Hardware Retailing

AUG 2017

Hardware Retailing magazine is the pre-eminent how-to management magazine for small business owners and managers in the home improvement retailing industry.

Issue link: http://hardwareretailing.epubxp.com/i/852196

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Page 86 of 114

HARDWARE RETAILING | August 2017 80 I had a boss who used to say, "When it rains, merchants open the doors and say, 'I bet I sell some umbrellas today.' Retailers open the doors and say, 'It's raining. Move the umbrellas to the front of the store so people buy them.'" Are you a merchant or a retailer? Your merchandise and inventory are your biggest investment every year. According to the North American Retail Hardware Association's (NRHA) Cost of Doing Business Study, 59.2 percent of sales at a high-performing hardware store go to pay for the goods sold. With that much of your top line spent on keeping shelves and pegs full, you should be paying attention to that merchandise. Sure, you spend time every week looking at new products and reordering, but how much time do you really spend evaluating merchandise and all that goes into it? While I'm not suggesting the percentage of your time match the percentage of your cost of goods, I would argue you need to spend quality time regularly evaluating your merchandise. Here are five ways you can better spend your time as it relates to your merchandise. 1. Endcap Shuffle Do you have a strategy for your endcaps, or do you just find something to display and then a month later realize it's probably time to change it? When I talk with retailers, I consistently give two pieces of endcap advice. First, track sales by endcap location. You should be able to easily and quickly identify which endcaps perform best. Set up location codes for them and track the sales of the items on the endcaps each month. Once you know which endcaps customers are more likely to see, you can be more strategic about what you put there. Second, have a plan for your endcaps. Get an accordion folder, label each section by month, and inside each month, have a file folder with the location code for that endcap and the week of the month it's scheduled to be changed. So, if your store has 14 endcaps, you will have an accordion folder with 12 sections and 14 file folders in each section. Then, as you see products, have ideas, or go to buying shows, you can plan all your endcaps. Ideally, you will have your endcaps planned at least 90 days out. 2. Don't Reorder for Reordering's Sake Just because you sold something does not necessarily mean you need to reorder it. If you have a point-of-sale, use its monthly sales data as a starting point for your reorder, but don't simply restock the exact items you sold the month prior. Merchandising Expert Perspective: Retail Is... By Dustin Kaehr, dk@dustinkaehr.com

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