PCA Magazine Fall 2019

PREMIUMCIGARS.ORG SEPTEMBER-OCTOBER 2019 | PCA The Magazine 43 Outside Perspective – Tips from the Big Box Stores the customer to shop without spending money she hadn’t planned on spending. We called it a ‘housewives’ treasure hunt’ and we were great at it. The takeaway for the cigar business is to focus on making it easy to shop for more products than just the cigars the customer came in for. Cross-merchandising, suggestive accessory selling, placing multiple cigars in the customer’s hand—these are all ways you can have customers walking out the door with more than they planned to buy. Owners and managers should be looking at their purchasing in categories and picking a category of the month or week to drive, rather than focusing on a single SKU. Are lighters weak? Humidors? Churchills? Whatever it is, make it broad enough so your staff have options to sell and specific enough so nobody gets confused and you can measure your results. Signage Consider for a moment two stores on opposite coasts with Tide detergent selling at the same price. One posted a pricing sign near the Tide jugs with regular pricing. The other did not have a sign. The store with the sign outsold the other by 30 percent. No sale price was involved—just a simple sign was enough to attract an increase in sales. Many tobacconists put prices on their boxes for an individual cigar, but do you put a price tag on for an entire box? Some customers don’t know the added value in buying a box because it isn’t called out anywhere they would notice it. Posting the box price and the fixed box discount, if offered, will add box sales nearly without cost. Lighting and store presentation Almost a truism at this point, but making the store a clean, organized and shoppable place is so underrated. The first question merchants are taught to ask is can this product be easily bought. The second question is, will it be. If the answer is no to either, a good merchant needs to impact that situation. Changing merchandising Consistency is important when it comes to pricing and availability but changing things up is great way to increase revenue. At Target, we’d change end caps and feature sets around the store weekly. Rotate a weekly statement table and merchandise it well. Make it look deliberate, full and impactful—a display that will make the customer hesitate in front of it for a moment. Keep doing it and you’ll train your customers to buy even if it’s slow to start— following the Garofalo Method of building a buying culture slowly and deliberately. Slow product liability If you’ve got 30 boxes of something that do not move, add it to a statement, deliberately sell it with an alternative in mind for after you sell through. If you want to move through it quickly, take the bands off and put it in a $5 box with good signage calling out the value. Blow through it, get your investment back through merchandising, and move to another product that’s a better investment. Big box retailers execute price changes and markdowns daily to move through liability. Tobacconists should do the same. Sales rep asset Treat your sales reps like partners and your store will benefit. What have they seen do well in other stores? What are the biggest mistakes they’ve seen? I used to love talking to Direct Store Delivery merchants with a big territory to find out what other stores were doing to move their product better than my group was. Zoning Fifty percent of payroll hours in large format merchandising goes simply to making the product shoppable. Are the cigars faced or are they tossed around in the box? Is everything downstocked? Are the shelf talkers bent and torn? Do the box talkers look good? Every morning we would do a business walk with the store managers and team leads of whatever business we were in and physically make a list of tasks. You hand it to whoever is working that day and they are responsible for making sure everything is done. Then you walk the list again for execution. This ensures nothing is forgotten or done incorrectly, and that the store is up to your merchandising standards every day. Before Jarrid Trudeau was vice president of sales at Kristoff Cigars, he worked for some of the largest big box stores in the world. As an executive for Target and Bed, Bath & Beyond, part of Trudeau’s responsibilities revolved around the art of merchandising. Trudeau offers a few tips from his experience that could easily translate to your premium tobacco shop. High margins vs. low margins Target drives sales in high-margin businesses at the expense of low-margin businesses unapologetically. As an example, Target employs high-shrink, low-margin fresh grocery to sell high-margin soft lines and home decor. In the humidor, this is achievable by leveraging highly available subkeystone staple products as a launching point for a same-price upsell. Twelve subkeystone products are not the same as 12 keystone-plus products, and as a retailer there’s a responsibility to know where your money is made and where you and your salespeople should be spending your time. From a manufacturing standpoint it should be the rep’s prerogative to train and educate on this (especially on TAA accounts because of the deals) and to sell on this considering the value they add over other SKUs. There is a defined switching cost in this case and that is money walking out the door at the expense of convenience. Ease of Spending At Bed, Bath & Beyond, we wanted the stores bright, shiny, well-lit, and full. The idea was to make it difficult for