Today's post is by Andrew Andoniadis, principal, Andoniadis Retail Services.
"UBIT is your friend." I have used this mantra for years to help ease unnecessary concerns about the sometimes unclear and tangled regulations associated with Unrelated Business Income Tax. This article is not about UBIT itself but about how to leverage adherence to the rules and regulations into a pro-active selling tactic that will enhance revenue.
Most everyone agrees the use of provenance cards (aka, shelf-talkers) is a proven way to connect the products in the store to the mission and exhibits in your museum, thus taking a big step toward meeting UBIT requirements. Far beyond this technical step, provenance cards can also drive sales by educating the visitor about product mission-related characteristics, providing a background story about the product or the artist and pro-actively explaining higher-priced and unusual products, and items such as hand-crafted products, where the value may not be readily apparent.
Information that can be incorporated in the cards includes:
- Connection to the mission and/or exhibits of the museum
- Artist background
- Educational material that puts the product into perspective
- Community connection such as history or being made locally
- Description of materials especially if rare or unusual
- Description of how a handmade product is crafted
- Stories about the product
Regardless of the purpose, how you execute the production and use of the card is important. Provenance cards should all be printed on the same colored card stock using the same fonts and museum or retail graphics. Generally, the only change from card to card should be the text and the size of the card required to accommodate the text and fit the size of the product. For example, most cards may be put in holders or on small easels and placed on the shelf next to a product, but a card for a piece of furniture may be larger and hung using ribbon threaded through a hole in the card.
How do you use provenance cards in your store to connect your mission with your products?
Photo courtesy of the Historic Arkansas Museum.
Today's post is by Miriam Works, principal, Works Consulting.
If you’re over age 40 and manage staff under age 30, you’ve likely felt befuddled, energized, alienated and amazed by this group. Adaptable, techno savvy and anti-authoritarian, they are often categorized and sometimes woefully underutilized.
This generation can be a boon or a nightmare, depending on your ability to inspire them. Use these tips to keep them motivated:
- Millennials were raised with technology and instant gratification—exposed to almost eight hours of media each day—including TV, videos, computers, Internet and video games. The upside is that they process information from multiple sources quickly. The downside? Patience is not a common characteristic. Don't be surprised if they chafe at bureaucratic rules. Explain the reasoning behind your institution’s rules. To get Millennials engaged you must fully understand the goal behind each rule and express support for its reasoning.
- In the era of mass marketing, individuality is a top priority for this generation. They’re sophisticated about the importance of image, wanting to stand out with their own personal “brand.” Explain the whys and wherefores of dress codes. Whenever possible, allow room for personal expression while being clear about what’s non-negotiable.
- Raised with reality TV and shock radio, in a culture that values self-expression over self-control, they speak their minds freely—which can get them into trouble with customers. Provide forthright coaching about how to strike a balance between good manners and informality to make boomer and older customers happy.
- Accustomed to collaborative environments where feedback was constant, Millennials crave evaluation and want to provide it themselves. Establish regular two-way feedback sessions. Make note of achievements while being clear in expectations. Another result of their collaborative backgrounds: They like working in teams. Consider whether some responsibilities can be shared. As long as work gets done and accountability is clear, the result may be a more motivated staff.
- Exposed to lurid stories of corporate greed and government excess, money isn’t everything to this generation. They pay attention to work-life balance and whether a job looks good on their résumé. Find ways to reward staff with perks other than compensation, such as special shopping days, recognition for attendance, discounts on select merchandise, etc.
- Millennials seek causes to care about. Raised with rampant cynicism about government and big business, once they find something to believe in, they exhibit a strong sense of commitment. Find out how their personal values align with your institution and emphasize this alignment in your feedback sessions.
Like any generation, what makes Gen Y a challenge is also what makes it uniquely skilled. Creating a good working relationship with Millennials is the same as with anyone else: Treat them with respect. Learn about them and give them plenty of caring, honest feedback. Most importantly, check assumptions at the door and evaluate each person as an individual. Understanding Millennials’ unique generational background and challenges is the first step in keeping them fresh and motivated about providing service to your institution.
