4 minute read
The fastener aisle: a different approach
By Mike Brooks VSI Fasteners. Inc.
O A sfategic plan-o-grarn placement" targeting increased sales of high ticket, high profit items.
O A pricing sfategy targeting high ticket item sales.
Strategic plan-o.gram placement: Assuming that your fastener margin structure, like most, is consistent across the product line within 2-3Vo, you need only focus on high ticket items to effectively select your highest dollar profit producers. In package fasteners, high count blister packs typically offer the most profit per sell. In bulk, bulk boxed offers higher profit than bulk loose. Developing a strategic plan-o-gram focusing on selling more high profit fasteners is simple.
First, for packaged fasteners, ensure that the top selling 50Vo of your low count blister pack is also available in high count blister packs. Then, rather ttran create the traditional groups ofl low+ounl Blhters : High-count Bliders institute a tmde up or "profit set" grouping ofi same products in bulk loose bins. VSI Fasteners refers to this bulk profit set as a 4x4 set, because its bulk qriantity boxes are exactly 4" wide by 4" high. Consistency in packaging gives symmetry and enhances the aesthetics of bulk sets. It encourages the customer who intended to buy 80 nuts to buy 100.
Pricing strategy: Both the bulk and packaged profit sets are critical to a successful trade up strategy,.but without targeted, well maintained pricing, they can definitely do more harm than good. An effective pricing
Story at a Glance
A winlwin approach to fasteners for the supplier, dealer and consumer ... using plan-o-gram placement that targets increased sales of high profit items ... a pricing strategy for high ticket items.
strategy clearly rewards the consumer (via a quantity discount) for the purchase of high count packages versus low count or single count packages.
Your pricing strategy for fastener packages is probably already in place. Your manufacnrer/supplier should be rewarding you for purchasing high qua4tity packs and most likely you are passing that discount on to your custromers. However, your customers probably aren't making the on-site calculations necessary to realize they're getting a quantity discount.
With bulk, it's a different story. Typical box pricing is a function of loose piece cost times the box count. A discount of l0-157o (depending on your competitive environment) has proven to be succassful in promoting consumer trade up.
The purpose of the profit set grouping is to facilitate fiading up. By positioning the higher profit, high count item next to the lower profit, low count it€m, you create the desired comparison and hopefully the desired impulse to buy up. When high count and low count items are at separate ends of your display, the desired result is a definite long shot.
For bulk fasteners, Fading up is even more common in today's bulk sets than in packaged sets. Simply stated a profit set in bulk is one that places bulk quantity boxes next to the
The se'cret to a successful pricing strategy lies as much in the conveyance pf the quantity discount as the discount itself. A common and effective way to convey your discount message is through on-pack product announcements, usually in the form of star bursts stating the type of discount the particular package reflects.
An uncommon (at least to the hadwarc industry) way of conveying tllls discount message is via consumerfriendly shelf tags or CF Tags. In the grocery and drug industries, where they are standard, CF Tags have proven to be successful in promoting Eade up. There are two types of CF Tags: the single tag and the double tag. Both are illustrated at left.
The s8ongest advancage to using CF Tags is obvious in the double tag illustration. In our exanrple, the consumer who shops drywall screws can quickly see the 50 count package of 1"x6 screws is less than halfprice on a unit-to-unit basis. This unit price difference may not entice the customer who needs 10 units o trade up, but there is evidence showing that the shopper needing mone than 10 is likely to tmde up tro the 50 count size.
In summary, if an approximately 40qo profit increase, ' an enhanced pricing image and shopping ease in your fastener aisle are among your objectives, you'll want to implement your version of a profit set today.
Broolcs is a plan-o-gram specialist with a background in grocery, drug, hardware and mass merchandising - Editor. ftonA ftorl-B shows oroiecled onnuol doto from the same oisle represenled in ft0il A ofter 0 conversion lo o proff sef. Pleose litfiilff$flfffiJlifi,lT,iTfli:lf,Tififfitfi'[ffi'flJ;l',Liijitl'h,Tlld1il:lJli,i'ffi*1f;':l:1ff,lJ,lillf,lfl tlaHE LIGHT weight and high I durability of corrugated panels make them an ideal add-on sale for do-it-yourself projects. Or, marketed correctly, they can become the project themselves.
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