Fall 2010 What factors should retailers consider before choosing a product for their cart or kiosk operation?

Micheal Brother, National Program Consultant at AB Sales

Micheal Brother, National Program Consultant at AB Sales

The most important factor a retailer should consider is whether the products will sell well. You have to understand what your mall consumers will buy, based on age, sex, and income, among other things. Look at which stores seem busiest, and take note of who their shoppers are. Then find great products that appeal to those buyers.

Next, do the math. The product line has to offer at least a 300% markup. You have to be confident that the product can yield a sales volume that is equal to at least five times the cost of your rent. If your products meet both criteria, you have a winner.

You also have to consider the minimum opening order, and the display cost for set-up. You need to invest enough on visual display so that you get the impact that works. Make a short-term business plan to understand how long it will take you in each case to get a return on your investment (ROI). If you don’t have enough capital to cover costs until then, you may need to choose a different line.

Heidi L. Cardall, Sr. Director, Specialty Retail at CBL & Associates Management, Inc.

Heidi L. Cardall, Sr. Director, Specialty Retail at CBL & Associates Management, Inc.

Choose a product mix that you are passionate about. Whatever the theme or trend make sure you really enjoy it enough that you will be invested in the business. No one will care about your business the way you will. Someone once said, “You only get out, what you put into something.” That would stand to reason in this situation.

Focus on what will work in the space provided. This will keep you organized and prevent you from over-extending yourself. It is advisable to develop written plans and create visual mock-ups to keep on track.

Once drive, determination and passion are set, focusing on the other parts of the business becomes easier. You will not be distracted by too many products and can focus on choosing the right market, location and pricing for your product.

Robin Bessinger, Specialty Leasing Manager at Orlando Premium Outlets

Robin Bessinger, Specialty Leasing Manager at Orlando Premium Outlets

When choosing the product mix for a cart or kiosk, do your homework.  Look for a product with mass appeal and know your market. Choose a product with a high markup, at least 3 to 5 times or more. Research wholesalers for the best price for product, quality, service and inventory levels. Ask for discounts if buying in bulk. Ask about return policies if product does not sell and if a warranty is offered on the product.

Use your resources and branch out to other markets for products—don’t just rely on the wholesaler in your city. Also consider how much you have to sell to cover all your expenses. Knowing this helps form your business’ rent-to-sales ratio and your net profit.  

When focusing on a particular product, ask about additional items you can sell to increase the transaction total. (Ex: If selling cameras sell add-ons like cases, batteries, flash drives, adapters, etc). Know if your product is a long-term seller or a trendy item that will only be around for a few weeks or months. And lastly, ask the wholesaler/manufacturer for product enhancements and selling tools such as signage, videos and display fixtures and cases.

Sergio Lopez, Quest Enterprises, Inc., a Sunglasses Retailer at Orlando Premium Outlets

Sergio Lopez, Quest Enterprises, Inc., a Sunglasses Retailer at Orlando Premium Outlets

There are many factors that retailers should consider. Here are a few of them:

1. Specialization. The more you devote space to one product category on a cart, the bigger the impact. Can the item succeed on the cart without having to bring in other items? A cart filled with fashion sunglasses is more likely to be successful than a cart that has to mix fashion sunglasses with fashion watches.

2. Sellability. Can the items be sold on a cart and can you and your team sell them? There are certain items you need to demonstrate aggressively. If you and your team are not outgoing in your approach with customers, you need to stay away from these items. 

3. Presentation. Will the item look good on the cart? Will the customer have enough variety to choose from for this particular item?  Is there enough space to display and stock the item? Presentation is key to stopping customers and convincing them to make a purchase. 

Ann Freibert, Specialty Leasing Manager at Morguard Revenue Properties

Ann Freibert, Specialty Leasing Manager at Morguard Revenue Properties

First, know your market. Be sure to research the customer demographics of an area. Your local Chamber of Commerce will provide a world of information about consumers such as age, income, education, zip code, etc. Knowing if a community has young affluent families moving into the area; or if the community has well established neighborhoods with an aging population, will help you make wise buying decisions.

Once you have selected the type of merchandise you wish to sell, consider the depth and breadth of inventory needed to support a successful cart or kiosk business. In other words if you are selling one type of item such as jar candles, and the candle style does not change with the seasons, it is helpful to have depth of inventory so as not to lose potential sales. A women’s accessory cart however may be better suited to having a wide breadth of inventory, meaning the cart may have several different styles but may not have several pieces of the same style. This approach helps the fashion retailer turn inventory, making room for the new season’s styles.

But never stay so committed to today’s successful style that the commitment causes you to lose focus on new opportunities. Today’s trend may wind up in tomorrow’s sale bin—so stay ahead of that retail curve.

Sharon Loeff, Shopworks

Sharon Loeff, Shopwork

Make sure the overall merchandise concept reflects one retail theme. The product category should fit into a small space, i.e. RMU/kiosk. Don’t deviate from the chosen concept. Historically the most successful product categories are ones that have a retail price point of less than twenty dollars, so the majority of the product should retail in that price range.

Choose products based on the following criteria: fits the chosen theme, relevant to a hot retail trend, appropriate for the mall’s customer demographics, ability to sell the product with a triple keystone markup or greater, and a retail concept or product that is unique and not readily available in an inline store at the mall.

Never over-merchandise a common area unit with too much product because it detracts from the presentation. Remember the motto, “less is more.”