It can be difficult and expensive to constantly attract new shoppers to your store. That’s why one of the most effective ways to increase your profit margins is by getting the shoppers you already have to simply buy more.
Luckily, there are several ways to increase purchase value in retail; from a strategic store layout and product placement to point of sale promotions and more. In this post, I will explore some of my favorite tips and tricks on how modern day retailers increase their average transaction values (ATV) in physical stores.
1 – Know your ATV
First and foremost, before you start strategizing on how to increase your ATV, you need to understand what the metric means. The ATV metric is calculated by dividing the number of sales over a given period by the number of transactions over the same period. If a store has a low ATV compared to other stores – or even its own recent past – there can be a variety of possible root causes, and, as such, a variety of possible solutions.
Maybe your store has become overly reliant on discount promotions, or sales associates are more comfortable selling lower-priced SKUs. Or, perhaps, sales associates are lapsing in selling additional items, such as accessories. Whatever the reason may be, tracking your POS information plays a vital role in improving upon the performance of your store.
2 – Learn how to upsell and link sell
Both upselling and link selling utilize the same general skills from a sales associate: the ability to understand what your shopper wants and needs, and then educating her on the solutions – and corresponding benefits – you can provide.
Upselling is showcasing the advantages of a more expensive item. If a shopper is looking at a medium-priced handbag, for example, an upsell will focus on the benefits to be realized by a more top-of-the-line, and more expensive, handbag.
The technique of link selling, or cross-selling, is ultimately encouraging the purchase of accompanying products and services that make the initial, primary purchase more valuable. For example, a mobile phone might come with an offer of a new mobile phone cover, or a printer purchase might prompt the suggestion for replacement ink cartridges and paper.
What’s important to remember, however, is your associate’s goal should not be “make more money for the store,” but rather “provide more value for both the shopper and the store.” That goal gives them the empathy to suggest the right products to your shoppers which will positively impact customers’ overall shopping experience. Remember, what’s good for shoppers long-term is good for your business!
3 – Offer free shipping on unavailable items
A very simple way to increase a shopper’s purchase value is to offer free shipping on items that aren’t available in store. This way, you won’t lose out on a purchase or part of a purchase just because you can’t physically hand the shopper an item in the moment.
But remember, before implementing and marketing this new offer, make sure all sales associates are up to date with the new business model by ensuring the terms and conditions have been clearly communicated.
4 – Use merchandising to encourage unplanned purchases
The way you layout your merchandise in your store can have a significant effect on the purchase value. This can be done through the use of display stands, wall graphics, posters and banners and other types of fixtures.
Once you have created engaging displays that create a sense of urgency, value and excitement, focus on where each feature will be located in your store. For example, look at selling small, fast moving goods such as gift cards and stationery at checkout points.
Another merchandising technique to consider is to pair items that sell well together throughout the store. Grocery stores, in particular, have gotten really good at these kinds of displays. A fun example of a retailer doing this correctly is Tesco. Tesco got quite creative after they realized a large portion of their shoppers buying diapers were fathers. The retailer began displaying beer and other snacks typically bought by male shoppers in the same aisle and saw an immediate increase in revenue.
Lastly, reduce the amount of stock available on the floor. Keeping inventory levels down on your floor creates an atmosphere where shoppers will need to engage with a sales associate in order to find their item/s, thus ensuring a great opportunity to upsell or link sell.
5 – Take advantage of point of sale promotions
Offering additional products or services to every shopper right at the POS is one of the simplest, most instant and predictable techniques for increasing your ATV.
Make sure your POS easily integrates new promotions into the system and focus on getting creative! Some of the standard strategies include offering a discount for larger spends, buy one get one at a discount deals and product bundles. But these can come in any number of forms.
Increasing your ATV takes a little work, but once you get the ball rolling, you’ll start seeing results. Hopefully, this post brings you closer to doing just that.
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- Advanced Analytics Takes the Guesswork Out of Retail Merchandising Blog
- Unleashing the Power of Advanced Retail Analytics to Drive Exceptional Shopping Experience Blog