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Metrics can be boring. Especially something as dry as sales per square foot SPSF. It is an important measure of success no matter the flavor of retail. The more productive each square foot is the better chance of making a profit.
Traditional retail chains spend piles of money optimizing each square foot. Thrift can take a few cues from them. Of course, the challenge is the ever-changing mix of goods available to put on the sales floor.
Thinking about the value of space is a great mindset to have when walking the sales floor.
Is this display paying for its space?
How long has this big item been here?
Is this category selling?
What is in the back that would sell really well?
Are the displays in high traffic areas earning their keep?
Is what customers are looking for now well displayed?
Are the back displays storage, or selling?
The macro number is really the result of actively managing the micro numbers. Making sure each square foot is doing its job is a major key to success.
Check out the One Action Item near the bottom of this post.
SPSF Killers
Sold goods on the sales floor. This mostly applies to large items like furniture, exercise equipment, and such. A sold item sitting on the sales floor is taking away the opportunity to sell something else in that space.
Stale goods. You know them. Stuff that has had enough time to sell.
Stuff in the wrong place. A men’s belt display in the heart of the women’s department.
Clutter. Stuff randomly piled here and there that doesn’t contribute to sales.
Too wide aisles. Customer space is important, there is a balance between a comfortable amount of customer space and wasting it.
Side by side end cap displays with the exact same thing on them. You won’t sell twice as much that way.
You should know what a square foot costs you a month. A basic number is easy to calculate. Add rent, utilities, insurance, maintenance expense. All of the hard costs that go into the building. Divide that by your square feet and there is your cost for each foot.
Big store layout decisions also make a difference or don’t.
Years ago when I worked in a privately owned discount store, a new owner took over. He had the idea of taking out half of the warehouse space to expand the sales floor. We converted square feet from storage that did not directly generate revenue to sales floor that did directly generate revenue. It made sense on the surface.
Adding footage to the sales floor was only half of the formula.
We did not add any new categories or expand the selection in existing categories. We simply added more facings to the products we had. Having 4 facings of the same thing did not sell more products than having 3. Not surprisingly, sales did not go up.
On the other hand…
The Goodwill stores in my area quit accepting or selling donated furniture. I know from experience that the department consistently has very low sales per square foot. They replaced low SPSF goods with higher SPSF goods. The couple I have been in since the change seems to have also added some customer space with wider aisles. The stores look and feel less cluttered. That was a bold and genius move.
Some things that aren’t for sale that create more sales.
Mirrors. In thrift, clothing mirrors are even more important than traditional retail. Mirrors near the fitting rooms and around the store help people literally see themselves in their selections.
Breathing room at the entrance. It’s important to leave the first few feet of a store clear of stuff. That gives shoppers time to look and orient themselves to the store. Stuff piled up right at the front door can make a store feel cluttered.
Right-sized aisles. Especially in today’s world, room for people to shop and be separated a bit from others makes a huge difference. One of my personal measures is two cart widths in aisles. People will make a choice not to go down an aisle if they don’t see a reasonable path.
Uncluttered checkouts. Selling stuff at the checkout is one of the oldest tricks in the book. When there is a cohesive plan and look it’s a winner. Piling miscellaneous stuff is another.
A couple of cheats
Clip strips. Personally, I hate them, professionally I love them. When I set up a clip strip program a few years ago the number one complaint I got was how hard it was to keep them full. Well, I can live with that.
Vertical space. There are things that can be safely hung from the ceiling. In my current world, we love hanging lighting above furniture. Safely being the key.
Walking displays. During Halloween, it’s fun to let employees wear clothing and accessories. They regularly sold stuff right off their bodies. It also works great for ugly Christmas sweaters, Saint Pat’s day green hats, and accessories. You get the idea, it adds a little fun and flair while selling stuff.
You pay for each of those square feet each month. Each one is a tiny employee.
One Action Item:
Take a hard look at the displays and features in your highest traffic areas. Which ones are turning, making you money? Are there any freeloaders?
Today’s Quote:
“If you work on something a little bit every day, you end up with something that is massive.” Kenneth Goldsmith
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Thanks for reading!
Tim Gebauer - Thrift Retailer
A random picture of my dog, Spencer. He was busy napping while we worked in the backyard.