How do you motivate the Millennials on your staff?
Today's post is by Andrew Andoniadis, principal, Andoniadis Retail Services.
There are two major aspects of a buying plan. The first is determining how much product needs to be bought to keep the overall inventory at proper levels. This is a merchandise buying plan, most commonly called open-to-buy (OTB). The calculation of OTB is critical because it helps to control the biggest museum store expense. OTB should be calculated at least quarterly regardless of the fiscal or physical size of the store.
OTB is important for at least two reasons. First, it’s a critical step in the business-like approach to the financial stewardship of the funds and products entrusted to store management by the museum. It’s also important to have an up-to-date OTB so the store can continue to function seamlessly should the proverbial bus hit the manager/buyer.
Calculating OTB by department/product category assists in the execution of the second major aspect of the buying plan, which is to determine where available inventory dollars should be spent. By preparing OTB by department, or even smaller units, and amalgamating the calculations into an overall OTB, the result provides both broad and detailed inventory buying guidance.
Preparing the buying plan
- Determine current stock levels by department. This usually comes from a physical inventory count or through inventory levels reported by your point-of-sales system.
- Project sales—let’s say 12 to 18 months into the future. The major factors affecting these projections include historical sales, exhibit schedules, visitation projections, broad economic factors, micro factors (such as construction affecting access to the store), seasonality and other components unique to your museum. This projection step should also include estimates of desired end-of-period inventory levels.
- After stock-on-hand has been determined and projections have been calculated, the next step is to periodically (at least quarterly) compare actual sales and inventory levels to the projections. This is when the value of OTB becomes apparent.
If the comparisons show either that sales are more than expected or the inventory is lower than desired, the OTB will provide financial parameters within which to buy more product to get back on plan. This is a good place to make it clear that OTB provides broad financial guidance but does not specify which individual products should be bought.
OTB is most valuable, however, when sales are less than expected or inventories are higher than desired. Under these circumstances, OTB will guide you to slow down buying to make sure inventories are kept at the proper level. This is critical because the most common factor among museum stores that are not financially successful is bloated inventory. By calculating OTB by department, it will become clear which departments need adjusting. One last note, once OTB has been established it can always be changed to reflect updated visitation, exhibit schedule and other circumstances.
To many experienced museum store managers or managers of small stores, it may seem unnecessary to calculate OTB because sales and inventory levels and variations from plans are obvious. I suggest, however, the process should be codified with the purpose of running the store like a business, protecting the institution from unforeseen circumstances—especially because it is human nature to look at conditions in the most positive light, which may be inaccurate. At the very least, thinking through your buying plans as outlined above is a responsible step forward.
Have you created a buying plan for your store? Share some of your challenges!
We just got back from the 57th MSA Retail Conference & Expo in New Orleans where we met lots of great people, saw amazing products and heard some great ideas. Here are a few highlights:
Whatever you do, do NOT give up your lighting budget.
–Build, Renovate & Revitalize: Take Your Store to the Next Level with Miriam Works, Works Consulting
If you can’t dedicate an entire store to Made in America, choose a portion of your store for this merchandise, so that Made in America t-shirts aren’t next to the other t-shirts, etc.
–10-Minute Topics with Chris Michel, The National World War II Museum
When you make the choice to designate 25% of your store space to products made in America, you directly change the unemployment rate and economy.
–Choosing American: Practical Applications for Your Store with Michelle Thelen, I choose American
Just because they’re volunteers, you don’t need to dumb down the tasks.
–The Practical Reality of Volunteers with Miriam Works, Works Consulting
Demographics are destiny. Pay attention to them.
–The Consumer in 2012 and Beyond: Buckle Your Seatbelts, It's Going to Be a Rocky Ride! with Jim Dion, Dionoco, Inc.
In this not so great economy, we need to focus on increasing margins by 20% rather than reducing them by 20%.
–Proactive Retailing: Can a Museum Store Be the Destination? with Rick Segel, Rick Segel & Associates, Inc.
Did you see this?
