Winter 2007

Competing to Win By Heather Johnson Durocher

Big Sales Despite

The idea of raising prices, especially when “big-box” stores are around, can leave many specialty shop owners trembling with fear. This is, after all, a sure-fire way to scare off customers, right?

Wrong, says Michael Russo, president of Gift Association of America. Russo suggests raising the price of a few select items, or what he calls “reach merchandise.” This item would be priced just a bit higher compared to the majority of what you carry, says Russo, who is “literally screaming” this idea to gift shop owners at seminars he teaches.

“You’re trying to pique the interest of your customers,” he explains. “You never know where your customer’s wallet is until you reach for it.”

For example, if your high price point is $100, maybe you should have some showstopper pieces for $120 or $125.

“It brings that uniqueness into the store,” Russo says. Meg Brownson, owner of Alfresco Casual Living in Stillwater, MN, was pleasantly surprised after trying this out in her store. “I was [a] little nervous about it because it’s higher-end and they required a pretty high opening order,” she says of her decision to carry metal serving pieces made by artist Michael Aram. “But this line has sold so well for me.”

Another sales-boost tactic: encouraging customers to return to your store by selling gift cards.

“We’ve seen such a tremendous growth in that,” Russo says. And because sales of these cards aren’t counted until they’re used, typically following the holiday seasons, stores are experiencing higher-than-normal sales in off-peak times like January and February. Better yet, customers often end up overbuying their card, boosting sales all the more.

Heather Johnson Durocher

Durocher is a northern Michigan-based journalist who writes frequently about business for newspapers and magazines. She has contributed to USA Weekend, Woman's Day, Parents and American Baby. Visit her website at HeatherDurocher.com