Putting the Retail Industry Report to Work for Your Store

                                                                                                                                                                                    By Julie Steiner 

Have you ever heard any of the following questions at your institution?

  1. Why doesn’t the store sell more, given our visitation?
  2. Inventory? Why does the store have so much money tied up in inventory?
  3. Personnel is one of our biggest expenses—can’t you do the same work with fewer people?
  4. Can’t you increase prices and get a higher profit margin?
  5. The store takes up a lot of space in our institution—what if we use part of it for [fill in the blank: a café, ticket sales, event space, etc.]?
  6. Everyone’s shopping online these days—can’t we just move to selling on our website?

How do you answer such questions when they come your way? Some might feel a moment of defensiveness, or put on the spot. The Museum Store Association 2018 Retail Industry Report is created to give non-profit retail professionals up-to-date benchmarking data to use: first for assessment of your retail operation, and second to advocate for your store’s business needs. When you understand not only your own business data but also the metrics describing the industry, you can contextualize your business and talk about it with confidence.

Before looking specifically at how to put the MSA Retail Industry Report to work in your assessment and departmental advocating, consider two essential factors:

  1. Context is key. All of the answers to the list of questions above are relative. The key question to continually ask in any assessment is “compared to what?” Profits aren’t objectively high or low, they are high or low when compared to some other profits. Maybe it’s profits from a previous fiscal year, maybe profits of a similar institution in another city, maybe profits of a nearby corporate/for-profit retailer. Likewise, a store isn’t inherently big or small, a store is bigger or smaller than some other store or perhaps is being compared to some other department. Inventory, personnel, sales, e-commerce: no single measurement is objective, they only make sense in comparison, and the context for comparison needs definition and clarification. The Retail Industry Report is designed to give you that definition and point of comparison to answer detailed questions about your business.
  2. Data is neutral. It’s human tendency to shrink from statistical feedback, as if numbers reveal something we won’t want to see. It’s like refusing to go for a medical checkup to avoid hearing something we’d maybe rather not hear. But the numbers don’t care about us: they are impartial, and non-judgmental. We bring the judgment, the data itself is neutral. And when we look at those numbers as neutral feedback, and know how to assess context, they can only help. Ask yourself “what’s the worst that can happen?” Maybe the worst is that we find our business strategy has a weak spot—but just as we want to know our daily sales totals on the days when business is slow, as well as when it’s busy, we can’t fix what we haven’t measured. At the end of the day, it’s not knowing that presents the most risk. So let’s take a look at some of those hypothetical questions listed above, and how the MSA Retail Industry Report can help answer them. First of all, the report covers a variety of institutional types and sizes of operations. For the purposes of this exercise, I have pulled the stats specifically for art museums to use as examples. Data for stores from history, natural science, and other types of museums and institutions are included in the report too, and you can do this same comparison for those stores.chart-1-store-sizeI prefer to study and present statistics in graphic form, so I’ve made some example charts based on the summary statistics in the Retail Industry Report. The graph represents the median figures for all art museums responding to the MSA survey. Other art museums can plot their size against this graph. I’ll use extreme examples for purposes of illustration: perhaps a store has sales of $500,000, and takes up 4,000 square feet in a museum’s entry lobby. That museum board might be reasonable in saying “some of this space could be better used, apportioned to a different use.”chart-2On the chart above, I’ve added visitation: the axis on the left shows attendance to the museum, the axis on the right is square footage of stores. Here, a store making $450,000 a year in a 500 square foot space, with 300,000 visitors coming through each year, might look at this and say “we could increase our retail earnings by expanding the physical space given over to our store.” Of course, many other factors play into each conversation, but how do you know if your store is “big” or “small” unless you know “compared to what?” Plotting your own store on a graph allows you to compare to the “average art museum store, of a certain visitation number and gross retail sales volume.”

