The problem
A luxury store chain had reached a growth plateau and needed some fresh ideas to increase sales, profitability and traffic.
A luxury store chain had reached a growth plateau and needed some fresh ideas to increase sales, profitability and traffic.
The solution
We identified that the sales team at each store had developed “core knowledge”, for specific product lines only. This caused retail consumers to be passed from sales clerk to sales clerk, depending on their need. Additionally, the sales team received only a small commission. Finally, store traffic was only marginally affected by communication programs, but, rather, by word of mouth.
We identified that the sales team at each store had developed “core knowledge”, for specific product lines only. This caused retail consumers to be passed from sales clerk to sales clerk, depending on their need. Additionally, the sales team received only a small commission. Finally, store traffic was only marginally affected by communication programs, but, rather, by word of mouth.
We worked with the store managers and developed training programs to expand the store representatives’ product knowledge and make them more comfortable with other product categories. We then developed a sales plan for each store representative that included “pay for play” objectives: categories that were historically weak for a certain representative were subject to commission ceilings, which were progressively higher, depending on whether the representative was approaching, had reached or surpassed expected sales for his/her category. Each month, we added ‘stretch’ goals, the winner of which would be entitled to a cash or other (e.g. gift certificate) prize.
We polled retail consumers to understand the most efficient affinities, and developed relationships with complementary high-end retailers (to include restaurants, service providers, etc.) to develop programs that would mutually enhance marketing efforts.
Finally, we used POS information to understand affinity purchases and predict what customers who purchased one product might also like or need to buy, and – based on POS history – we invited high-value retail customers to special sales or collection previews, based on affinity purchases.
The results: The two key retail locations that were tested for this program reached and passed break-even point within 12 months of deployment (one for the first time in a decade!); one specific location expanded its footprint based on the sales success.
In a Nutshell:
- How do you make a chain of stores grow past their plateu while increasing profitability?
- Engage the sales staff in the sale of all categories and provide excellence incentives, create key partnerships with complementary categories to increase awareness and traffic and study purchasing patterns to maximize purchases for walk-in consumers.
- Enjoy sales increases past break-even point and finance store expansions.
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