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[FEATURE STORY]
Store Within a Store
Let a sales center create the optimal
selling environment
By Tracy Cox
Photo courtesy of Tobacco Plus in Matteson, IL. |
Whether it’s a place to highlight new products, a focal point for seasonal items, or a place to tell all about a product that’s hot, the store within a store is changing the face of retail. This approach to in-store marketing creates a lively atmosphere and enriches the retail experience for consumers. And with the changing legislative landscape and increasing competition, sales centers can be a particularly important tool for today’s tobacco retailer.
Dave Zoerb, senior vice president of Frank Mayer & Associates, an in-store merchandising and promotion company in Grafton, Wis., says industries revolve around this simple concept. “The idea that has been developed and kicked around in just about every retail venue is the store within a store, and there is tons of research to support the fact that the purchasing decision is often made within five feet of where the product is placed within a store,” Zoerb says. “Everyone is looking to build a fence around their real estate—whatever the category.” In fact, 60 percent of all in-store purchases are unplanned, according to James Maskulka, associate professor of marketing at Lehigh University in Bethlehem, Pa.
The environment at the point of sale has never been more important to tobacco retailing. “Branding is probably more important today at the point of sale than it has ever been,” Zoerb says. “If you look at the way things are advertised today, there is just a proliferation of cable channels, personal electronic devices, YouTube and other means of marketing. It’s not just three television channels and the newspaper anymore.”
Photo courtesy of The Cigarette Store Corp. |
Category management has also changed with this new focus on the point of sale. For example, the supermarket stocks items with marketing in mind—food may be sorted to accommodate meal preparation, for example. “What used to be ‘POS’ is now in-store merchandising, and it also encompasses promotions,” Zoerb says. “Retailers are really focusing on stocking displays and maintaining them. There are heavy incentives for store personnel to take care of these displays. Product knowledge is just so important. Stores don’t have employees organized by department so much as by central checkouts.”
Put products on show
Mary Szarmach, vice president of trade marketing with Boulder, Colo.-based The Cigarette Store Corp., with Smoker Friendly retail outlets nationwide, says that sales centers are designed to showcase products, specifically a retailer’s manufacturer variety. “In the past two years, we have really expanded the sales center concept,” she says. “At our stores, we position the like manufacturers of goods within a section and then separate those sections. It is so important to make sure you have those best-sellers for your region and marketplace—and you have them out, available and ready to go. “
The Cigarette Store has featured RYO/MYO fixtures with brands such as National Tobacco and Republic Tobacco. Additionally, little-cigar displays group together brands such as Altidis, Swisher and Swedish Match, or the stores will categorize products by segments such as smokeless tobacco.
Photo courtesy of Tobacco Plus in Matteson, IL. |
Because The Cigarette Store positions the manufacturers of like goods within a section, the store’s stocking often requires duplication. “With Swedish Match and Swisher we have these brands in our cigar category and then, again, we place them with our moist smokeless or smokeless fixtures,” Szarmach says.
These stores within stores make shopping easier for customers. As examples, Szarmach cites the store’s “Cigar 101” and “Roll Your Own 101” centers, which provide sampling and teaching at the fixtures. “Customers in a hurry are able to shop several categories at once,” she says. “We make it simple for them. Customers looking for RYO/MYO products find tubes, injectors and machines at one fixture. We teach customers how to use the machines. And the shopping decisions are made right at that one fixture.”
Explain your products
Sales centers also are a prime opportunity for educating customers. Darren Schwartz, owner of Smokers Choice, a chain of shops headquartered in Monticello, N.Y., says sales centers are used to showcase the retailer ’s expertise. “With sales centers, consumers can get educated to make a better decision on their purchases,” he says. “Our goal is to teach customers about prices, quality and freshness. With this education, customers can purchase things in a more cost-effective way.”
Creating effective
sales centers
Darren Schwartz, head of the Smokers Choice chain and franchising operation, has these tips on creating and maintaining an effective sales center.
- Think outside the box. Get creative with the sales center concept and how it is carried out.
- Name your sales center. Give your sales center a brand, so it is recognizable to customers.
