The planning of DIY sections with a focus on profitability is based on a strategy that needs to be developed sufficiently in advance, and with sufficient information.
The calculation cannot be done quickly if there have not been several slow calculation sessions beforehand.
Don't forget this.
It is true that sales techniques and tactics take time, if they are to be truly useful in achieving objectives. It is also true that, once the first study of the strategy for obtaining maximum profitability has been carried out, and only then, do the most important factors and their appropriate combination appear before our eyes as absolute truth, as if they had always been there. This is the strategy paradigm for DIY sections.
It's not magic, it's about getting the most out of a job well done. A good profitability study is one of the fundamental pillars of business development. The work done in advance has multiple applications. One of the most useful is to be able to show the sales team that the profitability of a DIY section can be determined with a quick calculation, using other factors that have already been thoroughly developed in the previous study.
What are the factors that determine the profitability of DIY sections?
Factors that get the customer and the establishment to play on the same team, or to dance to the rhythm of the same piece of music, for those who prefer a non-sports metaphor.
We are going to discuss the factors that will allow this quick calculation to be carried out, and therefore help to keep the strategies for a progressive increase in the profitability of DIY products fresh and up-to-date.
The customer enters the shop. They have a specific goal in mind, or maybe they don't. They have a budget, or maybe they don’t. They know which section to go to, or maybe they don’t.
The customer may not know any of these things, but they are part of the DIY shop's sales strategy. This consists of three essential factors: understanding the customers' motivations and emotions; understanding the areas of the shop perfectly and knowing how to apply the sales strategy to the shelves and their distribution within the shop space with an almost surgical precision, and, last but not least, as you may have imagined; applying a cross-selling strategy.
To understand the customer is to understand yourself, developing empathy, anticipating reactions of the potential buyer to certain stimuli and to the layout of the purchasing scenario. It's about putting the entire study of sales psychology into practice, so that we can perform the quick calculation we're looking for.
The customer comes to the shop, in essence, because they need a product, because they need advice or because they want to spend a pleasant time in a familiar environment, their own environment, and get ideas for what to do next after finishing their last project.
In the first two instances, the customer's emotions are overridden by a goal that they themselves have set, which they absolutely must achieve.
But once the customer is in the shop, the strategy is in place to make them react to an unexpected shelf, a cross-selling product or simply some music or lighting that gently prompts them to take a walk around the shop.
Their curiosity has been aroused.
All the stimuli are working, if the sales staff do their job, and the dance begins, ensuring that they will both win. The customer comes out of the shop satisfied, and the sales department moves one step further in the fulfilment of their objectives.
In the third instance, the customer is already motivated when they set out. They know the set up and they move around it like a fish in water. The element of surprise therefore becomes necessary, for example, a change in the distribution of the products. This type of strategy must be measured to the millimetre, so that the line between surprise at an attractive new find and the discomfort of something having been moved is never crossed.
The second factor, understanding the areas of the shop perfectly, includes two points:
- The distribution of the shelves in zones: the cold zone for offers, new products and high rotation products; the warm zone for medium rotation products and products with high and deep ranges; and the hot zone, with low rotation products, which must be sold or bought, above all, on impulse.
- The distribution of the products on the shelves: the pattern needs to be measured is the body, use your own and arrange in your mind those products that the customer, who has a specific aim, wants to acquire. Put products that are eye-catching, which are more attractive than the customer’s need to have them, at eye level. Well-known brands are a good attraction. Continuing on down, put easy access products at hand level, those whose sales volume and commercial margin is more profitable for you. Finally, there is the worst access level, the lowest, the one for the adventurers who are looking for the thing that "only they can find". This is also, for safety reasons, the space for heavier products.
Our quick calculation strategy ends with the third factor, that of the cross-selling, which you have undoubtedly already implemented in previous factors, but which is also getting its time in the spotlight. Cross-selling is a technique that straddles the alchemy of transforming the unnecessary into the necessary, or even the indispensable, and the magic, the white magic, of course, of giving products that seem invisible absolute prominence, as if by magic.
You have the formula, so now you can balance the factors according to your needs. Consolidate your strategy using the descriptive template of each product family, and this will facilitate a quick reorganization of your shop, personalising it and making it as profitable as possible.