As for the rest of the questions listed above? The stats in the Retail Industry Report that can help you answer those questions fully, and compare to your segment of the market, include but are not limited to:

  1. Sales per visitor, average transaction values, and proportion of attendance that comes from school groups, tour groups, and special events (particularly useful when those groups exhibit different buying behaviors from the general admission visitors).
  2. Inventory values, cost of goods sold, annual inventory turn, number of vendors and number of SKUs.
  3. Tallies of paid staff and volunteer positions, with wages, salaries and benefits, including sales associate’s positions.
  4. Profit margins, cost of goods sold, margin per transaction, margin per visitor, margin per square foot.
  5. Store sizes, visitors per square foot, sales per square foot, and gross margin per square foot.
  6. Percentage of retail sales from e-commerce, median purchase amounts for e-commerce, number of items offered online, and top-performing items sold online.

I’ve highlighted only a few among many of the conversations museum retail professionals have about their operations every single day, that can be clarified and contextualized with data from the MSA Retail Industry Report. The amount of data compiled in the survey process is enormous, and the ways of looking at it are as varied as the stores represented. Aggregating and sharing our community data is one of the top services an industry association such as MSA can provide. Whatever challenges and questions you face in your organization, chances are that understanding those within the context of the industry will highlight strengths and opportunities that can help your business grow stronger. It will help you advocate to the decision-makers for the improvements you need to strengthen your business!

The 2018 MSA Retail Industry Report can be ordered online here. The 2018 MSA Retail Industry Report is sponsored by Andoniadis Retail Services.andoniadis

Julie Steiner is the Director of Retail Operations for the Barnes Foundation in Philadelphia, PA and the 2017-18 President of the Museum Store Association Board of Directors.jsteiner-2018-msa-sm


PRO-File: Institutional Member

September 11, 2017

Name: Patricia Sampson: A Volunteer with Passion  — who believes in Fate

Job Title: Manager of Retail Shop and Visual Merchandising

Institution: High Museum of Art

Location: Atlanta, GA

Interviewed by: Laura Murphy, Preservation Society of Newport County

What path brought you to your job?

I grew up in Harlem, NY. There I would escape to the Museum of the City of New York located on 5th Avenue.   Admission was free then, and I often found myself walking around there.  I was in awe of what I could learn about my city!  I majored in Fashion Merchandising at Marist College in Poughkeepsie, NY. My degree brought me to Atlanta, GA  where  I found a job in the for-profit world in Birmingham with an independent retailer, Parisian.  At Parisian I began my buying career by purchasing swimwear, intimate apparel, ladies clothing lines, and menswear.  When Parisian was purchased by Sachs, I found myself out of a job.  My goal was to leave Birmingham and head back to Atlanta where I had family.  I applied at the High Museum, but did not hear back and pretty much forgot about it.  In the meantime, Sachs offered me a position, but I would have to remain in Birmingham.  That day I made the decision to decline the position.  Later that same day the High called and offered me the job!  This was the beginning of my belief in FATE…

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From Icon to Impact: Merchandise Sends a Message

June 12, 2017

By Maria Kwong

Being recognized by MSA for product development this year is indeed a great honor and I wanted to share our process with other members hoping to achieve future recognition. MSA not only provided me with access to tools and vendors that fit my very modest product development budget, it provided me with an environment where I could learn from my peers.

Being the director of a museum store with our particular mission statement–to promote understanding and appreciation of America’s ethnic and cultural diversity by sharing the Japanese American experience—has always made product development…well, challenging. Contrary to what many vendors and buyers imagine, Japanese products are not what makes up our store. We are a museum that explores the Japanese American culture, history and community; past, present and future. In fact, during the early days of the museum store, the rule was not to buy any products that were perceived as “too Japanese”. This rule served two purposes: first, it put the emphasis on the hybrid culture of Japanese Americans; and secondly, since the museum was conceived as a community-supported organization in a historically ethnic area of Los Angeles, the museum did not want to appear to be an economic threat or competitor to the merchants and businesses in Little Tokyo.

