Tie in accessories with the themes of your displays. Here a gardening motif is highlighted with tools and dry flowers.

The notion of simultaneously planning merchandising and advertising strategies is a matter of common sense to marketing folks. But to some in the retail business, that message just hasn’t hit home yet. That’s not too surprising because, historically, the tie in just wasn’t made.

We continue to see ads that offer anything and everything -- even 99 percent-off sales -- promulgated through local media outlets. But have you thought about the consumer’s perception of such an approach? It likely brings to mind the used-car shopping experience! It also diminishes whatever impact you were trying to achieve with the design of your showroom. Let’s explore the real meaning of merchandising and advertising.

While some people think merchandising relates to how you display products, the actual idea is to find out what the customer wants. From there, you should present and price goods and services to create the greatest possible value.

It’s a two-step process. First you find out who your customers are, or who you want them to be. You accomplish this by doing some market research on the prospects in your trading area. Once you figure out what the perspective buyers are like, you then draft your marketing plan to attract either the largest volume of buyers or concentrate on a specific niche of your market.

Once you decide on your customer, you then start planning on what you’re going to sell them, the services you’re going to offer and what prices you’re going to charge. It’s very important to do the pricing last. Let’s look at the presentation and services first, and I’ll show you why.

How will you present your product -- will you just use racks, or will you include small vignettes? I’d suggest that you don’t rely on racks exclusively. They are really just a filing system for the SKUs the manufacturer is offering. While it’s true that selection is the No. 1 criterion, it’s also true that too many choices can overwhelm. The customer is looking for solutions to their decorating problems. They won’t find the answers in a display rack!

Create small vignettes by putting together products in an interesting way. Combine your flooring products with other materials to show trend-setting ideas and concepts. Show the higher-end or unusual products in these displays, and relegate the more run-of-the-mill items to the display racks. Go beyond what you think your market is!

Once you decide on the products and the presentation of the products, you need to address your service package. Will it include installation? Design services? Hauling away the old products you remove? Cleaning products? A warranty and ongoing contact with your customer? Only once you’ve decided on all these issues can you determine your selling price. If you approach the pricing game by choosing a percentage off, you may shortchange yourself in setting your prices.

Plan your product selection around your targeted customer base. Value should be a key criterion of your business. Product selections should also represent sufficient profit margins for you to operate your business and allow for the services you need to be offering your customers -- which includes your visual displays. It also includes showroom renovations and changes that should be scheduled for at least every 12 to 18 months.

Merchandising also involves shopping your own store and assessing it as you do your competition. (If you find that you can’t be impartial, I would suggest that you hire a mystery shopper.) A good time to shop your own store might be early on a Monday morning. Slow down long enough to look at things the way a customer would.

Is the outside of the building neat and in good repair? Are there fingerprints on the glass entry door? Are the samples and other selling aides put back where they belong before you close each night, or are they there to greet that early bird customer who’s waiting for you at the door before you open? Another good time to shop your own store is after you have gone shopping for a durable goods purchase -- like an entertainment center or furniture -- for your own home. You’ll then have the opportunity to see how others sell and the techniques they use on you!

When you’re shopping the competition, the obvious things to look for are products, prices and displays. But don’t forget to check on the services they offer, their business hours and warranties. A real test would be to take along a proprietary product of yours and see how the competition sells against you.

What will you learn from these exercises? You’ll discover a lot about your staff. You may be exposing yourself to some things you won’t like hearing and seeing, but that you really need to know. You’ll also get a feel for what your position is in the community, and the image you actually project. Again, it may not be the news you thought you would hear or want to hear, but it will be the news you need to hear!

Vignettes don't have to be large and expensive. This display gets the idea across with little more than a tub.
You constantly need to find out what’s on the customers mind. To this end, I suggest you hire a receptionist who answers all the calls and greets all the visitors who come to the showroom. This person should act as the primary information gatherer for your business. The receptionist can also weed out the tire kickers, or the 10 percent of customers that you shouldn’t allow to waste your time.

You should use a “door sheet” to qualify customers. Doing so will allow you to determine whether the customer got to your showroom by advertising or referral. (If it’s by referral, be sure to follow up and identify the source.) Ask customers why they came in, where else have they shopped and where they purchased their last floor. The history you build from this information will allow you to chart your traffic flow and help determine your staffing needs at particular times.

I would also suggest that you encourage appointments. A simple sign says it all: We want to talk to everyone who takes the time to come in, and attempt to do so on a first-come, first-served basis. If we can’t give you the time you deserve, please let us make an APPOINTMENT with you during the week. Thank You.

Now, let’s discuss advertising. Advertising is the means by which we convey the merchandising message to the customer. The average person is exposed to 237 such messages a day! Cost and frequency on advertising is UP and effectiveness is DOWN! It’s no wonder with all the clutter to which we’re subjected on a daily basis. Advertising placement and production translates to BIG bucks, and most new products are really just line extensions.

How can you better and more effectively spend your advertising dollars? Try a combination of public relations (free placement) and advertising (paid placement). For the small retailer, this is the only practical way to go.

Refer back to those notes from your merchandising plan, because they cover the same issues you should be addressing for your advertising plan. As before, you’ll need to track visitors, find out why they come to you and so forth. You should have an advertising plan for every month of the year and you need to consistently work 4 to 6 months ahead of time. Analyze past performances, clearly define your capabilities, and review with your staff and vendors to ensure success.

A plan like this helps you sell the most product at your lowest unit cost and advertise during your highest demand cycle. As you plan for each month, outline the opportunities and how you can address them. Keep a scrapbook of your advertisements and your PR efforts. Also include your competitor’s ads and PR releases. You may discover that some of your best efforts have been derailed because of a competing ad. But you’ll never know unless you can make the comparisons. Planning helps you make good judgment calls on the when, what and how!

Your plan will also anticipate consumer demand for what you sell. It can generate a faster turnover, and higher margins, while targeting the best product categories. It will help you to avoid underselling, make better use of your co-op dollars and maximize your advertising dollars overall. If worked on a continual basis, you should be able to determine the best variety of price points, eliminate the fire-sale approach to moving drops and keep the door open to incremental but highly profitable step-up purchases.

When planning a budget for advertising, you should be spending an amount that is relative to store sales. Apply a constant percentage to monthly ups and downs of the business. Commit to a regular minimum of 3 percent and an average of 5 percent of your gross. The use of shadow spending (more dollars when the customers are ready to buy and less when they tend not to spend as much) helps to effectively control advertising expenses.

Once you start to identify key merchandising opportunities by the use of a monthly planner, you will see how it works hand-in-hand with your advertising plan. It will allow you to choose a mix that encourages high margins and includes trade-up opportunities with clearly defined price points in the hottest categories.

That’s a real recipe for success!