chapter 6

Chapter 6: The Key to Effective Store Merchandising

Video transcript

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Video Transcript

Merchandising a retail store has a tremendous amount of science and psychology behind it. They tell us that we should merchandise for the five senses, but the truth is, we have more than five senses. We have our sense of well-being. You know that feeling that you get when something’s not right? We have our sense of balance. Have you ever walked into a store and felt dizzy because there was so much clutter everywhere? We have our sense of temperature, of being too hot or too cold. All of those subconscious senses are very important when we’re merchandising the store.

One of the things that I like to talk about is how we set the environment and how we set the mood in the store, and music has everything to do with it. Lighting has everything to do with it, and smell has everything to do with it.

I like to use the example of Hollister. A few years ago, the Hollister people decided that they wanted to study what the negative factor in the shopping experience of this nine to 18-year-old was. If you think about it, nine to 18, what could possibly be the negative factor? They did this study, they followed him from the parking lot to the shopping mall to inside the store, and they realized that the negative factor was the parent. How do we get rid of the parent?

Obviously, the kid is nine years old. He can’t drive himself to the mall, so he might be able to get dropped off at the mall, but most likely he’s with a parent, so what they did with the environment is, they made the store so dark, like a cave, and made the music so loud, unbearable, that, and this is documented, anybody over the age of 20 cannot spend more than two minutes in the store, so as a parent, what do you do? You walk into the store, you tell your kid, “Oh, we’re here to get this whatever,” and then like, “Oh my God, I can’t take the music. It’s too dark in here. I’ll wait for you outside.”

Every single Hollister is positioned outside of what we call short-term parking. The short-term parking could be a bench, a very simple bench in a very low-brow mall, or it could be a recliner with a guy playing the piano in the center of the mall. The idea is, there is a place for the parent to come and sit.

Biologically, parents have 10 minutes, so in that 10 minutes, the child can usually run around the store and increase the sales or units per transaction, UPTs, by one item, so that means that they’ve doubled their sales only on making the store incredibly dark and the music really loud.

That was very successful for them, so then they’re like, “Hmm. How do we increase this 10-minute biological clock?”

We can make sure that every single new Hollister is two doors down from a Starbucks, because now the parent comes out of the store. They look around. There’s a Starbucks. “Let’s walk over to the Starbucks.”

Now, and this is timed again, all of this is a very scientific process. They realized that it takes seven minutes from the front of the store to get your Starbucks to come back and sit down, so now they’ve added seven minutes to the 10-minute biological clock, and they have increased sales by one more item.

They’ve increased the sales two items from the original one, just by placement, sound, and sight. This is how important it is when you are merchandising your stores.

A few rules to follow is it’s important when a person walks into the store that they don’t feel like they’re trapped in, that there is a focus wall, so usually the back wall will be the focus wall. This is another opportunity for you to brand your store.

Another thing, and I don’t know what book this is written in, but some book it said that it’s really important to have the register right in the middle of the store or right in the front door, and they said that it’s because of loss prevention. “Oh, if it’s in the center of the store, I can watch the whole store and see what’s going on,” but if any of you have ever worked behind a register when you’re checking somebody out, it’s impossible to see what else is going on in the store because you’re focused on that moment.

Let’s take a virtual tour together. Ready? We’re going to go to Target.

You know when you walk into Target, there’s a big row of registers? They’re red, they’re white, they’re colorful. If you listen really carefully, you could even hear the casino ka-chink sounds. People are lined up, so already subconsciously you’re telling yourself, “Wow, everybody’s lined up, everybody’s shopping, I better get to business.”

Target reinforces it one more way. The minute you walk in, over to the right there’s always those dollar bins. Even though you’ve told yourself all the way from the parking lot, “We’re not going to go near the dollar bins,” there’s like a magnet on your shopping cart that takes you right to it, so now you start picking things up. Oh my God, it’s so cute. It’s only a dollar. It’s so cute, it’s only a dollar. It’s okay, it’s only a dollar, so subconsciously, you have just programmed yourself into thinking that everything in the store is cheap and cute and you’d better get shopping.

Now let’s take a tour somewhere else. Let’s go to Gucci, let’s go to Louis Vuitton. Where’s the register? It’s hidden in the back. Sometimes it’s [even 00:04:48] completely off the floor, and the reason why, when you look at that register, you’re not thinking cheap and cute, you’re thinking, I’m dropping a lot of money, so think about the last time you went into a new store that you’re not familiar with, and you said to yourself, “Oh my God, this store is so expensive,” and you didn’t look at a single price point. That’s the retail environment.

Psychology placements, like the physics of the store, are also important into upselling the customer. Even the placement of manikins, who we call the silent salesperson, is very important.

When merchandising your store, always remember the psychology behind it.

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