{Great Ideas} Four Steps to Maximize Gift Sales

Welcome to the third article in our newest blog series, Darren’s Great Ideas! for Independent Operators. Darren Schulte, NATSO’s new vice president of membership, brings to NATSO a wealth of knowledge about our industry.

Darren has nearly three decades of experience in truckstop and travel plaza operations and merchandising, most recently as the vice president for retail merchandising for TSC Global/Barjan LLC. In 2011, he visited more than 100 independent operators throughout North America. Prior to his time with TSC Global/Barjan LLC, Darren worked for Petro Stopping Centers, Hess Oil and Love’s Travel Stops and Country Stores.

Join Darren here every other Thursday for his biweekly retail column.

Travelers on a road trip, tourists de-barking a bus or professional drivers out on their route are all likely to browse the gift section within a travel center. Having the right mix of products and eye-catching displays can help maximize sales. Here are four tips for making the most of this category:

Limit Selections
It can seem counterintuitive but often having too many products on the shelves can harm sales. One danger of having too many selections is that some of the outstanding product lines a location is offering begin to get lost in the vast amount of offerings. Within our industry, customers are on the move and typically don’t have a lot of time. Improving the shopping experience by making it easier to shop is critical for this categories success. Too many SKUs also require time and effort to manage, which increases a location’s cost. 

Make Displays a Focal Point
Gift areas are often themed by product line, such as Coca Cola and Betty Boop, but deeper departmentalization can boost sales. Operators may want to consider creating a store-within-a-store concept. Apple has successfully utilized this concept in big-box retailers such as Walmart and Best Buy.

Monitor Inventory Turns
By tracking inventory turnover rates, operators can gain a clear picture of how much cash is tied up in inventory and begin striving for improvements. Inventory turns or inventory turnover is the number of times that inventory cycles or turns over per year.

Inventory turns is usually calculated by dividing the annual cost of sales by the average inventory level. For example, if Company X has a total cost of sales of $6,000,000 and an average inventory during this time of $1,000,000, their inventory turns would be $6,000,000 divided by $1,000,000 to equal six inventory turns.

It is important to note that inventory turnover is calculated using the amount paid for the item by the retailer rather than the amount the item is sold for.

For gift items, ideally your goal at a minimum should be to have your gift inventory turn close to four times annually, with the caveat that every location is different and may have a different gift strategy. By reducing the number of redundant products within the category, operators can start to improve their numbers.

Utilize a Replacement Program
As a best practice, operators should implement a replacement program for vendors. This means if a new vendor wants to bring in merchandise, he must buy the merchandise out of the program he is replacing or assist an operator with mark down dollars to push the old merchandise out. Operators should never bring in more merchandise on top of merchandise, especially if it is underperforming merchandise. The goal is to have performing merchandise that customers want. 

/// Read more Darren's Great Ideas for Independent Operators posts here. 

Join the conversation! Do you calculate your inventory turns? What changes have you made to improve your inventory turns? Post your ideas in the comments below. Or have a different retail merchandising, marketing or operations question? Post your question in the comments and Darren will answer it in the next Darren’s Great Ideas! for Independent Operators.