One of the best ways to tell if your retail stores are doing well is to compare their performance from the previous period. Revenue numbers alone cannot tell the whole story without context or historical data, so it’s important to look at how a store’s revenue is tracking over a given timeframe.
This is where same-store sales come in. This metric, which is also referred to as “comparable store sales” measures the increase or decrease in revenue of a retailer’s stores for a particular accounting period. It’s typically expressed as a percentage.
“Same-store sales” is an important metric to track, as it gives you an idea of how your stores are performing.
It also goes without saying that retailers should always strive to improve same-store sales. Increasing your revenue (along with maintaining a healthy profit margin, of course) will lead to a thriving and growing retail business.
To that end, let’s look at some of the ways that you can boost your same-store sales.
1. Run promotions… but be smart about them!
Running a sale or promotion is often the go-to tactic for retailers who want to increase sales — and for good reason. They can be incredibly effective in attracting and converting shoppers.
However, promotions can do more harm than good when they’re not implemented with the right strategy.
“Poorly run promotions can be very expensive,” comments Thom Iddon at Formulate. According to him, “discounts on one product might severely undercut sales of another product.”
There’s also an issue of stockpiling, when customers buy several units of an item while on sale, and don’t buy for the next several months.
That’s why you need to be smart about your promotions, and only run sales if you have a plan for how to get shoppers to buy more and protect your profit margins.
For instance, if you’re selling something at a loss or with razor-thin margins, you need to have a strategy for how you’re going to drive profits and sales. Many retailers use loss-leaders to attract customers in hopes that they would buy more profitable items when they’re at the store.
Take bread, for example. As Iddon points out, it’s “a relatively cheap product to discount, [but] can boost sales of cheese, where margins are much higher for a supermarket.”
The bottom line: promotions can do wonders for your sales, but be careful with how you implement them. Before putting up a huge SALE sign by your window, craft a plan to convert customers on higher-margin products when they’re at the store, or at the very least, figure out how you can drive sales from these customers in the future.
2. Collect customer information and put their data to good use
Generating future sales from existing customers can only be done if you have the right shopper data. To that end, make it a point to collect people’s information when they’re in your store.
The best way to do this is through the use of a rewards program. Incentivize your shoppers to sign up for your loyalty platform so you can capture their contact details, along with their purchase history.
Take the denim company Levi’s. The cashiers at most of its locations are trained to ask customers if they’d like to give their email address and sign up for Levi’s loyalty program. To sweeten the deal, subscribers get 20% off towards their next purchase when they opt-in.
Here’s what Levi’s welcome email looks like:
Do something similar in your store. Then once you have your customers’ information, make an effort to stay on their radar by keeping them posted on new products, company updates, and promotions.
Bonus points if you send them messages that are relevant to their browsing history or previous purchases.
Levi’s, once again, excels at this. The brand automatically notifies shoppers when an item they looked at goes on sale, thus prodding them to make a purchase.
3. Invest in your team
“Despite best efforts, some stores perform better than others,” points out Carol Leaman, CEO of Axonify.
According to her, to improve a store’s performance, retailers should “look no further than the frontline workforce.”
“Your associates are critical to your operational success. They’re your shrink stoppers. Your ADT (average dollar transaction) aces. Your process management masters. And your customer experience curators,” Leaman adds.
She recommends investing in training programs specifically for frontline staff. “It’s time for training and communication that meet your retail associates where they are,” she says.
“There are technology platforms that can help. Today you can instantly increase associate engagement with daily communication and reinforcement training, wrapped up in a fun, fast experience and personalized experience on the device of their choice. It’s never been easier.”
We’ve talked about staff training and engagement in more detail here but below are some quick tips you can follow to improve your existing employee performance
- Design a work environment that paves the way for peak performance
- Figure out what drives each staff member, and use it to motivate them
- Offer incentives and rewards
- Help your team reach their career goals
- Tie store goals to a larger purpose
- Be in your stores — reps from HQ should make an effort to spend time with frontline staff through on-site visits, site audits, and more
4. Find ways to drive foot traffic
“To boost sales in brick-and-mortar stores, you also need to boost footfall and get people through the door,” comments Polly Kay, Senior Marketing Manager at English Blinds.
According to her, many retailers miss out on foot traffic opportunities because they’re too focused on incentivizing offers in-store. “It is much easier to upsell or increase checkout values for shoppers who have already made it through the door than it is to bring in additional revenue from scratch, but if you don’t receive enough customers to support growth in the first place, this is not enough,” Kay adds.
