director of WConsulting, coach, retail consultant.
For examples that confirm these words, you do not need to go far. Look at your market neighbors. There are always 2-3 major players who keep 30-40% of all sales in your city. These are market leaders who, despite the crisis, not only retain their share, but in some cases increase it. And due to what they do it? They are well aware of those very key points of control and, in an unfavorable external situation, strengthen control over them.
In this article, we will analyze five mistakes (components) that companies make in the market of shoes and accessories. These errors are directly related to control points. All the errors that will be discussed are identified in practice - while working with companies selling shoes and accessories.
Error № 1
The leaders have the belief that the current collection, which is sold in a certain phase of the season, should be sold as much as possible by the end of the season and that large stocks of the product are bad.
In fact, if you follow this belief, then, for example, in the last month of winter (February), a limited number of models will remain on the shelves and, most unpleasantly, the size depth will also drop dramatically. For example, in February I conducted an experiment in one of the stores and checked the availability of sizes for models on one shelf. In fact, it turned out that of the 23 models, only three have a full size range; for other models - from one to three sizes. Now put yourself in the shoes of the customer: you come to the store, choose the model you like, and the seller tells you that there is no size ... Take the second model, and also not. You are disappointed to leave the store, and the main question - whether you will return to it in the future - remains open.
It is clear that by the end of the season the size range of models may be reduced, but it is important to understand that the client needs shoes of the right size, and not a wide range, where 70% or more are balances of one or two sizes. Following the logic of reducing balances by the end of the season, many company leaders themselves came up with the myth that February and August are two months of sales, when the company makes almost nothing or even works at a loss. Yes, in these months, of course, you need to sell balances with discounts, but there are solutions that allow you to increase sales and at the same time lose less in margins.
First of all, you need to optimize the assortment. It is better for some models to increase the number of pairs in the purchase, thereby reducing the total number of models. What does it give? Psychologists conducted more than one experiment on the topic of a wide selection of assortment. Consistently, buyers purchased more goods not in those stores where the widest choice, but where it is the most optimal. Too wide assortment, on the contrary, often confuses customers, many are simply lost (we do not take examples of grocery hypermarkets).
Only you can make a conclusion about your wide assortment or the optimal one, but the guideline is as follows: the size range should be present even at the end of the current season, if not on 100%, then at least on 50% models. Of course, managers are often worried about the remains of shoes in warehouses, and the fact that these are frozen funds of the company for the coming 5-6 months. Yes, part of the product will remain for sale next season and will be sold with a new collection, but at the same time, its presence at the end of the season allows you to earn money, and not work at zero or loss. When working in the shoe business, you must accept from the outset that part of the product will always be in stock and wait "for its turn."
Another way to minimize No. 1 error is to increase shelf space at the end of the season for year-round models. You all know very well that there is part of the assortment that is sold all year round. For these models, the size range should be maximum. In shoe companies, for some reason they forget about it and divide the collections by season. And this again leads to a drop in sales and loss of profit. In modern business, the phrase "lost profit" comes to the fore. It used to be, before the 2008 crisis of the year, the shoes themselves were on sale, but now they need to be sold. And if the head of the company does not understand that it is impossible to work with the assortment like 7-8 years ago, then sales will be highly susceptible to external factors. Therefore, the recommendation is as follows: include models with a year-round sales cycle in your product range matrix, and this will definitely add you sales and profits.
Error № 2
Lack of certification of sellers by product.
Most company executives believe that my sellers know the product. But when a “mystery shopper” appears at the point of sale and begins to ask sellers questions about the quality of the leather, about how it differs from the leather substitute, about the brand, country of manufacture, etc., the answers are sometimes simply shocking. More than once I had to listen to sellers telling all sorts of tales, coming up with on the go, there were cases when they simply went to the warehouse and did not return - just not to answer tricky questions and not get into an uncomfortable position.
Therefore, any seller-consultant, before allowing him to communicate with the buyer, should receive a document, “Product Standards”, which will describe the main properties of the product and the distinctive features and characteristics (brand history, if any). And only after that it is necessary to compile a questionnaire from 20-30 questions and make sure that the seller knows the answers to them, after attestation.
Why is this so important to do? Because customers are more likely to buy shoes and accessories from those sellers who more fully and competently talk about their product, explaining why prices for a particular product are higher than those of competitors.
Error № 3
Ignorance by sellers of sales techniques.
As before, more than 90% of sellers in retail trade start a conversation with a customer with trivial questions: “Can you tell me something?” Or “Can I help you with something?”. 80% of customer responses to this question will be, at best, "No, thanks." At worst, you can run into an answer with "sarcasm." And only 20% of customers support a conversation with the seller after this phrase.
