December 12, 2016
By Susan Tudor
Every time we go to the grocery store or a restaurant or shop online, we are making financial and strategic decisions regarding our personal lives: Is this item really what I was looking for? Is this the right time to make this purchase or should I wait? Can I afford this? Is it the right price, or can I find this same item somewhere else for less?
These buying decisions in our personal lives are similar to the financial and strategic decisions we make as retail merchants in our institutions.
I have heard it said that the key to retail success comes down to three Rs: carrying the right merchandise at the right time and at the right price. This statement is simple but challenging. It is intuitive yet calculated. And it can serve as a great reminder of how simple strategy can help make or break our stores’ bottom lines.
These three Rs of retailing are an easy buying motto to follow:
1. Right Merchandise: Do we have the products that our customers are looking for? To choose the right merchandise, we need to know who the visitors are that are shopping in our museum stores. Do we know whether they’re tourists or whether they’re local customers—and to what degree? Do we know how old they are? Do we know what kind of work they do? Are they members of the museum?
Do we have unique merchandise that relates to our museum and its collections? If we have special exhibitions, do we develop merchandise strategies to define what we are targeting with these exhibits?
Another important aspect of having the right merchandise is newness, which shouldn’t be overestimated. We probably would be surprised at the number of people who shop us more than once a month. If we put the same product in the same place 365 days a year, it is a guarantee that repeat visitors will walk by it after the first time they shop in our stores. Even if merchandise is not new, make it look new.
2. Right Time: Have we correctly timed deliveries to match exhibition openings, special events or holidays? Should we bring in seasonal and special exhibition-related merchandise early for advance selling? Do we stay vigilant on when trends may be ending? Once we have the merchandise items, are we in stock on the things that are selling best?
I am sure we have all heard “Well, you know, we’re not in stock on that because it was a best seller.” That is a sort of irony that escapes me even though I have been guilty of it happening in my store. We should always keep ahead of demand by not running out of quick sellers.
3. Right Price: What do our competitors have this merchandise priced at? Do we know what price our customer can buy these items at online? Chances are great that our customers know that answer. Price merchandise correctly from the outset to ensure needed margins. Don’t forget to factor in the discount that members and volunteers receive when establishing retail prices.
And, of course, there is always more wiggle room in markups for merchandise we have developed. Remember that, often, the right selling price is achieved by actually examining the item to determine what it will sell for, and when markdowns are needed, the first markdown should be steep as it is the cheapest markdown. Sometimes having the right price means having a good mix of every price point, which ensures something is available for all.
Those three Rs are essential, but I think there are actually four Rs of retail. Here’s my fourth:
4. Right Selling Staff: Customer service is a very important element in any type of retail setting. Are the associates in our stores friendly? Are they knowledgeable and well presented? Do they suggest other products? And if we have volunteers, are they representing our stores correctly?
We need to provide ongoing training for our staff to maximize customer relations, as well as store sales. The visitors will walk out fast and find another place to buy a product if they don’t feel like we are appreciating the fact that they’re there and that we want to do business with them.
There are many things we are called to do in our nonprofit worlds. Our time and energy can be segmented by tasks that pull us from our retailing responsibilities. But these four Rs of retailing—carry the right merchandise at the right time with the right price and the right selling staff—can help us stay focused on what is important.
Let these Rs guide us when making retail decisions that require us to be financially accountable and strategically manage our stores. Because as we all know, when our museum stores succeed, our museums succeed as well.
Susan Tudor is the Manager of Visitor Services and Store Buyer at the Cummer Museum of Art and Gardens in Jacksonville, Florida. She also currently serves as Director at Large on the MSA Board of Directors.