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Opportunity Maximizers • Articles • Turning Browsers Into Buyers

What if half the people who currently wander in and out of your stores without buying anything were suddenly to become paying customers?

BY I. MARTIN JACKNIS

At Calico Cottage Inc. we provide fudge-making equipment, ingredients, and merchandising expertise to retail shops all around the world, including many large theme parks. To ensure that our customers achieve their objectives, our representatives spend a lot of time in the field sharing their insights with retailers as to how they can turn browsers into buyers. By following a few simple steps, most of our retailers convert an average of 40 percent of the people who come into their stores into fudge buyers.

Here's an example: In a small tourist location on the Eastern Seaboard, two Calico customers operate within close proximity to each other. At the first store, the owner averages $220,000 a year in sales and $170,000 in profits from his fudge counter. About a mile away, a second Calico customer barely clears $17,000 a year. The second store has more square footage and a much more desirable location, yet the first store generates 10 times more in sales and profits.

How is this possible? The owner of the first store pays very close attention to three critical retailing factors: strategic hiring and deployment, proactive merchandising, and multiple merchandising strategies. By properly employing these methods in your theme park retail shops, you can dramatically increase your sales and your bottom line.

Strategic Staffing
It all starts with sales. In any business, having the right employee in the right job is a good idea, and not just high-level salespeople and executives. Even hourly wage employees who work your retail counters should be carefully chosen. The trick is identifying potential employees who love to interact with customers and have an innate, naturally friendly sales mentality.

Large theme parks hire hundreds of people during the peak season, most of them at near-minimum wage. Yet, too often the hiring managers give little or no thought to which people should be placed in what jobs. But suppose the person who ends up behind the retail counter is shy and bashful, while the person stacking boxes in the stockroom could sell ice cubes in Antarctica? You could be losing thousands of dollars in sales simply because no one took the time to identify this natural-born seller and put him or her behind the retail counter.

There are dozens of good tools on the market that can help you evaluate personality traits, work styles, and other important factors. Most of them are easy to administer, and with a minimal investment you can easily determine which new employees will thrive in a customerservice environment, which should work behind the scenes, and so on. These tools can also help you evaluate existing employees and make sure you don't have any square pegs in round holes.

"But wait!" you cry. "With today's labor shortages I'm scrambling just to find enough people to keep the doors open. I don't have the luxury of hiring only motivated, proactive sales people." Granted, in today's markets you have to hire from available labor pools. But once you get enough warm bodies, it only takes a little more effort to place the right people in the right jobs. Even if you're forced to hire marginally competent people, having a marginally competent sales personality behind the counter instead of a marginally competent introvert can mean thousands of dollars in additional profits from one single employee. Multiply that by the number of retail positions in your park, and you begin to see the impact it could have on your bottom line!

To maximize sales, you must have employees who enjoy interacting with people. Ideally, you want to have highly skilled sales people in the revenue-producing jobs. But if you can't have that, at least take the time to identify the best of what you have and put them where they can make a difference.

Proactive vs. Reactive Merchandising
Most retailers take a reactive approach to merchandising their products. It works something like this: You neatly arrange your products on display shelves and hope that at least one of them reaches out to a passerby and says, "Psst! Come buy me!" If and when that happens, you have a customer and a sale. If your products don't grab the shopper's attention, though, you end up with a browser rather than a customer. In that situation the browser goes away unsatisfied, and you lose a sale. If your browser-to-customer ratio gets too far out of whack, you have to mark down your merchandise and, eventually, close the shop.

Reactive merchandising assumes that the "four Ps"-positioning, packaging, pricing, and promotion pack enough horsepower to do the job. This may have rung true in the past, but in today's highly competitive retail environment, the four Ps won't necessarily set you apart from the competition or motivate your customers to purchase merchandise. Most retailers have good products and placement, and many know how to price and promote them. This "browser dilemma" can be solved by engaging in proactive merchandising: by strategically locating a proactive sales clerk and an item (or items) so that you can consciously, deliberately, and positively influence the customer's decision-making process. In other words: To stand out from the crowd one must proactively engage customers in order to change them from browsers to buyers.

I'll use our fudge retailers as an example. Several years ago we conducted extensive in-store research on the buying patterns of fudge customers and found that if our retailers offered a free taste to everyone who walked past the fudge counter, more than nine out of 10 would take it. Of those who accepted the taste, 75 percent would then purchase some fudge. The trick to achieving the high conversion rate, we discovered, was that the counter clerk had to proactively offer the fudge. Having a plate with samples sitting on the counter was not enough to stop people in their tracks. The clerk had to step forward, with sample in hand, and cheerily offer, "Have a taste of our delicious fudge!"

We also discovered that the location of the fudge counter played a major role in achieving a high sampling rate. To intercept as many customers as possible, we had to position the counter near the main register or close to the main exit door. We also learned that by offering an incentive for large purchases, a certain percentage of the buyers would accept. By doing these simple things, our retailers increased their fudge sales and their profits by three, five, and, in some cases, 10 times their original level. Why does this system convert so many browsers into buyers? Because it puts you, rather than the customer, in control of the shopping experience.

