Retail Merchandising

I went shopping this weekend. As always, my experiences as a customer - the good, the bad, and the ugly - provide ample inspiration for this article.

Here is a tip on a tricky topic for almost every retailer...

WHEN DO YOU OFFER TO PLACE A "SPECIAL ORDER"?

I was in a large specialty housewares store near my home looking for a recipe box and coordinating recipe cards.

When I finally found a nice looking pattern, all the boxes were blue but all the recipe cards were green. Of course, I found a salesperson and asked if there might be any blue cards or green boxes in the stockroom. Nope.

The woman helping me really did want to give me great service and make my shopping experience a success. So she offered to place an order for the blue recipe cards...

I quickly declined!

What is supposed to be a wonderful service gesture is all to often a recipe (heh, heh) for disaster from either a customer service point of view or from a profitability point of view.

Here is why...

The recipe cards are a low priced item from a tiny category in the store so placing an order just for them would likely involve one of two scenarios.

Scenario One:

You usually can not just buy one or two small items at a time from a vendor; you have to place a minimum order of several hundred dollars. So to give quick customer service the housewares store would have to place a mimimum order from the recipe box vendor for merchandise they did not need just so that I could get my $4 blue recipe cards.

Do this for customers just a couple of times a week and you can rapidly get into an overstocked situation. Which leads to bad cash flow, bigger markdowns, lower margins... the ugly list goes on.

Scenario Two:

The housewares store could wait, hold my $4 order until they needed to place an order with that vendor, hopefully remember to add my cards to the order, pray that the blue cards were not discontinued or out of stock, call me when they finally arrived, and pray some more that I actually came back to the store and pick the cards up.

It is a LOT of work for a very small sale and a marginal customer service gesture. In fact, it could quickly turn into a negative service issue if the special order takes too long or is never actually completed.

(I know some of you are laughing right now because it happens in your store all the time!)

So how should you handle these types of orders?

Well, the first line of defense is to prevent the need for most special orders by buying correctly for your store in the first place!

Second, have a conservative policy in place - one that makes sense for both your customer and your store.

I recommend that you only offer special orders on higher priced items (how high depends on the type of merchandise you sell) from a set list of vendors that you know can ship consistently and quickly.

For example, it would have been both great service and a profitable sale if the housewares store offered to special order a $230 9qt. copper casserole from their biggest cookware vendor.

Make sure your special order policy is clear and specific. Then train your staff to use those guidelines when offering to order something special for your customer. If they offer a special order only in those situations where it will clearly benefit BOTH the customer and the store, everyone will be happier.

Of course, there may be situations where, even when your sales person does not offer, the customer begs you to order those $4 blue recipe cards. But with a more conservative policy they will be few and far between.