Retailing is the selling of goods and services to the ultimate consumers, in the quantities they require and from places most convenient to them. Retail trades of the smallest scale—like selling of matchsticks, have entry barriers that are almost nil.
The modern consumer has got so much choice, that it is hard to lure customers to your shop. A good retailer will try to sell as much as possible to the select number of customers who have chosen to step into his store.
This is possible when a shop keeps a wide range of products that cater to different requirements of his customer. For example: any consumer has a tendency to buy only one or two toys/games at a time. Thus, in a toy shop, the bill value of any customer will be limited to the price of the games bought.
Now, if he starts keeping books and stationary along with toys, this customer will be tempted to fulfill his requirement of books and stationary from the same shop, instead of going to another shop. This results in more sales per customer, and increased profit.
While increasing the range of items at one’s shop, it is always wise to target a particular class of consumer and fulfill its requirements. Target consumers may be children, teenagers, homemakers, men, lower, middle and higher income groups.
At the same time, a toy shop housing all toys from the smallest to the highest range, may achieve good brand image, customer footfall and profits, but its average bill value per customer would not increase.
A well stocked shop is very attractive to the consumer. But it has its pitfalls. If the goods are not arranged in a logical and attractive manner, the consumer may get overwhelmed and confused. Better shop displays reduce the decision making time by the customer, leading to easy and quick purchase. The salesman’s understanding of the requirements of each individual customer plays a crucial role in increasing sales. Good shopping experience enables the customer to linger more, and buy more.
A smart shop owner will develop a product-mix for his target consumer that is a combination of high and low margin items. This will help him increase sales without compromising on his bottomline. The customers, on the other hand, happily buy more, without feeling the pinch!
Promotional offers that club two or more items together are a great way to increase average sales.
- Buy two, get one free.
- Buy one and get 40% off on the other.
- Buy a combination of four items at a discounted price.
All these offers tempt the buyer to purchase more than his requirements and ultimately fork out more money at the billing counter!
Which of these strategies do you plan to apply next?
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