The Eight Rules of Retailing

The Eight Rules of Retailing
The 'same old, same old' or something more?

By Roy Katz

Some travelers seek out gourmet restaurants. Others hunt for historic sites. But when I travel on business, I visit self-storage facilities. I like talking shop with owners and managers. I've learned a lot about self-storage from them and, I hope, given them some good ideas on how to improve their retail sales.

There was a time I would have had to convince operators that carrying retail products made sense. It's been a long time since I visited a facility that didn't stock at least some merchandise, but some do a far better job of profiting from it than others. So I'd like to give a few pointers to those who a) think they can improve their retail business or b) think their sales can't be improved.

Retail and Returns

Self-storage professionals who are good at retailing have figured out what it adds to their bottom line. An 8-by-6-foot area48 square feet of wall space and less than 16 square feet of floor spacecan earn you anywhere from $12,000 to $24,000 a year. If a piece of real estate sells for 10 times its earnings (at a 10 percent cap rate), $24,000 in annual retail sales translates into nearly a quarter of a million dollars in added market value. The sales of moving and packaging supplies by truck-rental firms, office-product superstores, parcel- service centers and self-storage facilities is fast approaching $750 million a year, and smart operators are out to get their share.

If the retail business has taught us anything, it is consumers decide which companies succeed. The retailer who can define consumers' needs can redefine the marketplace. What the successful self-storage operation of tomorrow will be like is anyone's guess, but it's easy to predict its retail sales will play a major role in satisfying customer needs, altering consumers' perception of the business, and improving profitability.

If you're like the vast majority of operators, you're already doing some retailing. But are you doing all you can? Following are eight rules to help you maximize your merchandising.

Rule 1:
Use Your Planning Skills

Many self-storage owners are timid in their approach to merchandising because they feel it is unfamiliar territory. Retailing is not difficult if you apply the same skills you used when developing your property and creating its success strategy. So begin with some planning and research. Get to know your clientele, your neighboring market area, and your competitionnot just other self-storage businesses but any selling similar products. If in doubt, seek sound professional advice.

Rule 2:
Make a Good First Impression

Your office and retail area tells your customers what they can expect from you by way of service and security. If it doesn't convey the right image, you might not even rent them space let alone sell them retail goods. So don't be afraid to redesign your office and retail space or ask a supplier who specializes in merchandising for advice.

Retail is all about presentation. In your layout, keep all products grouped together. This will increase regular as well as impulse sales. Merchandise your supplies so they are easily seen and logically organized. For instance, build box slots into a wall or counter or use attractive box-bin fixtures. Moving and storage boxes are large and take up a great deal of space. A well-designed display eliminates clutter and makes selection easy.

Rule 3:
Give Them a Sign

Signage is like the "icing" of your sales programyou may have a delicious cake, but no one is going to try it if it doesn't look appealing. Your signage communicates vital information about the quality of your business, so it should look professional. A primitive-looking sign or poorly designed retail area is actually worse than nothing at all. Why create the wrong impression?

A sign hung over your moving and storage supplies frames them and creates a supply department. A signs that reads "Pack your cherished belongings the professional way" expresses a previously unrecognized need. Signs can also build incremental sales, for example, "Buy five boxes and receive a free economy-size roll of bubble-wrap." Finally, signage helps customers make decisions. Signs hung over box slots can indicate sizes, removing the guesswork from product selection and eliminating the need to have boxes assembled on the floor.

Rule 4:
Pick Products That Sell Themselves

Your retail customer is attracted to products that are easy to understand and use. That's why the best packaging does most of the selling for you through the use of dynamic graphics, demonstrational photography and helpful copy.

Good retailers know an informed customer is more likely to make a purchase or even multiple purchases. If he doesn't know what a cell kit is, or that larger diameter bubble-wrap is better for packing heavier products, or that disk padlocks provide a greater level of security, how will he learn? The average customer usually won't ask. Instead, he relies on the packaging to educate him. Package design is as important as price to your customersand should be to you, too.

Rule 5:
Discover a Brand-New Way to Brand

In today's competitive self-storage world, a successful owner knows his brand is more than a name or logo on a sign. It is everything that defines who you are to your customers and differentiates you from your competition. In short, branding is far more than exterior signage.

Do you want customers to understand your facility is professionally managed? Keep your property and office area looking well-maintained and merchandised. That's branding. Customer perceptions are influenced by the smallest details, so training employees to serve them better and more professionally is branding, too. But did you know you can use well-known brands to build your own?

Consider your top-end retail stores. While they may have a house brand, they're known for the other high-quality brands they offer. Why do well-known names sell and lend prestige of those who carry them? For years, these companies have invested a great deal into advertising to build their products and create sales momentum. Feature recognizable, trusted brands on your displays. Your retail sales and image can only benefit.