–The four most important words according to Rick Segel, Rick Segel & Associates
Fight for prime space on the major museum website.
–E-Commerce: 10 Things You Simply Must Do in 2012 with Amy Africa, Creative Results
Pinterest is like crack on a screen.
–The Consumer in 2012 and Beyond: Buckle Your Seatbelts, It's Going to Be a Rocky Ride! with Jim Dion, Dionoco, Inc.
Mobile is a huge amount of the future for you and it’s the easiest way to control your users. I would give up everything for mobile.
–E-Commerce: 10 Things You Simply Must Do in 2012 with Amy Africa, Creative Results
What nuggets of advice did you uncover at the 2012 Conference? Share them with your peers!
Today’s post is by guest blogger Nicole Leinbach Reyhle, Founder & Editorial Director of Retail Minded—News, Education & Support for Boutique Businesses. Retail Minded debuted their premiere issue of Retail Minded Magazine in early 2012, the only retail lifestyle publication in the marketplace. Learn more at www.retailminded.com. Nicole also is a guest speaker and expert consultant at the 2012 MSA Retail Conference & Expo in New Orleans this weekend.
Trunk shows offer a fabulous opportunity for retailers, wholesalers and consumers when executed effectively. Because they bring value to all players in this retail triangle, it’s important to use them as part of your sales strategy. As a museum store, this couldn’t be more true. Since many of the vendors you represent have a niche product or are local, leaning on them to support you through trunk shows can be very successful for your store. To begin, you must first understand them.
A trunk show is when the designer/wholesaler/vendor brings products to a store for a special event that is exciting and interactive for customers to attend. Whether customers happen to walk into your store on a day you have a trunk show taking place or you build up excitement leading to a trunk show that has customers coming specifically for this, the event itself should offer more than just a product showcase. Extra products outside of your normal assortment are a great way to excite customers, and reduced prices are always beneficial. For designers who offer one-of-a-kind pieces, such as jewelry designers, this is a terrific way to showcase multiple items at once. For any vendor, however, it has value since you can typically sell through more inventory on this one day then in a given week or month, depending on the retailer.
Details to Consider
While each trunk show is unique to each respective vendor, a few details should be considered from both the wholesaler and retailer perspective. These include:
1. Plan in advance. If you schedule a trunk show, do so with enough time to share this event with your customers. Both the wholesaler and retailer can use email blasts, promotional mailings (if budget allows) and in-store signage to spread the word. If your museum is on board, you can gain additional promotion through signage throughout the museum. Distributing a press release to your local media can also help keep your store traffic flowing.
2. Discuss pricing before the event. As the store manager, it’s your responsibility to decide if you want to offer a discount at the trunk show. Typically, the wholesaler will get his or her standard wholesale price per product sold; however, some are willing to budge here. The benefit to you as the retailer is that often you do not have to buy this inventory up front. However, you still make money from sales sold during the event. So offering an incentive to customers is encouraged to help make this an even more exciting opportunity for customers to shop.
3. Schedule how payment will be made. Because the store will be charging the customers, the wholesaler needs to be sure they are being paid right away on all inventory sold during the event. Remember, many trunk shows bring in new inventory just for the event so you need to ensure they are paid right away for what is sold. Work out the logistics in advance.
4. Be partners in this event. Both the wholesaler and the retailer will have a lot to do to get ready for a trunk show, so make sure you are supportive of each other and trust that each of you will get your respective responsibilities done. If you expect “extras” at the trunk show, such as models, food, drinks, music or anything else, be sure to discuss these details in advance with each other. Define very clearly who will schedule and pay for each extra detail involved.
5. Discuss follow up details from the show in advance. As the host, follow up after your event is key. Thank customers with thank you notes or an email if contact details are available. Thank your participating vendor. And don’t forget the museum at large. Make sure no holes are left open when discussing how you can excel in your customer service experience as partners in this event.
