Big ticket sales

Jim Wilkerson of Blackhawk Hardware in Charlotte, North Carolina, sells a lot of big ceramic grills. The men love them, and their spouses love them, too. Why?

“We tell the wives that for the next five years, there are all kinds of accessories that make good Father’s Day gifts,” Wilkerson said. “It’s a no-brainer. It takes all the hassle out of gift giving.”



And there lies one of the secrets to mastering the art and science of big-ticket sales: the accessory sale. Add-ons like brushes and cleaners, service programs and warranties, safety glasses and gloves — these accessories can make the difference between category dominance and loss leadership. Other considerations, according to retailers and consultants, are creating a buzz, delivering the message and providing the personalized service that makes customers comfortable about paying the price of a big ticket.



There’s no accepted definition of a “big ticket,” but when a sale hits $500, that’s in the neighborhood. Generally, studies of hardware stores indicate the average transaction per customer hovers in the $20 to $25 range.



The Farnsworth Group provides research and retail advice to a variety of home improvement players. Jim Robisch, senior partner of the research firm, describes big-ticket sales as a process — much more like a moving picture than a snapshot.



For items like grills, outdoor power equipment and other merchandise with moving parts, retailers that do it well begin by training and educating their own people. The process includes advertising, merchandising, selling and upselling. And it continues with follow-up and maintenance programs, he said.



It’s one thing to sell a big-ticket item, Robisch cautioned. It’s another thing to profit from that sale. And given the high visibility of the pricing of some of these marquee products, discounting is common.



“It’s a higher cost of sale, because it takes somebody who knows what they’re talking about to make the sale at an acceptable margin, as opposed to a loss leader,” he said.



Tom Cost Jr., of Killingworth True Value in Killingworth, Connecticut, 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.”



At Killingworth, the most popular big-ticket items are Weber grills, Husqvarna lawn and garden equipment, Stihl power equipment, and rental transactions (averaging more than $100). One of the biggest keys for a successful big-ticket operation is service and product knowledge, Cost said.



“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 easier. 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.”



A willingness to make house calls helps sales at Keough’s Do it Best Hardware of Stamford and Ridgefield, Connecticut, which, like Killingworth True Value, specializes in Weber gas grills.



“We can compete with the big guys,” said Bill Keough. “We can sell them at the same price they’re selling them for and still make money. We also sell services, assemble them, test them and deliver them. We’ll go to their house to service them if we have to.”



Keough points to the one-on-one, hands-on approach as the path his stores have taken to success in selling big-ticket grills. “We stock pretty much every gas grill that they make,” he said.



A riskier proposition, he said, are weather-dependent big-ticket items, like snow throwers. If old man winter doesn’t cooperate, then the store ends up tying up a lot of cash in inventory.



According to Do it Best’s Randy Rusk, one remedy for the inventory challenge, and a strategy employed successfully by Do it Best members, is the in-store catalog for power tools, OPE, grills and patio furniture. It’s a way for the customer to “see the full breadth of what’s available in the member’s warehouse,” Rusk said.



Of course, there’s nothing like a live event, especially in the grill category, to give customers a taste of the product — literally. Back at Blackhawk Ace Hardware in Charlotte, the single-day record for grill sales at a special cookout event is an impressive 32 grills.



“We put a pretty substantial effort into it,” said Wilkerson. “The Big Green Egg crew will come up as well, and we’ll have a cookout. But before that, we’ll advertise it with 20,000 emails and newspaper and radio [ads].”



Blackhawk, sitting in the heart of Carolina Panthers’ territory, also experimented this year with Poor Man’s Tailgate parties. Customers meet at the store, watch the game and enjoy grilling.



Wilkerson says the store also has big-ticket success with lock sets and builders hardware. For some luxury homeowners, lock-set tickets can run into the thousands of dollars. These sales are greased by a giant wall of builders’ hardware merchandise.



“You have to make a presentation where someone says, ‘OK, I don’t need to go anywhere else,’ ” said Wilkerson.



That’s a challenge in the age of Web price comparison apps. According to Robisch from the Farnsworth Group, the retailer has to make clear the advantages the customer is going to get.



“The message needs to show the service differentiation. Here’s our price, and here are the reasons why you should buy it here — boom, boom and boom.”