Areas of Influence
Allocating merchandise space based on sales by square foot can greatly expand your revenue centers.
By Joe Dinoffer
Successful retailing is more systematic and analytical than ever. For those of us in the tennis industry, it only makes sense to learn valuable lessons from the large and financially robust retailers.
One of the concepts these retailers employ is to allocate merchandise space and analyze the subsequent profits by the square foot. They calculate available shelf space and painstakingly set up software systems that measure sales on each shelf and on each portion of each of those shelves.
In a tennis pro shop or specialty store, we can apply this same scientific approach without that same level of painstaking detail that some of the larger chain stores utilize. However, even this more simple approach can have the same profound effects. Here’s an example:
Your pro shop floor space measures 28 by 38 feet, so you have 1,064 square feet in available floor space. Your counter area is 8 feet long and 8 feet deep, totaling 64 square feet. This leaves 1,000 square feet for retail display that can generate sales income and profit.
After measuring your shop, you need to make a list of your general categories of merchandise and space utilization. Here’s an example to get you started:
Next, make a rough drawing of your pro shop and convert the 1,000-square-foot shop into 10 100-square-foot rectangles. Now, simply write-in each of the above categories.
By now you’ve noticed that in this example, we have 10 space areas and eight categories. This is where you expand the space for the more profitable categories and shrink the space for the products with lower sales volume and profitability.
In this simple example, let’s say you do a big business in women’s tenniswear, and not so much in racquet stringing. You’ll want to expand the women’s clothing category into two-and-a-half squares and shrink your strings and grips to half a section. Then, maybe you allocate one-and-a-half squares for your racquets and the same for your men’s clothing section. For this example, the space allocation for your shop might look something like the diagram at left.
The main point is to carefully categorize your sales by the product groups such as those we have listed. Then, evaluate the percentage of your total sales that each of those categories generates. For instance, you may do a huge stringing and customizing business, so you’ll then want to give that area much more space.
Now, you’ll have a much clearer picture of how much floor space to allocate for each category.
- Racquet stringing
- Racquet displays
- Men’s clothing
- Women’s clothing
- Tennis shoes
- Tennis strings and grips
- Accessories including hats, wristbands, etc.
- Gifts including everything from jewelry and racquet bags
See all articles by Joe Dinoffer
About the Author
Joe Dinoffer is a Master Professional for both the PTR and USPTA. He speaks frequently at national and international tennis teacher workshops as a member of both the HEAD Penn and Reebok National Speaker's Bureaus. He is president of Oncourt Offcourt Inc. and has written 16 books and produced more than 30 instructional videos.