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Art Supplies? Yes!

April 3, 2017

By Nancy Sanders

Selling art supplies might be a given for fine art museum shops, but all sorts of museum shops should consider adding this product category to their sales plan assortments. People of all ages can use some extra creativity in their lives, and activities that encourage drawing, painting and photography can fill an important need.

When I first started buying for the Gallery Shops’ children’s department in 2002, our store didn’t have a huge number of SKUs or art supply vendors. Our products could be found in mainstream stores, and we struggled to compete on retail pricing. In addition, I was pretty particular about what quality I expected. Children need good-quality supplies; otherwise, their frustration when markers lose ink too quickly or when pencil points break at the slightest pressure might be discouraging. And what about all of the young adults and adults who came into our galleries and left feeling inspired to create art—what did we offer them in the way of art supplies beyond student-grade media?

These were areas I addressed when I evaluated my options for business growth, and over the years, the category of art supplies has increased from 20 percent to 50 percent of our department’s overall sales. Here are some of my recommendations for how you can achieve similar growth.

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Woman successful hiking climbing silhouette in mountains, motivation and inspiration in beautiful sunset and ocean. Female hiker with arms up outstretched on mountain top looking at beautiful night sunset inspirational landscape.

4 Ways to Define Personal Success

March 28, 2016

Are you successful? Hopefully, you’re running a successful operation and you come to work every day with a smile on your face. But defining true personal success is often difficult.

You could be running a massively successful operation, while your personal life is crumbling all around you. Or, just the opposite may be true. Your personal life may be nothing but endless joy, and at the same time, you can barely keep the front door of your store open.

Life, both professional and personal, seems to be an endless balancing act. You often feel like a juggler, trying to keep a dozen balls in the air. It might work for a while, but it doesn’t work all the time. Read more

several donuts on a white background

Social Media Explained

February 8, 2016

A while back, I came across an image that went viral that explained social media using donuts. Naturally, the use of donuts caught my attention since donuts are at the top of my nutritional tree… and social media seemed kind of important, too.

As it turns out, the social media explanation, ala donuts, has been knocking around the Internet since 2013. It’s a simple, yet effective way to visualize the social media food chain. It’s easy to see why it caught the imagination of anyone who is trying to figure out a way to take advantage of all that social media has to offer – especially for businesses. I guess that’s why I keep a copy of these nine definitions pinned to the bulletin board near my desk.

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10 Ideas You Should Steal

January 25, 2016

In 1970, the King of the counterculture, Abbie Hoffman, wrote, Steal This Book. It was a guide to survival in time of change. It’s now 2016 and times are a changing. It’s time to steal some ideas.

Every industry has unique ways of doing business. Many of these ideas translate well to the retail business. So here are a few ideas that you can steal to help your store survive in the ever-changing world of noprofit retail. Read more


5 (or more) Reasons to Go Grey

December 14, 2015

Depending on what market you’re in, you may be finding that good employees are in short supply. As the economy heats up, the demand for retail-level employees is starting to create problems throughout all industries. To maintain your roster of employees, especially throughout the holiday season, you may have to get creative as you search for the newest member of your team.

Certainly, you can try all the usual avenues for finding new hires. Craigslist, the local want ads, the job board at your local college and referrals. But don’t forget that your best employee may be coming from a different direction. Read more


Where’s My Email?

December 7, 2015

As an avid museum- goer, I have to be on dozens of museum mailing lists. So where’s my e-mail?

With Thanksgiving a fading memory, we are now squarely into the holiday shopping season. And, it’s no secret that online sales are challenging brick and mortar stores for retail supremacy. A survey conducted by the National Retail Federation shows that more than 151 million people shopped either in a store or online. Online shopping even has gained an edge over in-store shopping, with the survey showing 103 million people shopped online, while 102 million people shopped in stores. Obviously, a big number of people are shopping in both places. Read more