Are You Struggling to Merchandise
Because You Don’t Know the Pinwheel Concept?
You’ve worked hard on your business, you know your target market, you have a quality product, and you’ve trained your staff, but for some reason, you’re just not getting the response you hoped for. Customers aren’t buying.
Does this story sound familiar?
Tracy is concerned about the future of her maternity boutique.
Competition is increasing and sales have been tough over the past few months. Products she thought would be flying out the door are sitting on the shelves. The store is overstocked and in spite of sales promotions, customers aren’t coming in.
If you’re like Tracy, you’re not sure where to turn.
What do you do next?
Do you create new displays? Put everything on sale? Get someone to help you with merchandising? You know you need to do something. But what?
Before you make any decisions, you need to understand the Pinwheel Concept.
Have you ever played with a pinwheel? A pinwheel has four vanes that capture wind and spin the pinwheel. In your business, the four vanes are four areas of information. This information is what you need to know to merchandise your store effectively.
The information takes the struggle out of merchandising decisions, and when you struggle less, your business starts to gain momentum… the pinwheel starts to spin.
So, what do you need to know?
First, you need to understand the four areas of the pinwheel, and then you’ll learn WHY you need this information to merchandise your store. Finally, you’ll discover how to use this information to make merchandising decisions.
So, let’s get started.
Analyze the information in the pinwheel.
The four areas that you need to know about are:
Customers • Products • Sales • Traffic
Let’s look at these in more detail. You will probably know some of this information already, but not all of it.
What do you need to know about your customer?
You want to learn as much about your customer as possible. Does she (or he) shop alone, or bring a friend or family member? How often does she visit?
Find out what she likes best about your store, her favorite products, how she heard about your store and whether or not this is her first pregnancy.
If she could change something about your store, what would it be? What service could you add that she would love? What would she love to tell her friends about your store?
Customers will be happy to be asked about their opinion. Ask questions when helping them shop, use a survey, or try a focus group. Take a customer or two out for coffee.
How are your products performing?
Make it a habit to always know your highest and lowest selling products. Do some detective work on these items. Do your highest sellers have a good margin?
Study where these items are placed. Perhaps the lowest selling items are hard for customers to find. How often are products rotated and displays changed? How long has all your merchandise been in the store?
Make sure you know the competitors that offer similar products. What are the price points? How are they displayed?
It is important to track your sales results on a daily basis. How do your sales compare to last year? To your plan?
Know the details of your daily sales. What is the average number of items in each transaction? Also know the average dollar amount of each sale.
Analyze your traffic, count the number of visitors each day and calculate your conversion rate: number of daily sales divided by number of daily visitors. Multiply this number by 100 to get the percentage of visitors that are converted to paying customers.
Watch your customers walk through the store. What attracts their attention? What do they touch? How long do they spend in the store? Where do they spend the most time in the store?
Why do you need to know these things?
The four key ‘vanes’ of information help your business to keep moving. Without information in these areas, merchandising decisions become guesses.
If a vane of the pinwheel is missing, it doesn’t spin. It turns a little, stops, then starts again. To start spinning continuously, the pinwheel needs all four vanes. Once it starts moving smoothly, it gains momentum and keeps spinning.
When you start catching the information in the four areas of your business, it starts to move a little at a time. The information you take in begins to tell you what to do, you don’t need to guess.
What the pinwheel will tell you.
(As good as a crystal ball? Almost.)
You might already be collecting this information and not using it. It’s no good sitting in a report or a computer file.
Here’s what you can learn by analyzing the pinwheel information.
What merchandise to buy:
Analyze your customers’ needs, feedback, and top sellers to know what to buy. Focus on products that your competitors don’t carry.
What merchandise to markdown and clear out:
Merchandise sitting on shelves and not moving is costing you money. You are paying rent on the space it takes up. If the product is more than three months old, consider marking it down. If you’ve had something sitting in the store for six months to a year, move it out or deep discount it to free up the cash for new merchandise.
Older than one year? Old merchandise makes the store look stale, crowded, and boring. Some things may never sell. Once in a while it may be best to just pull items off the floor. If you have the space to store it, pull it out for a sidewalk or warehouse sale.
Where to place merchandise:
Place high margin, strong sellers in high-visibility, high-traffic areas. Use these areas for new regular priced, high-value merchandise. As a general rule, put sale items at the back of the store. Customers are willing to work harder for discounts.
Use cross merchandising and displays to encourage multiple purchases. Change displays weekly to keep merchandise fresh and capture the interest of shoppers.
When to have promotions or events:
Use your traffic analysis to plan limited time promotions or small events. Use them to boost traffic during slow times.
Use the pinwheel to find out key information about your business.
Then, make a change to your merchandising, measure the results and if it works, do more of it. This creates fewer struggles and more momentum. Get that pinwheel spinning.