Growing your hospital gift shop
by David L. Helmstadter
Drive Your Business – Don’t Let Your Business Drive You!
Operating or owning a retail store in today’s market is brutal, if you survive the competition of the big box stores surrounding you, overcome the rising costs of freight, insurance, utilities, maintenance, neighborhood codes, payroll and then actually put profit on the bottom line of your yearly financial report; Congratulations!
You may ask yourself why anyone would want to run a retail store in today’s economy. But many of you not only do it – but are successful at it.
Running a hospital gift shop faces many challenges as well. Not the outward type but just as demanding. We have to deal with maintaining a store strictly with volunteers, receive direction form hospital management which may have little understanding of the retail industry, and cater to the same customer base each day. However thousands of people do it every day across the country and we do it with more passion and dedication than some of the largest retailers.
Managing a hospital gift shop requires excellence. You are surrounded by professionals that “demand” it every day, and you are in their world whether you want to be or not. How we succeed is up to the management to run these little 500 sq. ft stores tucked away in corners, lobbies, basements and hallways. They are usually run by the Director of Volunteer Services who may wear many hats in the organization or group of volunteers. Their mission is to generate earrings to support endeavors greater than putting dollars on the bottom line or money for stockholders.
Why then the title of the article? We have a captive customer base; we don’t need to worry about the weather, road construction or the store down the road. Just open the door and they will come! It’s easy- like clockwork, we know Mary the nurse manager from the 8th floor, buys a bus pass, four “thinking of you” cards, and two angel figurines every month for a $99 sale!
More than 60% of your customers are hospital employees and they love your cute little store. You may hear people say “Don’t change a thing, this store is great” or maybe the new manager thinks “I’ll just open the doors, buy the same products, and be a success.” Sound familiar?
Year after year volume sales are the same with maybe a two or three percent sales gain. The earnings are good, but with rising costs it’s hard to get ahead. Stay this course and you will notice your customers are operating your store.
How do you increase sales? How do you create excitement and draw outside customers to see this gift shop they heard the nurse talking about? Look around, you have plenty of company and it’s time to change, take the steering wheel and drive your business.
There are hundreds of gift companies and suppliers who want your business. You probably receive dozens of catalogs a month and the trade shows are filled with countless vendor show rooms. They crave your business and will work for you if you let them.
There are also subtle changes you can do that can really put you in the driver’s seat. Review your sales report for a month and see what items generate the most daily sales.
Think about where they are they located in your store. Are you making it too easy for your customers to grab what they need and go? Make your customers walk past your new merchandise, let them see something different every day.
Now, look at the three lowest selling departments, you might be surprised to learn a department you have allotted a great deal of space to is producing the least amount of sales volume. Give more space to the product line that is generating the highest sales rate and reduce the ones that aren’t doing as well. Use this approach in every department and start changing things gradually.
Another technique is to start putting pressure on your vendors. Let them know you are looking at anything and everything to help improve sales; you will be surprised how fast they will work for you. Look around your shop and see what percentage of gifts you have from one company. Don’t let your store become the “Brand X” store by overtaking every inch of real estate you have. Also, beware of companies giving racks or spinners, sure they are free, but how much space do they take up.
Another tip is to ask your vendors for a better price. See if they have a “closeout” list, I guarantee they all have one. Buying new products is a roll of the dice, give it a try and order a small quantity. Also, remember when meeting with your sales rep that you are in control of the appointment. Your time is valuable, so tell them upfront they only have a specific amount of time to review their merchandise.
One more idea i to think about your hours of operation. Are you opening too late because you can’t schedule anyone to come in before 10am? Don’t let your store hours be dictated by your employees. Make sure you are open when your customers are willing to shop, remember to explore every possibility.
An obvious, but sometimes overlooked tactic is to advertise your store. Make sure you utilize all of your resources. It can be as simple as creating a flyer and having the mailroom distribute in every mailbox in the hospital. Or try sending out a monthly email that showcases something “NEW” every month. Be creative. Don’t just follow last year’s calendar, do something different and eye catching every month.
Another sneaky way to advertise is by making your registers work for you. If you have a new POS system, learn all about it and use every form to your advantage. Advertise on the receipt by putting a note about a new product or your expanded hours, but change it as often as every week. Or you can create a shopper’s club or frequent buyers program and give your customers credit based on the amount of sales purchased.
It’s also a good idea to know what others are doing in your industry. Visit another hospital gift shop or the neighborhood card store. Look to them for unique items or outside the box ideas. Remember to never let their prices dictate your prices. You have virtually no competition, so set the prices according to what the market will bear.
Holidays are also a great time to boost sales. If you carry fresh flowers, then plan ahead for Valentine’s Day and Mother’s Day. Talk with your supplier to find out what they will have to promote. Then whip up a flyer advertising the gift shop is taking orders for roses for the upcoming holiday. It’s a winner – no carry over and no markdowns.
Here are some other fun promotions you can easily do:
- Have an April Fool’s Day sale
- Give away samples of candy on Valentine’s Day
- Run a coupon sale
- Distribute a flyer in every bag promoting a new item
- Install a photo Kiosk to develop pictures from a digital memory stick
- Run a promotion in a different location of the hospital
- Set up a free tasting for a new snack or food line
Another great resource is your staff. They are your shop’s eyes and ears, so make sure to keep them informed. Let them know you had a 10% sales increase, running an upcoming promotion, or that you are seeing a new vendor to replace the old. Also, remember to listen to your customers. If customers ask about a product you don’t carry more than twice, then go find it. Contact the neighborhood gift shop or one of your colleagues in the industry to help locate that item. Your staff can help you identify what items customers are looking for.
There are countless ways to increase your business, but you must be in the driver’s seat. Running a hospital gift shop business can almost be like automatic pilot, but if that is the case, why have a manager? There are so many things you can do to take your sales to the next higher level. Implement some of these ideas and watch your business grow – now that’s driving your business!
Contributed by:
David L. Helmstadter
Manager – The Gift Shop
Allegheny General Hospital
Pittsburgh, PA