The fastener aisle: a dirrerent approach

By Mlke Brooks Regional Sales Manager, Soutbeast VSI Fasteners, Inc. Atlanta Ga.

O A strategic plan-o-gram placement, targeting increased sales of high ticket, high profit items.

O A pricing strategy 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, lov 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 than create the traditional groups of: low-counl Blisters : High<ount Bli$eru institute a trade up or "profit set" grouping of: same products in bulk loose bins. VSI Fasterrers rcfers to Ois bulk profit set as a 4x4 set, because its bulk quentity boxes are exactly 4" wide by 4" high. Consistercy in packaging gives synmetry and enbances tbe aestbetics bf bulk sets. It encourages the cusiomer who inteoded to buy 80 nus ro buy 100.

Pricing strategy: Both tbe bulk and packaged profit sets are critical to a successful trade up strategy, but without targeted, well maintained pricing, tbey can definitely do more harm than good. An effective pricing

Story at a Glance

A winlwin approach to fasteners for the supplier, dealer and consumet using plan-o-gram placemsnt that targets increased sales of high prcft items... a pricing strategy for high ticket ltems.

strategy clearly rewards the consumer (via a quantity discount) for the purchase of high @unt packages versus low count or single count packages.

Your pricing strategy for fastener packages is probably already in place. Your manufacuurr/supplier should be rewarding you for purchasing higb qufltity packs and most likely you are passing that discount on to your customers. However, your customen probably ir€n't malring the on-site calculations necessary to realize tbey're getting a quantity discount.

Wi& bulk, it's a differenr srory. Typical box pricing is a function of loose piece cost times the box cornt- A discount of l0-157o (depending on your competitive environment) has proven to be successfrrl in promoting consumer trade up.

The purpose of the profit set grouping is to facilitate uading up. By positioning the higber profit" high count item next to the lower profit low count item, 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 defmite long shot.

For bulk fasteners, trading 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 secret to a successful pricing strategy lies as much in the conveyance of the quurtity discount as the discount itself. A common and effective way to oonvey your discount message is through on-pack product announcements, usually in the fomr of str buns sating the type of discount tbe particular package reflects.

An uncommon (at least to the hardwarc indrsfy) way of conveying this discount message is via consumerfriendly shelf tags or CF Tags. In the grocery and &ug industries, where they are standard, CF Tags have proven to be successful in promoting trade up. There are two types of CF Tags: the single tag and the double tag. Both are illustrated at left.

-The strongest advantage to using CF Tags is obvious in the double tag illusration. In our example, 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 to trade up' but there is evidence showing that the shopper needing more than 10 is likely to trade up !o the 50 count size.

In summary, if an approxima@ly 40Vo 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.

Brooks is a plan-o-gram specialist with a background in grocery, drug, hardware and mass merchatdising - Editor.

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