- Showcase your expertise with education and in-store product promotions and literature.
- Ensure that staff is well-trained in products, sales centers and current promotions.
- Work with manufacturers to ensure optimization of sales.
- Keep sales centers clean and well-organized.
- Keep everyday-priced products and promotional products separated, so customers can clearly see they are getting a deal with the promotions.
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This type of focus on customers reaps rewards for retailers, Schwartz points out, and customers appreciate retailers’ support in their buying decisions. “When customers make good purchases, based on the right information, they are likely to return to you, the retailer,” he says. “Retailers see increased sales when they focus on these centers. Manufacturers appreciate that customers are buying their products. It’s really a win-win.”
Smokers Choice has successfully used the sales center concept, and even branded them for a higher profile. Smokers Choice’s “Make Your Own” centers feature machines with all of the accessories required for rolling, along with the necessary literature to educate customers on the process. “People are sometimes nervous about asking questions on how to use the products,” Schwartz says. “Customers sometimes want to try it for themselves, so we make it possible for them to do so.”
The Smokers Choice Lucky Lottery center is highlighted by gambling machines, which Schwartz sells at a value price. “I based this on the Vegas concept, and I buy used slot machines from Japan,” he says. “Customers walk in the store, and they see the lights and hear the noise, it puts them in a certain sort of mood, and they are paying attention to the New York and Pennsylvania state lotteries.”
The lottery sales center has been a successful concept for sales of non-tobacco products, Schwartz says. “During the holiday season, we sold 180 machines at 22 stores,” he says. “I sold the machines for from $199 to $249 apiece, which is a discount from the amount these machines sell for at other stores.”
These centers take overall store sales to another level, Schwartz says. “We found that with these efforts, we earn customers’ trust,” he says. “They understand that we are experts, and they want to come to us for more items—the machines are one thing they purchase, and then they also notice that we are a value alternative in terms of our product. In the end, they learn that we know what we are doing.”
“For products like tobacco, customers are brand loyal, and they need to know where in the store the brand is located,” Zoerb adds. “Consumers want to get right to the product without standing around. The challenge is how to serve that consuming public while also making it a profitable venture for retailers. The tobacco business is really becoming about building stores within stores so people can find the products in high-traffic retail stores. Smokeless, cigars, pipes—all of these categories are starting to set themselves apart.”
Photo courtesy of Tobacco Plus in Matteson, IL. |
Promote your
promotion
Sales centers are the place to feature promotional information and signage, with highlighting of any relevant discounts. Most shoppers are on a mission, and they may miss promotional information that will encourage their store purchases. The Cigarette Store Corp.’s loyalty cards are touted at these sales centers, for example. “These types of promotions are highlighted at the fixture, where the consumers are making the buying decisions,” Szarmach says.
Promotions related to pricing ensure good continuity and brand marketing, which encourages repeat business and loyalty. Creativity and innovation are key to the success of these promotions, and Szarmach says that tobacco retailers also need to be mindful of the legislative obstacles to marketing. “There are some differences in what marketing is allowed, depending on the state you are doing business in,” she says. “There are promotions with different brands that are allowed by state law.”
Photo courtesy of Tobacco Plus in Matteson, IL. |
“Promotions that are in any way like sweepstakes are tough for tobacco retailers,” Zoerb adds. “The Master Settlement Agreement has changed a lot of marketing tactics that tobacco retailers can use, and many promotions are just not allowed today. Retailers should understand their customers and how they buy and where they buy. Retailers definitely need to make sure that their marketing programs are consistent with whatever legal and retail parameters there are.”
Retailers also have to be mindful of in-store security problems; however, the benefits of sales centers outweigh any negatives, Zoerb says. “If you know how and where the product or promotions are merchandised and it is done effectively, buying decisions are made faster and easier,” he says.
In the end, industry insiders agree that sales centers are often what separate the successful retailers from those that are losing customers. “Don’t underestimate the way that a store within a store can build business,” Schwartz says. “It really sets good retailers apart. I’m always looking ahead and trying to think of new ways to develop these sales centers.”
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