John Styles is an independent sales agent in the bike trade. The former marketing manager, product manager and in-house sales rep thinks the trade might be able to learn something from supermarkets…
OK, so here’s a question for you: How much does a pint of milk cost in Tesco Express?
Is it a) 49p b) 75p or c) £20?
If you work in a bike shop located on the High Steet, you might pop out for a pint of milk from a local convenience store every day, and therefore be one of the few people who can honestly answer, 49p. For the rest of us the answer is almost always £20. Or as my friend Patrick (who runs a supply group who service convenience outlets) puts it: “I know exactly what’s going on, but I still can’t seem to get in and out of a Tesco Express without spending £20” Why? Because convenience retail is all about “Basket Spend”. And it’s true of pretty much all the grocery and forecourt outlets.
The grocery industry is obsessed with it and has become very, very good at it. From siting the milk (the No.1 footfall driver) at the back, to floor routing, category management, planograms, co-location, adjacency planning, till queues offers, impulse siting and even eye line tracking, there is a whole world of measures designed to make you buy more than just the pint of milk you went in for. Still not convinced? Just for fun, let’s just reverse this for a minute. What if Tesco and the like served people milk the way we serve often inner tubes? Imagine this:
Yesterday I went into my friendly local grocery store and I said to the chap behind the counter “I need some milk please”. He sighed a little inside (as I was probably the tenth person that day who needed to be served milk) and said “what type do you need?” I looked at the display of milk (behind the counter) and said “well I’m not sure, it’s to go on Crunchy Nut Cornflakes…?” He turned around and reached down a pint of gold top and said “OK, we sell three types of milk, for Crunchy Nut Cornflakes, you need this milk with the extra cream, be sure to shake it first to mix it. If you’re making tea, you’d want the green top one which is semi skimmed and homogenised so the cream doesn’t separate, and if anyone in the house is on a diet, the red one, skimmed, which is really thin and watery that nobody else likes, got that?” I paid for my single pint of milk, thanked the friendly and knowledgeable member of staff and left.
Sounds absurd doesn’t it? Only because we’re used to being treated in completely the opposite manner by Tesco and the like. Now of course, in the cycle trade, we’re not Tesco, we’re not corporate and we don’t all want to be like them. But that doesn’t mean we can’t take a leaf out of their book when it suits us? Let’s start with the humble inner tube, the cycle trade’s No.1 footfall driver. In the 300 or so shops I’ve been visiting (for the last ten years) I’ve heard a few shops offering added value when selling inner tubes. And a few up-selling and cross selling. But not so often, I’d have confidence we’re making the best of our number one sales opportunity, day in and day out.
Step 1 – Double Your Unit Volume with Added Value
Now, 20 years ago when I worked alongside Patrick for industry giant P&H the key objective for almost every dairy supplier (and every retailer) was this: “How do we get consumers to buy two pints of milk instead of one?” Almost every supply offer, suggested fridge layout and location siting was all about this. So, nowadays, your first step towards spending £20 was most likely putting two pints of milk (75p) in your basket instead of one. So what’s the lesson for the cycle trade? Get a poster up, or several: ‘TUBES: £5.99 or two for £10.00’. And so on. Let’s send more customers out the door with two (or three, or four) tubes instead of just one.
Step 2 – Re-Site your No.1 Footfall Driver
Now, what else did Tesco do to us? They put the milk at the back, where we have to pass everything else in the store on the way in, and on the way out. And where are your tubes? Quite often they’re right by the till, so when a consumer asks for one you can quickly and easily serve him. Noble intention, poor for profit. So how about siting them at the back of the parts and accessories section. They need to see what else you have.
Step 3 – Boost your Basket Spend with… Baskets
We’re talking about Basket Spend here, so let’s be quite literal about this, how about buying some baskets? Pretty much every other store on the High St, whether small or large, has shopping baskets. Every shopping site on the web has a basket. Baskets free up the consumers hands (and minds) to buy more stuff. You’ve never needed them before because most people buy just one or two things. That’s a self-fulfilling prophecy. If you want to increase your Basket Spend, you need baskets. You need ten. Place 3 just inside the front door (where nobody will use them due to the Runway Strip, described in Why We Buy by Paco Underhill.) – they are just there for subliminal pre-conditioning. Then it’s five next to your newly re-located inner tubes. And two by the till. And in the bottom of every basket you put a laminated A4 copy of your inner tubes offer. And maybe you get the Saturday lads to cover them with stickers, less cornershop, right?
Step 4 – Use Them to Best Effect
This is the most important thing of all, it’s what you do with the baskets. When you serve someone, pick up the basket, put products in them (especially the two tubes…) and hand them over to customers. Take a look at the choices below.
All too often we follow Path 1 because after we serve a customer, both people feel compelled to conclude the transaction, to go the till and pay. Part of the reason why we do this is ingrained habit, the cycle trade is perhaps last vestige of service in the High Street. Taking the customer to the till to complete the sale seems natural. It’s either Service or Self-Service. But why not do both?
You could choose to return customers to “self-serve mode” after you helped them. Point out some others things they may need, then make an excuse and leave them, basket in hand (Path 2). When they arrive at the till, hopefully they’ll have found something else along the way. Or if they seem to want more assistance, broaden the conversation (Path 3).
Still feeling this is a bit too corporate, too commercial? If it eases your conscience any, try thinking of it this way. Every time your customer visits a supermarket, convenience store, corner shop, forecourt or High St Multiple, they are going to be offered a slab of chocolate for £1 sitting right next to the till. Perhaps we have a duty to sell a few more cycle products to keep the nation cycling and counter act those calories?
It might take a while for consumers to get used to buying two tubes instead of one but perhaps in two to three years’ time we can look back and ask the question: ‘How much is an inner tube in a bike shop?’
Answer C – £20. I can’t seem to get in and out of bike shop without buying two tubes, some patches and a new set of tyre levers.
And that’s all incremental profit. As several store owners put it to me recently “we only make money seven months of the year, the other five we just try to keep out of the red.” Of course, nobody is ever going to be rich off selling inner tubes. But it wouldn’t take much of an increase in your average Basket Spend to help put you back in the black more often. After all, every little helps.
You can get in contact with John Styles via firstname.lastname@example.org
Read more retail front line insights from John Styles on BikeBiz.com.