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Dollars Per Square Inch

Consumable profits for surf, skate and wake shops.

Posted 12/1/2012

By Michael Hodgson

When looking for ways to amp up store sales, the natural inclination is to seek that next hot trend or product and hope you get on the wave early enough to ride it to strong gross profit margins. This approach, if you are fortunate, can work well to boost the bottom line―for the short term. But, for long-term sales growth, better is finding a successfully established sales category in other markets, one that is new to yours, and embracing it.

Consumable goods―energy bars, drink mixes, healthy snacks and yes, even fudge―are high-margin, high-turn, low initial investment products that provide strong sales at outdoor specialty stores, bike shops and health and fitness stores. Why not surf and action shops too?

Like watches, jewelry, headphones from companies such as Skullcandy and digital video cameras such as GoPro, that many skate, surf and ski shops now carry, consumable items take up a relatively small footprint, boast high margins and, if merchandised well, promise strong sales volumes.

Plan For Success And Execute The Plan
In order to be successful with the consumable category, you have to have a plan and your managers and sales team need to be on board with it.

Vipe Desai, owner of HDX Mix, advises buyers and store owners speak with their managers and staff to determine what products they use.

“The staff of the store has to believe in the product and use it,” says Desai. “You want them being able to communicate convincingly with a customer, ‘When I get a ding to repair, I use this’ or ‘When I am thirsty, this is what I drink’ or ‘When I’m hungry, I grab one of these bars.’”

Realizing this is a new category for a store means whatever brands of energy bars, healthy snacks and drink mixes you opt for―and having a mix of at least four products is essential to ensure customers see you are committed to the category―put them front and center in your store.

Walk into bike shops and outdoor shops that are selling this category successfully and you will see the product on racks or on the wall or on the counter near the front entrance and by the cash register. Why? It makes the food and drink an impulse buy while customers are waiting to be rung up, and it is a perfect place for your sales team to close the overall sale by saying something like, “If you’re going to be out there tomorrow on dawn patrol, you’ll need some energy and stuff to drink, and this is what I take with me every time.”

Good idea on energy bars, but fudge?
Think the idea of selling fudge in your store will never work? That’s exactly what the owner of Kittery Trading Post, a successful outdoor specialty store in Maine thought when one of his staff, Fox Keim, approached him about selling fudge in the store. But, after several pitches from Keim, the owner gave the go ahead to give fudge a try.

Keep in mind, Keim just didn’t place an order for fudge and throw it randomly on a shelf and hope for the best. The store’s staff worked with the team at Calico Cottage, makers of the fudge, to set up a fudge counter, install it properly and in the right location, and teach the store’s staff how to make fudge easily.

The result? According to a testimonial on Calico’s website, Kittery is selling 10 tons of fudge annually, grossing nearly $250,000 with 60 percent gross profit margin.

The Bottom Line
No, consumable are not the next hot new trend. But they are a very successful sales category helping outdoor, bike and health and fitness stores boost gross sales margins. Why shouldn’t surf, skate and wake shops like yours be cashing in too?

For as little as $1,000 even a small shop with minimal available floor or counter space can embrace the category and start ensuring its customers are not picking up a ding kit from them, then going down the street to a convenience store for energy bars.

 

 While your customer’s need to hydrate may not be as severe as ten-time consecutive Molokai to Oahu Paddleboard race winner Jamie Mitchell’s, stocking your store with drinks, energy, and even sweets might keep your cash register from being parched. Photo: Bernie Baker

 

Five Tips To Ensure Consumables Fly Off The Shelves

Robin Enright, owner of Merchandising Matters (www.merchandisingmatters.com) suggests the following easy ways to ensure you are making the most out of your consumable sales.

 

  • Clean and clearly delineated categories are critical. Differentiate between snack and power foods, recovery versus energy items, etc.
  • Use bins or divided and lipped shelving or some sort of fixture that is food friendly and that keeps product visible and allows for exploration and comparison as well as easily holds your assortment and allows good inventory levels. This will also help keep items from migrating to the wrong section.
  • Take advantage of price point and hunger, and place these items near cash-wrap to spur impulse sales.
  • Price cleanly and with consistent signage to keep down the visual noise. Small blackboards can be very effective and won't get lost among the variances of color and packaging.
  • Remember to merchandise small to large and light to dark and, when possible, utilize vertical color blocking. Vertical merchandising tends to move the eye up and down and expose the consumer to a wider variety of products in the sweet spot (between hand and eye level).

 

About The Author
In a former life, Michael Hodgson was the general manager of a successful outdoor specialty store and then the president of a leading trade news service SNEWS, serving the outdoor and fitness industries. After selling that business, Michael has turned to helping retailers and other companies succeed under the auspices of the HI Endeavors consultant business (www.hiendeavors.com).

 

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