In recent weeks I seem to be having more and more conversations with sports retailers about ‘checkout candy’.
Put simply, the phrase refers to temptation at the checkout. A good example is sweets around the till. In the grocery industry there has been considerable pressure put on retailers to withdraw from this strategy as it’s too successful - apparently consumers are simply unable to walk by a row of sweets without purchasing them, thus affecting their health.
In simple terms, checkout candy is recognising the ability to upsell, which according to Dr Jon M Hawes, director of the University of Akron’s Fisher Institute for Professional Selling: “Is the difference between just getting by and having a very profitable year. Revenues from upselling are usually over and above a store’s break-even point, so the extra sales quickly turn into profits.”
Retailers commonly enjoy sales increases of 20 per cent or more when they start upselling. The surest upsell is to offer additional related items for something a customer is already purchasing.
If the customer is buying athletic shoes, you might like to suggest insoles. Why not place an insole in one shoe and not in the other, so that when they try them on they can feel the difference? This is a strategy Foot Locker employs incredibly successfully. You might also suggest things like shoe care products - a classic shoe shop upsell.
In a wholesale setting, try and find out everything you can about the customer’s business and offer other related products. Appeal to most retailers’ desire to simplify and give them the option to get everything they need from one place - your place.
The accessories element of any retail business should be one of its most profitable areas. Online retailers thrive on the ‘You may also like’ or ‘Customers viewing this also bought’ prompts on their sites. If you are a bricks and mortar retailer, use the same strategies.
Group relevant product areas together - tennis racquets next to balls, bags, headbands and vibration dampeners, rather than simply a wall of racquets, for example. Running shoes should be placed next to socks and insoles, hockey sticks next to grips and balls - the list goes on, but all can lead to incremental sales.
Look for future events or tie-ins with local activities. Many rugby retailers are driving steady business already from Rugby World Cup 2015 pin badges and key rings and we are still six months away from the event.
As well as placing the products in relevant areas alongside upsell lines, look at using the till space as effectively as possible. In front of the customer works. Tucked away behind the till doesn’t. But it’s not just about having additional products to upsell alongside the purchase. Don’t forget the initial purchase itself is an opportunity to upsell.
Not all products are equal and especially in the sale of higher-end products, it’s good to guide the customer through different features, highlighting the benefits of more expensive items.
In a wholesale setting, you might consider different size orders that would give the customer the same product at a better price. Bulk items generally come with a benefit, so it’s a good idea to highlight the long-term price benefit in making the bigger buy now, instead of waiting to come back for more.
Upselling is vital to the long-term profitability of your sports retail business and is the reason why the specialist sports retailer can continue to thrive in the face of stiff multiple retail competition. According to the experts, here’s why:
• Customers may believe they are shopping for price, but they want value. They will return only if what they buy meets their needs.
• Customers are suspicious of a pushy salesperson, but at the same time they need shopping guidance from a member of staff who’s focused on their needs.
• With more stores advertising markdowns and discounts, you have to keep your margins up by upselling better merchandise and cross-selling with desirable add-ons.
So next time you’re looking through a trade magazine or visiting a show, spend some time looking at the accessories and upsell lines. Pick them wisely, complement your product offer by category and you might just find that additional sales lift you’ve been looking for.