nonsense functional image
• Whats your image?

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Visual Merchandising

• Nature of the product
• hung Vs stacked
• Products profit potential
• Save your elaborate displays for high profit
  products
• Use your stars in starring roles

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Presentation TechniquesDesign on a Dime

• Idea -oriented presentation
• Present an overall image or idea
• Ex Center stage travel theme
• Promote a tropical theme inexpensively
• Posters, plastic lei, beach ball
• Surrounded by your stars
• Luggage
• Books
• Appropriate accessories

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Idea -oriented presentation

• individual items are grouped to show how the
  items can be used or combined
• Ex car safety accessories
• Themes or groupings
• encourages multiple complementary purchases

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Presentation Techniques

• Style/item organization
• all items in the same location minimizes
  perception of clutter
• organize by size

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Presentation Techniques

• Organization by color
• displays have been pulled together by a single
  dominant color
• stands out in the crowd
• a bold technique suitable for luggage not auto
  accessories
• Organization by price
• price lining

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Display Techniques

• Effective displays or efficient storage? avoid
  clutter
• Show as much merchandise as possible
• Use frontal presentations,
• turnout sample item (books)
• Increase visibility range with tilted lower
  shelves and upper signage

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Display Techniques

• Vertical Merchandising
• present vertically uses wall space and/or high
  gondolas
• the eye moves from left to right, top to bottom
• high profit product at eye level, lower profit
  lower
• color bands

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Display Techniques

• Up front sets the mood
• customers can tell at a glance who and what the
  merchandise is about
• A focal point helps define the store

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Merchandise Display

• Displays are enhanced with added attention to
  detail
• Angling
• Pyramids, think symmetry
• Patterns
• Color
• Stars asymmetry draws eye suggests star
  material

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Merchandise Display

• Shelves or cubes are full
• Stacks are neat
• Labels are forward
• Prices in place, but unobtrusive
• Never have a customer have to ask

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Do you need to have the best prices?

• Do you buy the least expensive gas?
• Convenience
• Go to the lowest price dry cleaner?
• Risk of damage
• Get groceries at Food 4 less?
• Atmosphere, selection
• Buy coffee at Starbucks?
• personalization
• Comfort zone more important than prices

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Merchandise Display

• Garnish with tender loving care...art
• Baskets and containers compliment the goods (Bath
  and Body Works)
• Display cases and merchandise have backdrops that
  seem natural to the product
• Small signs convey product information
• Luggage characteristics

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Create Focal Points

• Collection of merchandise grouped to attract
  shoppers
• Props are used to help tell a retail message
• Idea oriented presentation tropical getaway,
  luggage, guidebooks, travel accessories with a
  palm tree or tropical flowers

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Create Focal Points

• Focal areas occur at key points leading a
  customer through the store
• Professional signage helps define focal points
• Lighting is used to maximize impact and draw
  customers attention from one point to the next

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Design on a Dime Props Atmospherics for Theme

• Going down under..
• Music?
• Bee Gees ( not Keith Urban, why?)
• Display?
• Think Partyland or Party City
• Koala bear, inflatable palm tree
• Scent?
• Grapefruit tropical and energizing

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Why Chocolate?
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Affordable Penetration Promotion

• Create a promotion around the down under theme
• Violet Crumble...a taste of Australia
• Email or mail a promotionCome in for a taste of
  Down Under
• Email cheapest but whats the with your
  customer base
• Too much of a good thing
• Dont forget your image (IMC)

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Customer Pyramid
Most Profitable
Platinum
Customers
Gold
Iron
What segment costs us in
Lead
time, effort and money yet
does not provide the return
we want?
Least Profitable
Customers
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Database in the Brain (or notebook)

• If you have the expertise, start a database in
  access or excel
• If not
• Know who your best customers (80/20 rule)
• Greet them as they wish to be greeted
• Got something new they might like?...call and
  invite them in
• Do it right, or dont do it at all
• Your script is only as good as your actor

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Attract new or Retain Existing?

• Too many companies focus on attracting new
• Cell phone providers
• Credit card companies
• Cable operators
• Penetration is best
• Have your customers do the work for you
• Bring a friend for you both to enjoy a free taste
  of Australia (Violet Crumble)
• A platinum without a friend? ENJOY!

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More Design on a Dime

• Buy the best carpet pad
• Whats your pad?
• No handmade signs
• Minimize sale signs
• Computer generated on quality paper
• Can get your ideas at commercial display stores,
  but buy at Party or Closeout stores
• Big Lots, 99 store

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Design on a Dime Promotions

• Themed
• Down under, Springtime in Paris
• Car Accessories
• Make your New Years resolution to be safe
• Fathers day for the man who has everything..
• Grantravel
• Going Disney?
• 21 of trips with kids (6 - 17)1
• Kids displays for kids or for Grandparents?

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Image is Art and Science

• The stage--the physical space
• The set--the fixtures
• The show--your merchandise
• Attract and Penetrate
• Be sure to assess a theme or promotion

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Image

• Physical attributes
• Merchandise attributes
• General attributes
• Employee appearance
• Price attribute
• 9.99 or 10.00?
• Promotional tools
• Customer service

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Customer Service

• A Customer is the most important visitor on our
  premises. He is not dependent on us we are
  dependent on him. He is not an interruption in
  our work he is the purpose of it. He is not an
  outsider in our business he is part of it. We
  are not doing him a favor by serving him he is
  doing us a favor giving us an opportunity to do so

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Every Encounter CountsLoyalty is slow to build
quick to dissipate

• Recovery paradox
• Once is enough
• Prospect Theory
• Losses loom larger than gains
• Only the completely satisfied come back
• Retention rate of satisfied average 35
• What do you do in a tight labor market?

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Never the twain shall meet

• Free and fee
• AAA is known for free books. If they are in the
  store display area ..
• Excellent signage is a must
• Separate books for sale
• No distinction.no profit
• Kids cant be too hands on
• Damage cuts profits

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Resources

• Servicescapes the impact of physical
  surroundings on Customers and Employees Journal
  of Marketing April 1992
• http//www.fragrant.demon.co.uk
• http//www.naha.org./Whatisaromatherapy
• Contemporary Visual Merchandising Jay Diamond,
  Ellen Diamond
• Internet best Google search scent, colors and
  images for ideas