Rule 6:
Keep Your Eye on the Donut

Just about now, some of you are thinking, "The guy down the street has cheaper locks or boxes," or "He has his own brand," or "His margins are bigger on private-label retail products." And I'm reminded of the sign in the donut shop that reads, "In life, keep your eye on the donut, not the hole." Here's what I've learned from successful self-storage businesses:

  • Customers may shop around for the best rental rates, but once they've chosen a facility, a few cents more or less on locks, boxes, etc., won't faze them. They're as close to a captive audience as you could want, so cheaper retail prices won't really improve your sales performance.
  • Customers really do associate name brands with a quality. What are they going to think about Crazy Irv-brand locks at Crazy Irv's Self Storage? Is that better margin worth the risk? You bank dollars not margins. Would you rather have 50 percent profit on a cheap $3 lock or 40 percent profit on a $5 brand-name lock? Always determine the actual dollars you'll netit's an eye-opener.

Rule 7:
Sell What They Need Not Just What They Want

A recent trade-magazine article featured a self-storage owner who thought it was a good idea to "save" money by stocking only the best-selling retail items. It made me think of something I once read, that of all the varieties of Campbell's soup in the supermarket, the bulk of sales comes from just three kinds. The reason the company continues to make so many "loser" soups is simple: First, the shopper expects the leading brand to offer more variety and, second, all those red and white cans act as a display that attracts shoppers.

So if you're only prepared to meet customer wants (the three most popular sizes of packing boxes), you're basically in the commodity business. You may not know this now, but as competition increases, you soon will.

The answer is to borrow a page from the retailer's playbook. Your goal is one-stop convenience. Stock all the markers, tape, labels, box cutters, and other odds and ends your customer will need once he sees them, not just the boxes he wants. If you don't know what to stock, ask the advice of a company that offers turnkey merchandising programs with displays and layouts (called plan-o-grams) based on sales experience. Though these displays are designed for self-service, with a little employee training, you can find yourself making more money on what customers suddenly need than on what they think they want.

Rule 8:
Provide Super Service vs. Self Service

While a good retail program should be designed to sell itself, there is no substitute for one-on-one selling. When customers enter your retail area and see a comprehensive selection of products on sharp, modern displays, the sale is more than half made. Add to that a greeting by cheerful, well-informed personnel and they may be your customers for life.

One manager I know always keeps a disk, brass and laminated padlock on his mobile cart. He demonstrates the benefits of each lock when he takes customers to their storage units for the first time. He says his success rate in selling locks is about 95 percent. Another manager asks questions so she can recommend retail products. If she learns a customer has a lot of china, she shows boxes to properly pack it. Once the customer is sold on the box, she recommends partition kits and foam pouches. Next, tape and bubble-wrap are easily sold because she now is a trusted advisor. Most of her tenants spend an average of $50 or more on supplies.

One item that usually sells well for facilities are moving kits, which are pre-packed with various sizes of boxes, rolls of bubble-wrap, tape and a marker. One manager created a display with every item in the kit, assembling all the boxes and adding a sign that read, "You can get all of this for only $39.99." As a result, his sales increased threefold.

A professional image is one way to help rent units, and good merchandising is part of that image. It doesn't only increase retail sales, it gives customers confidence in doing business with your organization. Once selfstorage owners understand merchandising is an important piece of the marketing puzzle, they understand it's not just about selling moving supplies.

Getting Started or Getting Better

Self-storage facilities are nontraditional retailers. Your primary enterprise is not the retailing of products, but rather the sale of a serviceunit rentals. The self-storage industry has prospered beyond many owners' wildest dreams. However, for some, this very success has been an obstacle to developing a retail plan that pushes supply sales to an obtainable 5 percent of gross sales. In some cases, the attitude is, "I'm already successful. Why bother with something I really don't understand? I'll just keep doing what I've been doing."

The self-storage industry is going through a transition. As it matures, facilities will encounter changing customer demographics. Some of your best customers are businesspeople, and the college-educated, "soccer mom" is steadily making more of the storage-rental decisions. This means your current or future customers soon will have increased market expectations.

So how do you improve your retail-sales profits? First, as you would with any other business endeavor, take it seriously. Make a plan and follow it through. Second, take advantage of all the professional help available. Choose a supplier who can help you lay out or redesign your retail area, provide you with brand-name products, and help train your employees. After that, the rest is easy.

Roy Katz is president of Supply Side, which distributes packaging as well as moving and storage supplies. The company has developed merchandising programs for many leading companies including Storage USA, the U.S. Postal Service, Kinko's, Mail Boxes Etc. and The UPS Stores. For more information, visit

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