Trouble with Inventory Turnover? Use Your Hot Spots!
When you enter a retail store, do you ever consciously notice yourself being drawn to certain items? How about when you visit your favourite shop, do you take the same path through aisles?
While part of this may be a habit, a lot of it comes down to consumer psychology and what visual merchandisers call Hot Spots!
But what exactly is a retail hot spot? How can you find them in your retail store? And how do you plan around them?
What is a Retail Hot Spot?
In the world of visual merchandising, a retail “hot spot” refers to an area of high traffic.
Some merchandising experts will define hot spots only through foot traffic, but we personally believe that visual traffic is just as pertinent to your store’s success. Not every shelf is made equal!
Hot spots can include storefront window displays,cash register, loops in floor plans, and many other places. It is all dependent on the feng shui of your retail store.
Each brick and mortar establishment will have multiple hot spots. And naturally, if there are hot spots present, that means your store will also have cold spots, which is also known as dead spots. These are areas of low traffic and little inventory turnover.
A visual merchandiser’s job to build a layout for your business that not only focuses on leading traffic through hot spots but reduces dead spaces, and utilizes your square footage to the maximum.
Identifying your hots spots is an important step for every business owner. But how do you do it?
How Can You Determine Your Hot Spots?
For small and medium-sized businesses, it might be hard to get an accurate map of your retail hot spots. Large companies have algorithms and advance technology in their tool belts, but that won’t help the average business.
Heck, companies can even use cell-phone WiFi to determine foot traffic these days.
But for those of us without infinite budgets and fancy computer programs, let’s look at a strategy you can implement in a pinch.
The Game Plan
Most of your hot spot research is going to depend on visual observation.
Owners can start by noting which way customers flow within your store once they have entered. Left or right? Straight-forward?
Next, look for areas where customers slow down and begin to peruse. This might be immediately at your entrance or the back of the shop.
As well, break it down further when you identify a possible area of excitement. Is your eye-level shelf selling more than the shelf below it?
When you start to notice patterns, you can back up your findings with inventory records. Are the products in your “hot spots” selling more? If so, that is a good sign that your observations were accurate.
If not, try looking deeper into your layout and establish small changes.
Is there an item constantly out-of-stock? Does that change when moved to another area of your store?
Floorplanning and hot spot identification may seem like a lot of tedious work and experimentation. And you’re not wrong.
Unfortunately, proper merchandising is repetitive and laborious. This is probably why so many owners outsource an expert visual merchandiser to help.
However, when you finally nail down the consumer behaviour of your clients, store hot spots can eventually become your “silent salesperson”.
But your store won’t get there without consistency.
Ever notice how Best Buy looks the same on the West Coast and the East Coast? That is due to their very fine-tuned planograms (AKA floor plans) and years of research. Through their data, they have been able to find hot spots that maximize their sales – for now.
Planograms should always be flexible and adaptive. “Set-it and forget it” is a common mistake amongst small business owners. But the great thing about merchandising is it is never finished!
Eventually, store layouts become monotonous and need to be shaken up. Your loyal customers will thank you for keeping things fresh. Just don’t change too much if it’s not needed. You still want your store to represent your brand!
Owners can develop their very own planograms with the research we compiled. But don’t worry about your limitations, there are plenty of programs to help you make a planogram for your store with ease.
MockShop, SmartDraw, and Shelf Logic are the major planogram platforms, but it is entirely possible to design a suitable layout using Microsoft’s Excel.
If you don’t have the time to fool around on Excel, DotActiv offers free planogram software. Albeit, less customizable than its paid-for counterparts, but it more than does its job!
Don’t Have the Time?
We understand if you don’t have the time to figure all of this out. After all, it isn’t easy.
There are even professionals that all they work on is planograms. But if you’re looking for a jack-of-all-trades merchandiser, your search is over!
The Reset Team specializes in optimizing your store for sales, customer satisfaction, inventory turnover, and straight-forward beauty!
If you would like to learn more about what we do at The Reset Team, you can give us a shout or feel free to visit our projects to see what your business has been missing.