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Profitable Times Newsletter

Internal Signage and Store Size – Two Brief Case Studies

Internal Signage

A museum was going through a rebranding process that included looking at signage. They were not satisfied with the retail-oriented signage recommendations from their consultants and asked me to temporarily join the team. Below are some of the recommended changes made to the original proposal.

The first set of recommendations came from the 'less is more' and 'keep it simple and straightforward' philosophy. I can't think of another retail setting where the customer has probably been doing so much reading (exhibit text) before coming into the store. That, in combination with the visitor already having given the institution a lot of time going through the exhibits, led to the recommendation to reduce signage to those that would deliver the greatest return for the time spent by the visitor reading.

The first to go was category signage. There was no need to identify 'Jewelry', 'Books', 'Clothing', 'Toys' and other categories that were visually obvious. This signage added to the visual clutter, was of very little incremental value to the visitor and was an administrative nightmare to maintain as product categories expanded, shrunk and were moved to other parts of the store. We encouraged the book category signs within Books, such as 'Biography', 'Autobiography', Cookbooks', specific event, etc., be retained.

The second set of signs that were challenged were those that were planned to be placed too high. Some of these were banners that ran afoul of two of our generic function, layout and design guidelines. First were those that were at least partially set above the track lighting. In most instances track lighting creates a type of ceiling in that it is very difficult to see higher because of the glare of looking into the light source. The second concern was the competition this, admittedly attractive, signage created with the products. I think we generally don't want the customer walking through the store looking up as they pass products merchandised in the two to five foot from the floor space of the store.

On the flip side we recommended some additional signage. The main suggestion was for product descriptions focused on educating and thus encouraging customers to make a purchase. These included signs that:

  • Helped customers understand why a price may seem high by noting, primarily, handcrafting and the materials used.
  • Since we know visitors like products with a local connection, signage that highlighted local artists and regionally sourced products.
  • Addressed two major types of customers, those who want to be the first to buy something and those who are most comfortable buying what is already popular. Signage was suggested that focused the customer's attention on best-selling and newest products.

Finally, although the proposed signage was attractive we suggested the multiple variations on the core theme were too cute, distracting and administratively challenging. We suggested all signs be printed on cards using standard graphics, paper color, font and logo and be available in a few sizes that could be printed on-demand using the store's printer.

Store Size

The second situation was not a surprise request so much as a surprising result. This museum had already decided to expand the store as a way to increase revenue, so our assignment was to help with those plans. As it turned out, however, maintaining the current size of the store was the most profitable way forward.

As with most projects the first steps were to gather data using our Museum Store Questionnaire and make some basic benchmark calculations and comparisons to the latest MSA Retail Industry Report. This included:

Data Gathering
Some of the data collected included:

  • Visitation: We recommend consistently using some established variation of "the number of people coming in close proximity to the store when it's open".
  • Net Sales: Gross Sales less returns, allowances, and discounts.
  • Number of Transactions
  • Units Sold
  • Number of paid and volunteer hours worked on the sales floor
  • Store Size: The area to which customers have general access including the cash-wrap. Specifically excluded are back of house office, storage and processing areas.
  • Number of active SKUs

Calculations and Comparisons

  • Capture Rate: Percentage of Visitors making a retail purchase, of any size, in the store
  • Average Transaction
  • Net Sales per Visitor
  • Average Number of Units per Transaction
  • Number of Transactions per Salesperson Hour
  • Net Sales per Square Foot

For this project we were able to demonstrate, among other things, that revenue could be increased and some expenses reduced within the current size of the store, without going through the expense, work and space domino impact of expanding the store. Some recommendations included:

  • Incremental improvements to core proactive and suggestive selling skills that would move revenue closer to benchmarks.
  • Recommended focusing on increasing the average number of units per transaction as a straightforward way of increasing the average transaction. It is far easier to keep a count in your head of the number of units being sold as a transaction is building rather than maintaining a running total of the retail prices. Some incremental units will be low priced while others will be higher, but overall revenue will be increased.
  • Reducing the number of SKUs would make the store visually more appealing and facilitate customer's appreciation of individual products.
  • By focusing on setting Transactions per Salesperson Hour goals, staffing expense can be moderated.
  • Understanding the financial pressure of trying to attractively merchandise a store that is too big.

 
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