Cherry Healey recently presented 'Secrets of the Sales' on the BBC, taking a behind-the-scenes look at how major high street retailers like John Lewis, Oasis, Jones Bootmakers, New Look, Top Shop and Multiyork encourage consumers to spend more. The program is aimed at helping consumers make more informed choices when buying in the sales. I thought that it might also benefit independent retailers who can learn some tips from the bigger multiples.
Here are 18 key insights independent retailers can take away from watching the documentary:
1. Sales aren't all about clearance items
Multiple retailers like John lewis buy in stock known as Special Buys to sell at discounted prices during the sales. This buying accounts for a significant proportion of what is sold to consumers during the sales.
2. Visual display merchandising is key
The sale signs for John Lewis are made in house and are all perfectly assembled. As one John lewis merchandiser points out " We've got a lot of expensive product so if you want to sell it you have to display it in a way that makes people want to purchase them." More on visual layout of products later.
3. Mark downs must be carefully considered
Jones Bootmakers entire senior management team spend 2 whole days locked in a room deciding what goes on sale and at what discount. 40% of annual sales for their business are taken during the winter and summer sales so their decisions are vital to the profits and turnover of the business. Too much discount and they lose profits, too little and they get stuck with dead stock.
4. There are rules to discount signs in your windows
Legally you can put up a 50% off sale sign in your window as long as at least 10% of your stock has a 50% discount and it has been on sale at the list price for a meaningful length of time. Multiyork's MD suggests this should be around 28 days. Ideally you should state when the item was on sale at the list price.
5. Phasing down drives sales
If you stagger your sales discounts down in stages it helps to drive sales. Consumers then have to weigh up the choice between buying it at the current discount and having the item they want or waiting for the price to drop further and risk the product being sold out. Multiples use this as a call to action for shoppers to buy then and there.
6. Other clearance channels
Jones Bootmaker has a warehouse clearance sale that it markets in a very small way in it's local area. What they don't sell there they clear to traders abroad and remove the branding from the shoes so that it doesn't damage sales in the UK. It's worth having other channels to clear your dead stock.
7. Understanding Oniomaniacs
Oniomania is the technical term for shopoholism which affects 1 in 10 people. Bargain hunting affects the pulse and stress levels of shoppers. Dr Jack Kreindler tracked Kealey shopping and found her heart rate increased from 60 to 100 beats per minute when she found an item she liked and her stress / excitement levels went from 20-80%. According to retail psychologist, Dr David Lewis, the body also releases reward chemicals when shopping. Essentially shopping can be addictive and sales bargains can feed this.
8. Presenting sale items like a jumble sale can drive engagement
Shoppers can add value to a sale item in their mind because of the time they have spent searching through other items for bargains they have found. The longer they spend searching through sale items in your shop the more they engage with your products and the more likely they are to value them.
9. Discounting is expected in some retail sectors
£12 billion is spent each year in the UK on furniture, something which is not regarded as an essential purchase by most consumers. The furniture industry permanently run sales and offer free credit to enhance sales. 75% of furniture sold by MultiYork is sold at discounts of between 30 and 50%. Consumers expect this of the furniture sector so it's a must have marketing ploy for furniture retailers.
10. Personal Shoppers boost sales
Shops like Top Shop are now offering personal shopping experiences where clients can get assistance with choosing what to wear and what looks good on them from the latest season. Sales staff that meet consumers needs well will always help any retailer's profits.
11. Retail interiors add to the experience
Oasis recently spent £7 million refitting their stores focussing on a sensory experience for their customers. In their flag ship the downstairs area is fresh and bright and upstairs was moodier and more atmospheric. The railings were positioned to be more inviting for customers. These experiences affect the mood and encourage shoppers to spend.
12. The customer is the fairest of them all
The mirrors in one of the fashion retailers were large and leant against the wall. This looked aesthetically good and also had the effect of slimming the person standing in front of the mirror. The lighting and the mirror were set up to make the customer appear to glow in their chosen garments. Creating a satisfying feeling for customers is important.
13. Smells are not to be sniffed at
Oasis even had a machine that scented their retail space. Smell is a trigger for contextual memory which can help put clients in a good mood and encourage them to spend more. Using a machine called ScentAir they found that smells like vanilla would increase customers' perceptions of trust worthiness of sales staff, make them 84% more likely to purchase and even meant that they valued products more highly.
14. Getting customers to join your club
High Street retailers are using social media to help consumers feel part of a community and to create loyal fan bases. New Look have 2 million Facebook fans and a customer email list that they send flash sale deals to which drive turnover.
15. Fans feel special
Whilst visiting New Look, the store tweeted their followers to come in for a surprise and amazingly two turned up within the hour. These customers said they loved being the first to know about a deal that they could share with their friends. Looking after fans who refer you to others like these is key to any successful business.
16. Product layout boosts sales
Using a pair of eye tracking glasses (tobii glasses) on them Dr Tim Holmes, a neuroscientist, showed how our eyes are drawn to blocks of texture and colour when shopping. If the shop is laid out well, retailers can use this trick to draw customers deeper into the store. He showed how shoes grouped in colours helped to draw the eye around the store.
17. The power of suggestion
Some shops even have suggestive slogans on the walls which we register in our brains even if we don't seem to notice them. The entrance to the shoe department at New Look had a sign which said "Shoe Heaven" and a slogan on the wall that said "Repeat after me: 'I deserve new shoes'." Retailers can have a lot of fun with this kind of marketing.
18. Red sale signs
Red is a colour that really stands out against others so is perfect for Sale signs so that they draw the eye. Too many red signs and the effect is ruined. Too garish and not type set well enough and they cheapen the offering in a tacky way.
Sales are exciting. Consumers who love to shop do love sales. It's thrilling to find bargains and even more exhilarating if there is a limited time to do this in. Retailers that do well take advantage of this knowledge and create experiences that give customers what they want: some fun and excitement at a price they feel is a bargain.
Click here to watch The Secrets of the Sales on the iPlayer (available until Monday 13th January)
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