Merchandising for profit in convenience stores
C-Stores often suffer from a kind of “SKU Proliferation”. An ever expanding array of products that may, or may not be earning their keep on the retail floor. Real estate is costly and always in demand, especially in smaller format stores. Vendors (and their products) regularly compete for shelf space and planogram positioning. But what about the retailer? Are they analysing their sell through data to determine what stays and what goes?
In a recent presentation delivered by Hugh Large, a respected C-Store consultant, the average North American C-Store generates $400/square foot. So in the simplest of terms, if a product, category or SKU is not hitting this metric based upon the square footage it occupies, perhaps it’s time to eliminate it from your offering. Granted, this is an oversimplified assertion that omits considerations for more effective POP (Point of Purchase Displays), planogramming and general product placement (all of which may improve sell through for a product under scrutiny), but it’s the foundational principal for determining your product mix.
Now, the more subtle aspects of improving Revenue Per Square Foot (RPSF) really boil down to merchandising. This applies not only to dry goods and non-perishables that have long shelf lives and as such are tempting to keep around for long periods, but also your refrigerated and frozen products. As a designer and manufacturer of refrigerated merchandisers, this is of course the area we shall focus on.
Here are a few key tips to keep in mind:
- The cleanliness of your merchandiser can have a profound impact on product sales. Ask yourself this question; If the merchandiser appears to be contaminated with food borne pathogens (bacteria, salmonella, e-coli etc.) would you not then assume products housed there in may also be cross contaminated? Implement a QA process that includes daily inspections (and cleaning as required)
- Broken doors that fail to close (sliders are notorious for this), burned out illumination or dated (and often noisy) equipment suggest that the cooler/freezer may no longer be operating within spec., again creating the perception that the products therein may have reached unsafe temperatures.
- Planogram using the “Eye to Thigh” principle. The fastest moving or highest demand products should be placed on shelves at or around the 60” mark. This will ensure you maximize sales lift for these items.
- Choose merchandisers that have effective location/site identification (easy to see on the retail floor) This pertains to aspects of both exterior (branded signage) illumination as well as interior illumination (highlights product facings)
- Remember the “Face Up Face Out” rule (see previous blog entry). Full merchandisers and neatly organized products sell better.
And remember, product sales analysis is not a one-time event. A lot of variables will affect product sales in both a positive and negative manner, so plan to analyze your data at minimum on a quarterly basis.
For more information on how you can use effective merchandising to maximize RPSF, call one of our merchandising gurus today!