Bricks-and-mortar retail is struggling at the moment and no relief is in sight. Amazon is about to open in Australia, online retail continues to grow remorselessly and shoppers are feeling the pinch of low wage growth.
Now is the time to look for every competitive advantage you can find to loosen shoppers’ purses and product range is one advantage you can harness. In fact, I would argue it is one of the most important.
Product range competitive strategy can be used by nearly all retailers to get shoppers to spend in their stores; you just need to understand a little bit of shopper psychology to bring this to life.
Here are some fundamental product range strategies you can use relatively easily to unlock shopper spend in your store.
Get rid of the duds
We walk retail stores a lot and the number of retail outlets with slow selling (even non-selling) products taking up valuable selling space is often astounding. Yes, you’ve spent hard-earned working capital on these products and, if you’re stubborn, you’re still thinking these products will move.
Hot tip: if you’ve presented them properly, advertised or made prominent and priced competitively and they’re still not moving, get rid of them. Your POS system will have a slow sellers report, run it and kill the slow sellers. Don’t set up a clearance table/area—the message this sends to your shopper is not positive. Instead, you are best to get them out of the store through the myriad resellers that specialise in doing exactly this.
New products are like gold
Shoppers love new and they especially like to be first in their social groups to own an item. This can generate very positive word of mouth for your store. Your suppliers will be launching new products, find out when they’re coming and go after them. Display them prominently in a high traffic location in your store with a big ‘NEW’ sign. You’ll make shoppers curious and they will buy.
There are also products that are not necessarily new to market but may be new to your store. Again, the key is shopper psychology—people love new and are curious. Just make sure your display is bold and says in no uncertain terms ‘NEW’.
Your suppliers are a fountain of information
Suppliers supply you but they also supply other stores, whether this is in your area, outside your area, and even nationally. Engage them in open conversation about the trends are they aware of and what are others selling that you are not.
You may be surprised at just how useful suppliers are and how willing they are to help you. After all, if you sell more, so do they. And at product level they have the best data. Just make sure you only engage the suppliers where you have trust, you don’t want to fill your store with stock a supplier cannot sell anywhere else.
Walk your competitors's stores
Look for what they’re ranging and, critically, what they’re not ranging—you just might find you are ranging products they don’t have. If they’re selling in your store, you have a differentiation advantage. Find the gaps and drive them hard, great display merchandising is, as always, the key.
Trend is your friend
In every retail category or segment there are trends. In children’s, educational and coding toys are hot. In the electronics world, ‘no cables’ is on fire. In tyres, ‘low rolling’ resistance that enhances fuel efficiency is hot. These trends are trends because shoppers are demanding them. In line with new, trend products and who has them drives shopper patterns. If you’re known for being ‘on trend’ because of your product ranging, you’re in a fantastic space.
Use Amazon data
Does this sound daft? Amazon makes available the data of its best-selling products in the enormous category sets in which it operates. Sure, it is US data, but the Australian and US shopper are about 80 per cent similar, usually time is the difference (we are often years behind the US). But the data is still extremely useful as a guide. Get it, interrogate it, throw your Australian ‘lens’ across it and let it guide you.
Your product range can and should be your competitive advantage. You have to work your range constantly to achieve this. There is no standing still in retail, movement is life and motionlessness is death. Use your POS data well, and at least monthly, to keep your product range fresh, alive and driving growth.
Michael Stafford has 20 years’ experience in retail domestically and overseas. He founded 6seed to help small and medium sized businesses to grow.