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What Drives Sales in a FEC
By: Howard McAuliffe, Redemption Plus
What drives sales in an FEC? There is little argument these days that redemption, cranes, and merchandisers drive sales in profitable FECs. Over the last 20 years these categories have replaced video games as primary revenue drivers. Furthermore, the product mix in the redemption center, cranes, and merchandisers are what drive sales in these categories. Given these realities, I am surprised how often I see FEC owners and managers misunderstanding how they manage their mix. The common mistakes I see are mistaking mark-up at the redemption center with profitability, obsession with cost, lack of focus on presentation, and lack of theming and rotation of new product. As we move from the second most profitable theme of Christmas to the most profitable, Valentine’s, I will focus on the importance of themes and rotation of merchandise.
I was in a Target store the day after Thanksgiving last year, and noticed several employees working diligently to take down the Thanksgiving themed merchandise and put up Christmas. If you go into any successful retailer right now, you will see Valentines product displayed. These retailers understand the importance of theming and rotation. Family entertainment centers should follow their example. Your loyal customers are looking for new items to play for each time they come to the facility. Even the customers who aren’t actively looking for something new will notice it. Think about walking into your house, you probably don’t see the paint on the wall. However, if you walk in and the paint has changed you will most certainly stop and take note. Redemption counters and merchandisers, if you have the same mix, can become a part of the background. However, when there is a new, well-themed mix, customers who would have walked by stop and pay attention. Once they notice products they want to play for, they will spend their money to win them. So if theming and rotation is important, how do you know when to rotate your mix and how to theme it?
A good merchandise supplier will be able to provide options and advice, but upper management needs to understand the merchandise mix. I am surprised how often managers and owners rely on junior employees with little experience or training to select the merchandise that drives sales in their business. Here are three principles to keep in mind when deciding how to theme your products and when to rotate them.
1- Follow pop culture, using your local retailers as a guide. Major holidays including Valentines Day, Easter, Halloween, and Christmas, in addition to professional sports seasons, all have significant advertising in print, media, and online. Leverage these advertising dollars paid for by others by making sure you have these themes in your facility at the right time and prominently displayed.
2- Pay attention to your sales. When your Road Trip or other merchandiser sales begin to decrease, it is time for a fresh mix. Other than super hot items like Angry Birds, we suggest customers rotate their product roughly every 30 days. We even offer a Kit of the Month option for plush cranes where we provide you the right theme at the right time automatically, making sure you have something fresh about once a month
3- Make sure your theming is neat, clean and big enough to catch the eye. For example putting a few heart shaped pieces of plush in your counter won’t work. However, if you take a section of say 10% of your counter and provide several items with signage and decorations you can grab your customers’ attention.
Merchandise drives sales in your family entertainment center. So, it is extremely important to make sure that your product mix is good quality, correctly themed, and rotated frequently to keep your customers interested and spending money. You can do this by working with a knowledgeable supplier, dedicated staff, and focus from upper management. When doing so, leverage seasons, watch sales numbers, and make sure you display product prominently. I’m confident that focusing on merchandise themes and rotation can help make 2012 a profitable one for your business.
Howard McAuliffe is the crane and merchandiser specialist for Redemption Plus. Prior to this role at Redemption Plus he worked for 10 years as an operator of large crane and merchandiser route in the Midwest and Puerto Rico.
