Inventrak Blog

At your store, in order to increase customer spending, you can display and sell “Packages”. Selling a “package” means that you sell two or more products together.

For example, in order to motive customers to buy a slow turnover cap with a price of $80, you package a $150 shirt (best seller) with the cap, and sell this package for a lower total price, say of $ 215.

You should not have too many packages at your store at the same time, because it will probably lower your store brand value in customers’ mind. Displaying one or two “packages” will be ideal, and you can sell different “packages” from time to time.

There are several ways to “package” products:  

“Package” hot products with slower moving ones:  we have already mentioned this way above. If you want slow turnover products to move faster, this is a good way to try.  

“Package” frequently bought together items: based on your experience or transaction history, you can pick up frequently bought together items, and form some “packages”. Then, you can display these “packages” at your store.         

“Package” related items: another way is to “package” related items based on your own intuition. For example, you can try to “package” two caps together in order to sell them faster.           

Caution: you should “package” items from the same category or from similar categories. “Packaging” a bottle of coke with a cap does not make much sense!

The 2009 holiday season is right around the corner. Are you ready? Here are some marketing tips for this upcoming holiday season:

Offer your customers what they are interested in. You can figure out what your customers like by looking at their transaction history, especially by looking at what they bought during last holiday season at your store. Then, you can send out a newsletter to offer your customers what would interest them the most.

Promote your gift cards. Gift cards are a good gift choice. You can send out your gift card promotion by email or directly promote to your customers when they check out at your POS terminal. In order to promote your gift cards, you can offer a discount or a special gift to those who purchase the cards.

Offer gift ideas. Offering gift ideas can make your customers' lives much easier. Everyone is trying to figure out what to buy for their friends and family. Through email or mail, you can send out gift ideas to people based on your experience.

A loyalty program helps retailers by  
• Building trusting and positive customer relationships
• Increasing customers’ spending
• Strengthening the brand
• Decreasing price competition with their peers
• Decreasing marketing costs  

One key to a loyalty program is targeted marketing, which allows you to focus on your various customer types and customize rewards to best suit those customers. For example, some customers are of high value, i.e. they make a great contribution to your sales and gross margin; others only come to your store to get a product which is on sale. High value customers might come back because of your special service for them, e.g. a private sale. You want to deliver the right benefits to the right people so that you can get the most from a limited investment in your loyalty program. 

The first step to building a loyalty program is to identify your customers’ value and segment them into different categories. What categories should you have at your store? It depends. Best Buy create some categories based on the level of "tech oriented".  

After segmenting customers into categories, retailers should use targeted loyalty programs tailored for each customer category’s needs and desires. How this is accomplished will vary by types of items sold, the value of each customer, and customer categories serviced, among other things. For example, luxury store owners do extremely targeted marketing (the loyalty program strategy is generally called “client telling”) aimed at their best customers and based upon the loyalty program and sales associates’ personal knowledge of the customers’ shopping preferences. 

Most retailers cannot justify the high cost of the client telling approach, so more modest, but still targeted approaches can be used, such as targeted direct mail and e-mail. You can send personalized promotions/services/rewards to customers from different categories based upon their preferences, purchase history, manufacturer-funded discounts, inventory levels, and so on.

Retailers spend money on marketing in the same way as stockbrokers speculate on the market.

During good times they spend money on any new fad or idea that they hope will rapidly grow their business. In dark times, like what we are experiencing at present in certain economies, they go into their shell cursing all of those supposed great ideas.

Cutting back drastically on marketing is a bad idea. When times become good again, the market will only remember those who were always present. Stopping spending on marketing altogether is the ultimate sin a retailer can make.

If you treat marketing as an investment, instead of an expense or a gamble, you start to make smarter decisions. Yes, there is risk involved. The more aware of where your retail business is at in the business life cycle or economic cycle, ensures that you spend your marketing dollars on higher return investments.

With less people walking through your doors, the worst thing you can do is spend more cash in the hope that this trend will dramatically change. Holding sales events to drive customers is also a bad idea, because you reduce margins along with increasing the volume of transactions. Higher volume of transactions means more stock to process and more people to process the sales; this leads to higher wage costs and low gross margins which equal death.

Now is the time to move most of your marketing dollars from customer acquisition and brand building activities to customer retention strategies i.e. your customer loyalty program. Here are some of the things you can move your dollars into;

- Increased floor coverage especially in peak times: I can hear you now "This is not marketing spend". Yes it is. Sales and marketing is the same thing - they both try to get more customers. Having adequate floor coverage increases conversion rates and also average customer spend.

- Commission for sales staff: I have seen commission programs being implemented that have doubled conversion rates overnight, and at most a couple of months. If you want to change the behaviour, change the motivation.

- Loyalty program: Sign up as many people as you can. If you can have 25% of your business being repeat loyal customers you can ride through any economic cycle. Your friends remember you in good times and in bad.

- VIP events: A quick way to inject some much needed cash in the business, and also to reward those who are loyal to your business. Make sure when you have a VIP event, that you extend the invitation to 2 of their friends (helps increase your database).

- Commission/prizes for loyalty program sign ups: Reward your team for building one of the best assets your business can have.

- Incentives for the profitable loyal customers: Even if you have a large and healthy database, within this is are sub groups of profitable, break-even and loss making customers. Focus on the profitable that drive your business, and give them incentives to spend more within your stores.