Natural Foods Merchandiser

Getting it right with your higher authority—your customers

Having the right merchandise at the right price is a key to retail success. It creates happy customers, sales, profit and momentum toward repeat business.

But who determines what the right merchandise and right price are? Is it best to carry what you want? After all, you own this business, you are taking the risks necessary for it to succeed, you are putting in the time and effort to make it work —why wouldn't what you want to carry be what is right? Or is it best to carry what your vendors want on your shelves? After all, they know the market and the trends; they see the big picture; they are working with you to move products out the door —why wouldn't you accept that what the vendors endorse is right?

If you, like most retailers, are immersed in the world of natural products, carrying what you want is going to be right much more often than it is wrong. If your vendors —reps, brokers and distributors —are like most in our business, they are truly in touch with marketplace trends and aren't trying to stick you with products that won't sell; their counsel will lead you to right more often than to wrong.

But the ultimate authorities for what is right for your store are the customers who walk your aisles and purchase your goods. These are the people you need to learn from and who should be guiding your merchandising decisions.

Should your store have a bulk-foods section? Should you carry sports nutrition products? While you can get quality input from those in the industry, your customers are your best sources. I have seen stores do well with bulk-food sections and, in the same town, have seen others do just as well without them. Customers who shopped in the stores decided what was right for them.

The ultimate authorities for what is right for your store are the customers who walk your aisles and purchase your goods.

This concept leads to determining the right price. To get to the right price, you may need to negotiate with your vendors to get an everyday low price, an intro deal, some demos and some ad support. If you don't need a line or an item, don't waste time negotiating over it. If it isn't a line that will do well in your store, why tie up shelf space —even if you do get a free fill and a volume discount? Your most valuable asset is shelf space. Putting something with no chance of succeeding on your shelf deprives you of putting a potential winner in that space.

If a line or product is something that would be good to have only at a certain price, enter negotiations but be prepared to walk away if you don't get the terms needed for success.

If there is a line or product that you have to have (it is totally right), you want to negotiate the best terms that you can, but be prepared to accept the best that you can get so you can move the merchandise into your store as quickly as possible. This is not an item you can do without, so don't let a few percentage points keep you from making sales and keeping your customers happy. If you don't have what they are looking for, they aren't going to give up looking; they will just find it somewhere else.

Remember that having a good margin doesn't mean a thing if the product won't sell. In fact, you could improve the margins on every item you carry —you could double or triple all of your prices. Think about it —your margins would be amazing. But what would happen to sales? Sales have to be at a proper margin to keep your business profitable and strong, but focusing solely on margin can keep you from good sales opportunities. Each item has to be priced right —at the level where you are making your needed profit and at the level where your customers will make purchases.

Bill Crawford, director of retail custom programs at Penton Media's New Hope Natural Media, spent 12 years on the management team of a major natural products chain. Contact him at [email protected]

Natural Foods Merchandiser volume XXIX/number 4/p.

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