Planning a trunk show is not as easy as 1-2-3, despite what it may appear to be once set up. Make sure you give yourself time in advance to get the event space merchandised, any special displays set up and all the “extras” in place so that there is no rushing around once the event starts. Customers should feel relaxed and welcomed during the trunk show, so always keep this in mind—even if your mind is going chaos. And, remember to place orders right away if the product is not readily available and follow up with any questions that may have been addressed from customers as soon as possible. In the end, all parties involved should breathe a sigh of relief of both fun and success!
As we get ready to head to New Orleans for the 2012 MSA Retail Conference & Expo, here are just some of the reasons why we’re so excited.
1. New Orleans’ culture, history and heritage (and food!)
Although the Conference schedule is jam-packed with opportunities for learning, networking and shopping, we’ll be finding the time to explore the city and all it has to offer. In fact, we’ve already made dinner reservations for most of the evenings and plan to walk our weary feet into the French Quarter to enjoy the local flavors. By the way, if you can’t find one of us during the Conference, we may have slipped out for a quick café au lait and beignet…
2. Networking with members and exhibitors
We love getting out of the office and actually interacting with our members in person! Whether it’s chatting over food and drinks surrounded by WWII memorabilia, enjoying the watermelon soup at the fundraising reception or just chatting on the show floor, we are excited to visit with all our attendees and exhibitors.
3. Walking the Expo floor
Since we hang out in an office building all day instead of the beautiful stores our members run, this is our opportunity to see what’s new and exciting. MSA vendors offer a selection of the most unique products out there which makes us understand why many of our members say this is the show for product sourcing for their stores.
4. Learning alongside our members
With dynamic speakers including Jim Dion, Rick Segel and Amy Africa, plus all the new educational options available this year like 10-Minute Topics and Topical Information Exchanges, we think we’ll be running full speed to get to everything. You’ll probably even see a couple of us dashing from session to session with video camera in hand to catch all the education we can!
5. The French Quarter Festival
Although our long work days don’t allow for a whole lot of play time, we are planning to spend some time checking out the festival and all the excitement that goes along with it. Maybe we’ll even grab a hurricane while we’re out there!
What makes you excited about attending a conference or tradeshow?
This is part two of a two-part series on determining which products your customers will want to purchase and how to increase your chances of selling those products by Andrew Andoniadis, principal, Andoniadis Retail Services.
You have the power to create the “want” in what the customer wants to buy. By becoming known for one to three product categories, customers will react by driving longer distances, spending more money and telling others about your store and specifically these selections.
To create this powerful buying atmosphere, expand the product selection in the chosen categories so the depth (how many of each product you have in a category), breadth (how many different products in the category) or the uniqueness of the selection makes you known for that category. When done well, a customer will stand in front of this selection and say, "Wow, I've never seen such a selection before” and they won't know where else such a selection may be available. They will react by buying and then bragging about their find.
So many customer decisions are based on price. To ensure that you are selling what your customers want to buy, you need to evaluate three important areas. First, are the bulk of your products in a price range that is appropriate for your customers? Each product category should be looked at separately to make sure the “look and feel” of your retail presence and the retail pricing is appropriate for most of your customers.
Second, take a look at your highest priced products. Regardless of the product selection, there are two reasons you should carry some higher priced products: 1) there are simply some customers who look for this type of product, can afford it and will buy it, and 2) although not every customer can afford these products, many will be pleased to buy lesser quality and lower priced products in a store that has higher priced products. To many of these customers the higher prices connote expertise and sophistication that rubs off on their lesser-priced purchase. To maximize the effectiveness of these products it is important they be merchandised in an ambiance that enhances their perceived value, not just throw them in among other products in the same category.
Finally, it is not unusual for 30 percent of the products in a category to be responsible for 70 percent of the sales. Just as I mentioned in part one, this is an unequivocal vote by your customers on what they like best. Never be out of these products. Or at least, don't run out of them too early in the season. If you have a point-of-sale system (POS), make sure to regularly run the reports that give you best-seller information. If you don't have a POS, hand-inventory your best-selling products regularly. Being out of one of these products is not just a single lost sale; it is a lost sale that has a disproportionate effect on revenue and a high disappointment factor for your customers.
What pricing and merchandising strategies have shown you the best results?
