Chasing bigger tickets in Connecticut
There may be many definitions of big ticket. But according to the operators of HBSDealer All-Star retailer Killingworth (Connecticut) True Value, there's one guiding rule to maximizing big-ticket performance: "Service and product knowledge trump price."
In an interview with Tom Cost Jr., whose family owns the hardware store selected as a Hardware All Star in 2011, two other major considerations in the arena of big-ticket sales are the art of the upsell and the ability to adapt to an online world.
At Killingworth, the most popular big-ticket items are Weber grills, Husqvarna lawn and garden equipment, Stihl power equipment, and the rental transactions (averaging more than $100). One of the biggest keys for a successful big-ticket operation is service and product knowledge, Cost says. Killingworth's average ticket is about $42, well above the hardware store industry average, which hovers in the $20 to $25 range, depending on the source.
"All of our advertising efforts push the fact that we are competitively priced, not the price leader," he said. "And poor or non-existent service or product knowledge from our competitors make our job a whole lot easeier."
The kinds of messages Killingworth True Value delivers to the community include: "factory trained and certified technicians and sales team;" "priority service for items purchased at our store;" and "we are the regions only Weber authorized servicing dealer."
Cost says the extra add-on sales are very important to the profitability of big-ticket items. And sometimes, the challenge there is to overcome human psychology. There's a natural tendency to relax after closing a big-ticket deal in a hardware store. Cost's advice to his staff and to anyone else is simple: don't.
"You just sold a $300 trimmer, and you might think, 'OK, I'm good.' " Cost said. "Well, actually the margin might stink on that one item. And you're doing the customer a favor by pointing out what they need -- gloves, glasses and hearing protections."
The art of the add-on sale can apply to various categories to various degrees.
"As we head toward spring, a customer coming in for a $25 bag of grass seed can easily become a $100 ticket with starter fertilizer, soil ph correction and other associated items," he said. "We say that grass seed is nothing more than expensive bird seed if not applied correctly."
The opportunity is there for an over-seeder from the rental department or a simple landscape rake.
And -- to recap one of trends reshaping retail -- while the Internet allows a retailer to offer a huge big-ticket inventory with a click of a button, the same click also allows a customer to shop around elsewhere for a lower price.
Cost says he loves the Internet, and he hates the Internet. And for the same reasons. In the negative column, some customers won't even venture into a store. They will Ignore issues such as service, assembly, warranty or delivery. Others will do research online, but it will be the wrong kind of research. "They'll read blogs or customer feedback, and take that as fact," he said. "They don't know the right questions to ask."
On the positive side, many of the online-only customers eventually find their way into the store when they need help. Once in the store, Killingworth's staff fill in the blanks, answer the right questions, and "gain a high level of trust in the process."
Store employees also use YouTube around the store to help show products in action, he said.
"We take the time in store to walk the customer through the project, repair or big-ticket purchase to help create confidence in the selection and the ability to get the job done right," Cost said.