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SPACE -
THE FINAL
FRONTIER
FOR PROFIT Andy Campbell suggests how to optimise your retail space for maximum profit “If you can see any backboard, the implication is that space is not being utilised as efficiently as possible”
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n garden centre retailing today, we already accept the disciplines of buying management, supply chain management, waste management and cost management – we don’t need any more, surely? Well, I would like to make a case for just one more; that is – space management. Your retail space is one of the most valuable resources a retail business has, along with your brand, your customers, your suppliers and of course your team. If you are seeking to maximise your profit, you have to optimise the use of your space. In virtually all garden centres, space is a finite and limited resource, especially the more expensive internal covered area. More expensive, for several reasons including initial capital investment, rates payable, heating and lighting as well as the ongoing costs of maintenance. So how do you go about optimising the use of the available space? The starting point has to be to question whether you have the right balance of internal to external space currently for the offer you wish to put together for your customer base. The decision to build additional internal selling space is an important one. Still, the existing space is invariably the limiting factor to the overall level of turnover that can be achieved. But before you go to the expense of increasing internal space you have to be sure
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you are making the best use of the existing space. The next issue to be considered is whether the balance of accessible selling space to storage or service space is correct. While I accept the latter is a requirement bearing in mind the seasonality and weather dependency of many ranges and bulk purchasing in advance of the season; I am mindful that if customers can’t access it they can’t buy it. I am, therefore a strong advocate of minimal storage areas and maximum selling space. Once these balances have been addressed, the critical issue becomes ensuring that you have the right product, in the right quantities, in the right place, taking up the right amount of space, at the right time.
RIGHT PRODUCT This is about having the breadth and depth of range most suitable for the consumers within your catchment area. Not only your existing customers but also those who don’t currently shop with you, but potentially would if they felt the offer was pitched in such a way as to include their requirements as well. It also involves careful construction of ranges to encourage customers to trade up, increasing the individual sales value and the cash profit on the transaction, thereby maximising the return from the space. Perhaps most importantly though the critical issue when it comes to product selection is identifying the absolute best sellers that are going to sell in volume and turnover quickly, and to concentrate on these. The challenge is to identify these and determine just how many of the tail of slower selling lines you need for range authority.
HORTICULTURECONNECTED / www.horticultureconnected.ie / Spring 2020
