Guide: Diversify Your Store Inventory Columbus OH

Diversity: Stockbrokers advise it, gym trainers push it and forests can't live without it. When it comes to your casual furniture store, diversifying merchandise can increase return on investment and strengthen profits ? helping you not only survive the competition, but thrive.

A mix to your merchandise doesn't mean trying to be all things to all people, but a little variety never hurts.

Successful retailers like Debbie Stegman are always looking for new products to help them excite and retain customers. ?When customers come into the store, we want their eyes to travel throughout, not just in one direction. Unless you diversify, that won't happen,? said Stegman, owner of Patio & Hearth Shops in Dayton, Ohio, which has been diversifying its merchandise since it first opened in 1987.

If sales have slowed due to a seasonal slump, an economic downturn or poor merchandise management, adding new product can boost your bottom line. It has for Stegman, ?because we offer a better mix for our high-end customers.? Even if business is already booming, diversifying can provide the growth spurt to expand. And just think how much better you can compete. ?My stores don't look like the mass merchants, and that sets us apart,? Stegman said.

Diversifying your merchandise can also showcase your products in general.

?Our 35,000-sq.-ft. showroom is one of the largest in the United States,? said David Schweig, president of Sunnyland Furniture in Dallas. ?In order to get our products to stand out on their own merit, each area of the store or vignette needs to take on its own identity. By bringing in a diverse product mix, it makes it much easier to segregate the different types of unique products in the store.?

Be sure you understand what it means to diversify your merchandise. It commonly involves including products that are closely related to what you already carry, not just any products your customers would buy. For example, people in the market for outdoor furniture certainly enjoy other types of furniture, but selling hide-a-beds would probably confuse your clientele as to the focus of your business.

Instead, stock the same product category in a higher or lower price point, or offer a second or third brand. You can introduce an entirely new category, too, as long as it's in line with your specialty or customers' preferences.

Sunnyland Furniture's merchandise is ?based on the versatility of mixing and matching with different collections,? Schweig said. ?We try to maximize the accessories usage, so that in the event one collection sells out, then there is still an appropriate collection for its use.? Unusual accessories make his store a destination for a product selection that goes beyond patio and casual furniture. ?A man who buys a new suit or a woman who buys a new dress can pull that look together with a beautiful tie or scarf,? he said. ?Patio furniture is no different.?

Color rules at Sunnyland. ?If you take your typical dark-framed furniture with the soft tone-on-tone fabric and accent it with stunning color-coordinated rugs, umbrellas, pillows and tabletop accessories, you'll have some gorgeous seating and dining collections,? Schweig said. It all brightens up the store and keeps shoppers' interest.

Treat your customers

When you diversify your merchandise, customers appreciate the:

• Contrast. Serve as a destination for a particular product, and shoppers will be happy to find a diverse selection of other, related merchandise.
• Convenience. They needn't shop one place for mosaic tables and another for plastic wine glasses when they can find both, and more, at your store.
• Continuity. Once you offer something new, customers won't hesitate to buy that from your store, a place they're familiar with and trust.
• Contentment. They feel satisfied with your store, now that you offer a wide selection of outdoor furniture and related products.

What to carry

If you're ready to diversify, the next question is, what to carry? That depends on your:

• Customers. ?I listen to my sales staff to see what customers talk about with them and what they ask for,? said Stegman, whose store also conducts casual surveys.
• Competition. Note what other outdoor furniture stores sell and how they promote it. What could you carry that they don't?
• Current offerings. Your new product mix must logically relate to existing merchandise, either by similar interest or by appealing to the same clientele.
• Community. Turn to friends, family and staff for their ideas about potentially successful, new outdoor furniture products.
• Capabilities. Consider how much of your budget and store space you're willing to expend for any new category.
• Common sense. ?I go with instinct,? Stegman said. ?If my gut tells me not to buy something, I usually don't.?

After you diversify

To make the most of the products that help diversify your merchandise:

• Shoot for the optimum amount. Too much and you risk a larger financial loss if it doesn't work out. Too little and your customers may wonder how serious you are.
• Properly promote. Customers don't necessarily expect that new product line, so advertise it well and draw attention to it with effective signage.
• Show it off. Give those fresh categories center stage, with prominent, cross-merchandised displays that look intentional, not like an afterthought.
• Do what works. Focus on what you've done well, and keep enough of your regular merchandise while developing any new category.
• Represent yourself accurately. If your store moniker doesn't reflect the diversity, it would be clumsy to add ?and more? to its name, and foolish to change it.
• Keep track. Monitor sales of the new category, and determine if the product is generating enough revenues to continue carrying it.
• Know when to stop. ?Colors and styles change, and some products don't always sell,? Schweig said.

Sure, diversifying your merchandise is a bit of a gamble but it's a smart hand to play, if you do your research, prepare your staff and make room for that new product in your budget, your life and your outdoor furniture store. When you do, you'll enjoy the rewards that come with the risks ? and revel in the results.

Stegman said, ?I can tell you that if we had not diversified over the years, our business would not be as successful as it is, today.?

10 things to ask

Before calling that vendor, ask yourself these 10 important questions. Your answers will help determine how you can best diversify your merchandise.

• How do I define my store currently? Look at who you really are, what you sell and how you view your business. Do you like what you see?
• How do customers perceive my store? Ask them what they see, and compare their views with yours. If they're similar, your perceptions are accurate.
• Why do I want to diversify? Don't do it just because you heard it's a good idea. Consider your store, what it might take and how you can benefit.
• How is my current product mix doing? Note the average transaction amount, sales per category and sales per square foot. Are you pleased with the numbers?
• How frequently do shoppers visit? Consider existing and new customers in this tally. Would you prefer more store traffic?
• Do I have the space for new product? If not, adding a new line could involve deleting another or leasing more space. Can you afford to do either?
• Do I have the budget to invest in new merchandise? Can you realistically allot additional dollars to a new category? Would that require a loan?
• Do I have the product knowledge for this category? You may not, but ask yourself if you're interested in learning. Your vendors should help.
• Am I prepared to train my staff? They'll need to know all about the new merchandise so they can effectively sell it. The more you know, the better.
• Am I willing to take the time? Make sure you've got time to spend. You'll need it to figure out what to carry, develop any new vendor relationships and promote the products.

Why diversify?

While your customers are enjoying the benefits of your diverse merchandise mix, you, as owner of your outdoor furniture store, can also reap the rewards:

• New customers. A fresh category of products attracts shoppers who have never visited your store before.
• Increased customer frequency. The right product mix gives more people more reasons to shop your store.
• Loyal clientele. Because your diverse merchandise selection answers their needs, many of these shoppers will visit your store again and again.
• Increased sales. Those who come often to your store tend to spend more money there than first-timers, while the latter also lift your profits.
• Steady revenues. No more slow months when you offer a mix of merchandise categories enjoyed during all four seasons.
• Motivated staff. Your employees like learning about a new product category and appreciate the opportunity to increase their sales commissions.
• Enhanced store image. Your store specialty still allows you to stand out, while new product lines only improve the way customers perceive your business.