As a retailer you have a choice. You can sit back and hope for the best, or you can proactively involve yourself in the buying process and take more control over the outcome. If you truly have a unique product that can catch people's attention, the four Ps may still work for you. But if you would rather not leave your bottom line to chance, find a way to intercept your customers and engage them with proactive merchandising.

Multiple Merchandising Strategies
During the day, most theme park visitors hold off on buying retail merchandise because they don't want to carry it with them all over the park. Just before closing time, however, hordes of eager customers descend upon the retail shops in a last-minute quest for souvenirs, gifts, and remembrances of their special day. Often, these "feeding/buying frenzies" generate up to 70 percent of the day's total retail sales. Yet, many parks lose a huge amount of additional profits during this time because the merchandising strategy employed earlier in the day will not work during these hours. In fact, it may actually drive customers away by causing traffic jams.

Nothing turns off customers-especially those in a hurry to beat the crowd home-like long checkout lines. Many people who have already made the decision to buy will change their minds when they see a long line, either because they don't want to wait or they don't have time. Obviously, you can't avoid lines, but you can shorten them by employing a different merchandising strategy, one that takes into account the unique characteristics of these busy hours. When people see short lines that move quickly and efficiently, it greatly improves the odds that they will stop and make that purchase they have been thinking about all day long.

During the day, when traffic in the shop is slow and browsers outnumber the buyers, the appropriate strategy involves proactive merchandising: for example, offering free samples and talking to your customers individually. As feeding-frenzy time approaches, however, a different strategy is required. As shoppers crowd into the stores and the lines lengthen, the emphasis needs to shift from education and interaction to completing each transaction as quickly as possible. People are already in a buying mode, and you don't want to discourage them with long lines. Obviously, the first step is to increase staffing to reduce customer waiting time. But there's a lot more you can do to prepare for the masses.

For example, toward the end of the day, many fudge shops set up a special display that shows only full packages of precut fudge in the most popular flavors. Shoppers in a hurry can quickly grab a pound or two and be on their way without stopping to select individual flavors from the display. Many of these shops also offer an express check-out line to serve only those shoppers who purchase prepackaged fudge. Of course, some customers will still want customized orders from the bulk fudge counter, but anything a retailer can do to expedite transaction time will encourage all shoppers to stop in and buy some fudge.

Because you have a captive audience (people still have to stand in line, although for a shorter time), your late afternoon merchandising strategy should also include up-selling. Signs that offer bonuses like "Buy one pound, get a half-pound free" should be displayed so everyone in line will have time to think about increasing the size of his or her purchase. Sales clerks and in-store signage should remind each customer of ongoing specials and ask questions like, "Why not take an extra half-pound home for the pet-sitter?" It's a lot easier to up-sell when people have already decided to buy, so don't waste this opportunity to boost your sales and profits.

To further increase retail sales, try merchandising the same product in multiple locations throughout the park. Inside the park, people tend to consume smaller amounts of fudge. But as they head for the exits, they start thinking in larger quantities to take home. Parks using small stands or carts (for quick sales) near the exits find this concept appeals to people who don't necessarily require a large selection.

Some parks also promote products by connecting them with various theme areas inside the park. For example, if your park has a German pavilion, you could set up a fudge shop inside the pavilion that offers German chocolate cake fudge and other related flavors. You could also place a fudge counter in your bakery and offer caramel apple or chocolate strawberry cheesecake fudge. Opportunities to connect products with different theme areas abound in every park. All it takes is a little creativity and imagination.

Finally, don't forget to promote the "experience" of the product. People love to see things being made. For example, half the fun in eating cotton candy is watching the wispy strands of sugar appear out of thin air and wrap themselves delicately around the paper stick. Look for ways to engage customers in the production process, either as observers or active participants. Strategically place signs throughout the park that proclaim, "Visit our fabulous cotton candy factory!" Above all, romance the product by making it come alive in the shopper's imagination. Instead of asking bakery shoppers, "Would you like to sample our chocolate cake?" entice them with, "Did you know that each slice has at least 84 Ghiradelli chocolate chips and four layers of double-Dutch chocolate cream filling?" Such an offering literally begs to be sampled.

Three Steps to Bigger Profits
The beauty of these three success factors is that they can be applied to just about any retail product in any retail environment. This is especially true in theme parks where you have a "captive" customer base and unparalleled opportunity to control the environment and how you interact with guests. Regardless of whether you're selling fudge, clothing, jewelry, or souvenirs, the principles remain the same.

Start by getting the right people in the right jobs, then set very clear expectations for job performance. Even entry-level employees want to do a good job, but they can't perform at high levels unless they know what you expect from them. The key is to focus their attention on the few activities that will yield the highest results.

Next, teach your employees how to interact with customers and engage in proactive merchandising. Explain your different merchandising strategies and when to use them. Train your employees in exactly what to say and do, measure their performance, and reward them for doing it. You'll be amazed at what these new proactive merchandisers can do!

Finally, study your products and customer flow and use different merchandising strategies at the appropriate times. Offer products at multiple locations inside the park. When possible, tie in products to park themes and sell the experience along with the product.

These are simple things, but when effectively implemented they can make a world of difference. With strategic hiring, proactive merchandising, and multiple merchandising strategies, you can significantly increase sales and profits, make the work experience more fun and meaningful for your employees, and provide a much more enjoyable and satisfying experience for your guests.

© Opportunity Maximizers