Dealership Merchandising Best Practices

Tips for merchandising your dealership showroom.

Proper merchandising is really an art form. You need to understand the planning and analysis that goes into merchandising a business such as a department store to really appreciate the skills involved. I have worked with several dealers who have hired a clothing and accessories expert with a background in this area. They have proven to me that the skills and training they possess have made a significant difference in overall retail sales.

Merchandising Best Practices

• Track the number of turns per display and ROI per square foot to locate sales hot spots. Utilize them to increase sales of selected merchandise.

• Develop plan-o-grams for locating displays and create planning checklists to determine the contents of these displays.

• Use current styles of displays, keep them clean and in good condition, and change the product and locations frequently.

• Focus on the two major interest points of most shoppers: 1) What’s new and 2) what’s on sale.

• Create special sale areas that are visible from the front entrance, well-displayed and have high-quality signs.

• Seasonal theme and lifestyle displays are an important part of creating visualization for the customer.

Visualization leads to “mental ownership” —  a major step toward closing a sale. Obviously, this type of display sells units as well as parts, clothing and apparel (PC&A).

Windows can be a major merchandising area for these types of displays. Highlight these with spotlights to attract window shoppers .
The service write-up area provides another merchandising opportunity. Create seasonal displays with clothing and accessories including impulse items like gloves, hats, glasses and goggles, etc.

• There should be well-made promotional signage placed at eye-level throughout the store.

• Cooperative promotions with other departments can be very effective. For example, “Free installation with tire purchase.” Generally, the labor costs are either billed to the service promotional account or the PC&A budget (billed by service). Free or discounted accessories included with unit purchases are generally billed to the sales department. If PC&A is using this to sell slow moving accessories, it may come from their marketing budget.

In addition to employing these merchandising best practices, it is imperative that all of the staff in your dealership have basic sales training — well merchandised product still won’t sell itself! Your team needs to know how to properly greet, interview and satisfy a customer — even if  they are looking for another department.

Counter and clothing/accessories staff need advanced sales training including telephone skills. Establish baselines for sales per employee and watch the numbers improve following the training. It works!

Utilize someone with effective writing skills to  respond to email inquiries — timing is critical here. You must respond very quickly or risk losing those customers!

I hope you have found this to be an interesting and thought-provoking look at the marketing and sales part of the PC&A department. If you haven’t been applying the procedures I discussed, I encourage you to do so.

The goal for these articles is to get you thinking about the performance you could be achieving in your dealership. If you have questions, or would like to discuss the help we can provide, please contact me.

Steve Jones, GSA senior projects manager, outlines dealership best business practices to boost margins, increase profitability and retain employees. His monthly column recaps critical measurements used by the leading 20-group dealers. GSA is recognized as the industry’s #1 authority on dealer profitability.

Access to the new Voyager 5 data reporting and analysis system is available for any dealership for nominal fee.

For more information on GSA’s data reporting system, dealer 20-groups, on-site consulting or training, email [email protected] or visit www.gartsutton.com.

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