Further - more: if it was possible to establish contact with the buyer, the seller quickly proceeds to a premature presentation and begins to comment on each model of shoes or accessories that the client is looking at. The problem is that the seller, bypassing the stage of diagnosis of needs, goes to the stage of presentation, and works on the principle of "guide", which gives comments to each pair of shoes. Sellers do this without knowing the rules for choosing a product by the client - “I look at the product, and I like it — I do not always buy it anyway.” Not knowing the true needs of the buyer, sellers are forced to respond to external manifestations and visitor behavior. And if a client, walking around the store, looked at several models, held them in his hands, and then left the store without a purchase, especially status sellers say after him: "They go and do not know what they want." Well, the seller’s actions when objecting to the price of shoes are generally often associated either with providing an additional discount to the client, or with a story about what poor and low-quality models the market neighbors have with a lower price tag.
Of course, you need to train sales staff, invest not in people, but in their sales results. Many managers think that, here, we will train salespeople, and they will leave the company to competitors, why do we need this? I would answer this with the phrase “You need to be afraid not of those sellers who will leave you, you need to be afraid of those who will remain untrained in your company.”
There are many companies on the market that provide the Mystery Shopper service. Order it, and you will learn a lot about the "methods" of the work of your sellers and be very surprised at how the sale actually takes place. If you do not want to invest in such events, ask your friends to make a “test purchase”.
Of course, in order to systematize and implement the technology of communication with the client, the company must have sales standards in the form of a written document with a step-by-step description of the seller’s actions and key phrases, answers to objections and various ways of concluding a transaction.
Error № 4
Lack of systematic monitoring of sales staff.
As you know, finding a seller, certifying him with a product and sales technique does not guarantee you consistently good sales results. Only the presence of full control over the implementation of regulations and sales standards on the trading floor allows the company to level out external adverse factors (economic crises, increased competition, lack of professional sellers in the market). Any seller, if his work is not controlled, sooner or later falls into the comfort zone. And his comfort zone will determine the turnover of the store, and the ceiling on which sales sooner or later “rest”. Therefore, a key component for the work of sales staff is a system of motivation and control.
When I, as a consultant, suggested changing the existing motivation system in two shoe stores, the manager had doubts that this would affect sales. But sales results showed growth in turnover and profits. If the seller’s motivation system is tied to sales plans (personal plan and store plan), then his comfort zone is expanding and sales are growing. The only question is how to set the sales plan correctly. Too high a plan will demotivate sellers. The plan should be such that its implementation would be the result of hard work, and not a feat, that is, a real one. To motivate sellers when switching to a new payroll system, it is very advisable to first work on the errors No.2 and No.3, which were discussed above, and then sellers have additional resources, due to which sales growth should occur.
Naturally, the motivation system will give maximum effect only when monitoring the work of sales consultants by their immediate supervisor. He needs to support the application of sales standards and product knowledge in the team, daily, weekly, monitor the performance of sales plans for each seller and look for resources to fulfill the store’s sales plan.
Error № 5
Lack of a reasonable calculation of the number of sellers at the outlet.
Now, when the market is experiencing a decline in consumer activity, many companies have reduced and continue to reduce sales staff. Yes, in some cases where there is little traffic, this is quite reasonable, but most often this is not worth doing. Let me give you an example: in response to a recommendation to increase the staff of sales consultants, one client told me that if we now add sellers in the store, those that are already working will not be able to “sell” a guaranteed minimum, and existing sales will be distributed among the increased number sellers ... Additional sellers in the store nevertheless appeared, and total sales in increased, on average, by 25% for six months.
Why did this happen? Because the "old" sellers "did not see or sell" the shoes to many customers who entered the store. They ignored them. New sellers simply began to sell to those customers that no one had noticed before in the store. The sales funnel conversion increased from 5,5% to 7%. Internal competition between the employees of the trading floor increased, as sellers were placed in such conditions when they stopped choosing customers who need only expensive shoes.
How to understand whether it is necessary to increase the staff of sales staff or not?
Divide the average number of customers entering the store over 1 day by the number of sellers. Next, divide this number by the number of working hours. And look, is it really real quality to serve such a number of buyers to one seller in 1 hour? Remember that there are customers who choose shoes for 30-40 minutes, and there are many.
Remember also that customers go to the store not strictly by 5 people per hour. There are downtime and peak times. And answer at the end of this article the question: “Do you work to win or not to lose?
If in order to win, you need to understand that yes, there will be times when most of your sellers will be waiting for customers, but at the peak time they will all together be able to service and sell to more customers! You will change the motivation system, will train your staff, create a control system and increase the sales bar, maintain the presence of depth of shoe sizes.
If you work so as not to lose, then you will reduce staff, put up with the lack of sales techniques from your sellers, pay them at a minimum, reduce the purchase of models and sell goods at cost at the end of the season.
In any case, the choice is yours!
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