Absolutely! Zoran Sunglasses could be the most profitable square foot of sales space in your store!
In the tough world of retailing, retailers are constantly striving to better understand the sales efficiencies within their store. As a result, the retail industry has come up with a variety of metrics they hope provide better insight as to the mechanics of a store’s performance. Large retail chains and others measure such things as:
- Sales per square foot
- Conversion rate
- Average transaction value
- Sales per category
- Sales per employee
It is hoped that these measures help the retailer improve sales and create a better inventory turn rate.
To illustrate how Zoran Sunglasses can improve your bottom line, we would like to focus on “sales per square foot”.
Retailers use this particular metric to help determine how efficiently their space is used and give them insights for improving store layout, merchandising, staff performance, and more.
When a retailer looks around the retail landscape, there is a wide range of items at various price points. These differences provide different sales levels per square foot. The size of the stores, the type of merchandise they sell and their sales process, also provides a certain level of variability. For example, the retail landscape at big box retailers are certainly different than the retail landscape of a boutique or specialty retailer.
Some retailers such as Apple or Tiffany’s have sales per square foot that ranges from $2,700 to $5,000! While these sales levels are certainly not the norm in the retail business, they do draw a line in the sand because it raises questions about their ability to have such high averages.
Lululemon, a retail chain which sells high end athletic wear, has sales per square foot that average north of $1,500. Their average store footprint ranges from 3,000 to 4,500 square feet. This is not to dissimilar from the average independent bike store of 4,500 square feet (Bicycle Retailer).
Independent bicycle dealers on the other hand have average sales per square foot of around $180-$350 depending upon the store configuration, business focus (retail vs repair etc.) services offered and the average price point of the products sold. (high end vs. standard product offering). This means the IBD needs to be particularly diligent in understanding how the various merchandise options (the various “categories”) contribute to sales per square foot.
Why is the bike store at a disadvantage with regard to the sales per square foot metric when compared to other retailing segments? There are various reasons including service, sales force effectiveness and bike fittings, but we believe the two biggest culprits on the sales floor are:
- Bicycles – Bicycles take up a lot of space. Whether they are crated in the back room or on display, they occupy space. Many other retailers don’t have to contend with the relatively large amount of space bicycles take up. Since inventory turns on bikes are often lower as well, the sales efficiency of the space is lower as compared to other retailing segments. By the way, the overhead cost per unit is higher as well, but we will discuss the profitability impact in another article.
- Product Mix – When a store offers a product with a range of price points from low to high, the gross margin percentage may remain the same but the actual sales and profitability of each product varies. So, if a store sells more low-end helmets or shoes for example, the average sales and gross profit for the “helmet or shoes category” is driven down. The same principal applies to bicycles and every other product category in your store.
So what will help offset some of these space and margin efficiency constraints placed on bicycle stores that want to offer a full range of product? One solution is to stock products that offer a high price point per unit with high margins, preferably keystone margins.
Selling Zoran sunglasses can raise your sales per square foot and increase your store’s cash flow!
Selling inexpensive sunglasses does not make your store any money. Selling Zoran Sunglasses will.
For detailed information on how selling Zoran Sunglasses can raise your sales per square foot, become an Affiliate–its free!
About the Author Dana Carmichael:
Prior to founding Zoran Optics, Mr. Carmichael was a corporate restructuring and turnaround professional for over 20 years. He has restructured multiple retail chains. He holds an M.B.A, and a B.S. degree in finance with a minor in accounting.