Her advice?
Assess your store’s environment and make sure it encourages pedestrians and would-be shoppers to actually walk through your doors.
Kay recommends asking questions like:
- Is parking available and obvious to would-be shoppers?
- Are you easy to find?
- Is there anything unpleasant or off-putting about your locale, such as a lot of garbage in the streets or poor lighting that you need to take up with the local authorities?
- Is your store clearly signed, and evident for what it is, with sufficient lighting, attractive displays, and clear incentives to come in?
“These and many other points all need to be considered to ensure you’re not losing out on trade that might otherwise reach you organically,” Kay adds. Doing so will help you increase same-store sales.
5. Maximize sales from existing visitors
Once you’ve gotten people through your doors, strive to maximize the sales you gain from each customer. Two common tactics for accomplishing this are upselling and cross-selling.
Upselling is the process of selling a higher tier or version of a product while cross-selling is all about recommending relevant or complementary items.
Both these tactics can be highly effective, but only when executed with care.
As Roberta Perry of ScrubsBody puts it, “a gentle up-sell is not only good for my business, but it’s good for my customers as well. If it is done with truth and love.”
“[Let’s say] a person with super dry skin comes in and asks for help. The first and best item would be our scrub, which not only moisturizes, but polishes and cleans skin. I always recommend the scrub first.”
“The up-sell is our Shea butter lotion, which we recommend on non-scrub days, or at night if you shower in the morning. It will absolutely help the customer even more than with the scrub alone and we know this. It will also cost them more money. So we do it with information and demonstrations of the product.”
Perry adds that her store also offers a 30-day money-back guarantee, which helps with conversions and lets customers “shop with confidence.”
Aside from having your associates make upgrade suggestions and product recommendations, you can also cross-sell by being strategic with your merchandising.
“One way to increase sales is to place items not only by category but also next to items likely to be purchased together,” remarks Stacy Caprio, founder of Accelerated Growth Marketing. “This will increase unplanned impulse buys from people buying something and then seeing what goes with it and purchasing that as well.”
As an example, Caprio says retailers can do things like “placing cases and chargers next to laptops, and other things that are complementary all in the same section.” Or placing products like tea next to home brewing equipment and travel tumblers like T2.
6. Make sure your stores are on-trend
FACT: trends can drive retail sales. From seasonal trends (e.g., tank tops in the summer) to those driven by pop culture and current events (e.g., political statement shirts), consumers have a tendency to make purchases based on what’s hot at any given point in time.
That’s why if you’re looking to increase same-store sales, you should ensure that your shops are stocked with trending merchandise all year round. Keep a close eye on hot topics and events in your space, then find ways to capitalize on them.
For instance, is there a blockbuster movie or show coming out? Maybe it’s time to stock products related to it.
Alex and Ani did this well during the final season of the hit HBO series Game of Thrones. The retailer created a Game of Thrones jewelry line and promoted in-store using signage and creative displays.
7. Consider budget-friendly payment options
Selling high-ticket items? You could potentially increase sales by adopting an alternative payment method like “buy now pay later” which is offered by companies like Klarna, Afterpay and Affirm.
Here’s how it works: customers can purchase goods by only paying a fraction of the cost upfront; the rest of the payments are made through installments. The great thing about this is that customers can take home their products immediately and they’ll enjoy interest-free payments as long as the balance is paid in full and on time.
“Buy now pay later” is a boon for retailers because you’re paid the full amount upfront while the payment provider takes on the credit risk.
When it comes to increasing sales, industry data shows that “buy now pay later” can increase conversions by 20% to 30%, and according to Afterpay, retailers see average transaction values increase by 25% when they offer “buy now pay later”.
Bottom line: it’s essential to find the right sales tactics
There are numerous ways to improve your same-store sales, and the best strategy or tactic varies from one retail business to the next. The key to figuring out what’s best for you is to experiment with various initiatives (hint: we talked about them above) and measure the results. Then, take what works and bring them to life in your stores.
About the author:
You must know your supplier. In retail sector it is quite common to establish a strong rapport with a reputable and authentic supplier, once your business starts to expand you via your close and long-term relationship can avail special discounts on bulk purchases. These benefits might also includes apt on-time deliveries and getting first preference on stock. Through having a reliable supplier you will not just attain customer satisfaction, but it will also help boost sales revenues while at the same time reduced operations costs as well.
Thanks for the helpful article Francesca.
Another great strategy is for businesses to use Government funded business mentors to help them grow their business at no cost.