This is part one of a two-part series on determining which products your customers will want to purchase and how to increase your chances of selling those products by Andrew Andoniadis, principal, Andoniadis Retail Services.
Individual customers are often wrong. Customers as a whole, however, especially over a length of time, are NEVER wrong. They are constantly voting with their wallets on what they like and what they would like to see more of.
The more you offer what customers want to buy, the more you'll benefit from incremental sales—those additional dollars a customer spends in your store because they unexpectedly like what they see.
Some ways to find out what your customers want to buy include:
- Hang out in the sales area. Observe and listen to what your customers are saying.
- Have your staff write down comments and questions from customers. Create a specific place for these comments to be recorded and then look for trends or repeated comments that will help you tweak your buying plans.
- Ask your customers direct questions. One informal way is to ask all customers over a short period of time to react to the same question. For example, "How do you like our selection of vases?" Keep a sheet of paper at the cash-wrap, write the question across the top and count via hash marks how many customers responded with a positive, negative or neutral comment. Positive comments may encourage you to increase the depth or breadth of the selection and move it towards being a killer category. Negative comments will suggest a closer review and perhaps the decision to improve or eliminate the department. Neutral responses such as, "I didn't see the vases," may lead you to evaluate the merchandising and could explain why a department has not done as well as expected.
- Do an exit survey. This is the most assertive and, in my opinion, the best way to get customer reactions that will lead to a stronger product selection. This survey should be conducted at a point where it is obvious the buying experience is over. The person asking the questions should be knowledgeable about your product selection, non-aggressive and look somewhat official by being dressed nicely, with a nametag and clipboard. The survey should be directed primarily at customers who bought little or nothing. Without revealing why a customer was chosen, you may want to ask, "Did you find everything you were looking for?" A pattern in their responses often leads to the discovery of holes in your product selection and a customer wish list. Interestingly, very often they didn't buy because they didn't see or couldn't find what they wanted and this is a chance to lead them back to their product of interest.
Now that you’ve figured out how to capture what your customer wants, next week I’ll share some ideas about how proper pricing can increase the likelihood of that customer making a purchase.
What are some ways you find out what your customers want?
Today's post is by Susan DeLand, Principal, Susan DeLand Consulting.
We in the cultural commerce industry talk a lot about our stores reflecting our organization’s collections and programs. We speak endlessly about the products relating to same. Good work! But there’s more…I had a conversation recently with a colleague who was not involved with her institution’s store operation. She made the statement that she was afraid that the quality and design of many products in the store were hurting the brand of the institution. She had a hard time putting a finger on just how—the logo was being used properly and many items bore reproductions of objects in their collections. As we discussed this, it began to sound to me like the language of the organization’s public face was not the same as that of the store. Brand language encompasses many things: color palette, fonts, key words and phrases, and visual attitude. The organization had a sign, brochure and ad palette in jewel tones. The store was deeply invested in sugary pastels. This discord was repeated in font use as well. They were in big need of a style guide and one that addressed the quirks of the store and its merchandise.
I would love to hear what some of you do to resolve this kind of disconnect and become brand champions!
Today's post is by Stacey Stachow, Manager of the Museum Shop at the Wadsworth Atheneum Museum of Art in Hartford, Conn.
Over the years, I have teeter-tottered about using volunteers. When I have great volunteers, there is no reason not to utilize them, but when I get a "bad apple" my mind changes.
I know that utilizing volunteers in the museum shop helps control payroll costs but I have found that it may not always be worth it. One problem that always comes up is: are they reliable and should they use the register? I feel if volunteers are going to be in the store, they should be able to ring up sales. What is the point of training someone on all your merchandise and POS system if they can’t ring up sales?
I have also come across volunteers that see volunteering as social hour and then ignore the customers. We are trying to build repeat business in our store, but it is difficult when the customer is ignored and leaves feeling mistreated.
Those of you who use volunteers in your store, do you train them on the register or just on merchandise? Are they more a presence on the sales floor then sales associates?
Don't miss "The Practical Reality of Volunteers" presented by Miriam Works at the 2012 MSA Conference & Expo!