Providing new styles and products is part and parcel of being a merchant, but which factors should you take into consideration when it comes to adding new classes or categories to the mix?
Say, for instance, you want to add gift items to your clothing store, such as books and candles.
The first place to start is to make sure that you have the budget required. If you introduce a new category, you don’t want to dabble. You need to really commit and show your customers that you are behind these products and you are giving them dedicated space and assortment.
Another consideration is whether these items fit in with the story you are telling to your customers. Are they part of the lifestyle you are selling? If they don’t make sense, your clients may pass them by.
Next, you want to evaluate the price points that these items will represent in your vendor mix. Are they much cheaper, or significantly more expensive, than the prices your customers are accustomed to?
If they are too inexpensive, it may not be worth the effort since your margins could deteriorate. And much more expensive items may take longer to get traction, so be prepared if you decide to offer something that stretches your customers’ budgets.
Once you’ve chosen your new products, you have to give them time. Monitor them over the first season to determine if the sellthrough rate is high enough to warrant a reorder for season two. You may want to take a look at the sales history of products introduced in the past to see how long they took to gain sales momentum.
If you see no momentum halfway through the first season, it’s time to come up with an exit strategy. Don’t wait to take small markdowns later on. Mark them to move, and look for other products that may work better.
It’s important to remember that retail is all about offering newness, so in addition to adding new classes and categories you should be rotating the vendor structure of your current mix by about 10% to 15% each season. This will keep your floor fresh, and give your salespeople more to talk about.
In Summary:
1) Make sure you have the budget/pricing for a new class/category
2) Does the new product fit in with the story you’re telling?
3) Commit and monitor
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