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October 2014 | Vol. XIII - No. 10
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Get Ready for the Holidays: How to De-Clutter Your Retail Store


Merchandise, like food or like alcohol, can be great...

Until you have too much.



More and more, I'm seeing that retailers of all kinds are carrying excess SKUs. And just merchandising them around the store won't solve the problem.

Catherine Lindner, a Walgreen’s VP, said it best: “All that go-go 1990s where we were adding items in and adding items in, and people wanted more, more, more, more choice... just didn't pay off. Now people say, 'Whoa, you're bombarding me. Help me figure out what I need.'"

If the big guys know that, you should too.

You need to limit your selection of merchandise.

Think culling your SKUs, not choosing more SKUs

Too much choice overwhelms a customer’s mind and it shuts down. If you’re trying to improve conversion rates (and who isn’t) – much like a writer, you need to edit.

Start with the easy things. Plan for a fall sale so you can move out these customer distractions.

Here's how to begin:

Take a look at your inventory categories' sales figures by month and year-to-date.
Within each category, look at your bottom 20% – the ones not moving
Pull all orders to replenish and put on your desk.
Once you’ve done those three things, scour your merchandise to find:

The clones. A lot of times we order items at a trade show because we think they are so cool. What we may not realize, unless we have photographed every item in our store and categorized it accordingly, is that we already have something similar.

The orphans. It’s great to have a must-have toy, accessory or tool – until you sell all but the last one. Before re-ordering, critically look and see if the market has moved on. Then slash the price of the last one – even if you sold a ton of them at full price.

The misfits. Got a demo product or one that was opened but a piece was missing? Sure, you could go and order the part so you can sell it whole, or you could put it on your sale table with a sign that says missing a part.  You could even be generous and print out how to get the missing part from the manufacturer.

The returns. Didn’t get that otherwise perfectly fine item returned to the vendor on time for credit? No worries, even without the cellophane or in a ripped box, slap a price on it and get it to the bargain table. You have nothing to lose here.

The dogs. Sitting on complete lines that you ordered in the wrong color? Competitor blew them out at a low price? Who cares? Now’s the time to make them sound like gold and strike their price. If you have to, clean up the boxes, polish the chrome or do whatever it takes to make them look new again. Put up a sign that says, Special Purchase 60% off and move them out.

Help out a vendor and see if they have something you could offer at a really low, doorbuster price. We’re not talking a container load, but enough to help you round out your other items.

You might also want to read Making Friends With Clearance

Now go through your pile of reorders and critically edit if you should bring them back in. We’ve all had that experience of going back to the well too often and discovering you carried an item at the peak of its popularity only to have a reorder burden you with dead weight. So be picky.

Once you’ve cleared out all of that merchandise, don’t fill it up again with more stuff!

Give your edited collection of merchandise more space for customers to move in and around items so they stand out. Use smaller round tables nested around each other to create dramatic display areas for high-profit items throughout your store.

In Sum

Preparing for the holidays is a fun time as your customer traffic increases. Use these next two months to put your best face on your store with lower SKUs and higher sales because you edited your selection of merchandise.



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Bob PhibbsWriter's Bio: Bob Phibbs is the Retail Doctor®, a best-selling author and speaker who has helped thousands of independent businesses compete. His new book, The Retail Doctor’s Guide to Growing Your Business has received praise from both Inc. magazine and USA Today and can be found at your local bookstore or ordered at http://www.retaildoc.com/guide. He and his work have been featured in the New York Times, the Wall Street Journal and Entrepreneur magazine. Questions? Contact Bob at info@retaildoc.com. This article was reprinted with permission of the author, Bob Phibbs, aka The Retail Doctor®. Read more articles by this author

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