To open a shop is easy, to keep it open is an art, according to a Chinese proverb.
While this is true for all retailers, it is especially true in museums; they may have a captive audience, but converting footfall into sales is not guaranteed.
It is essential that any retail offer is tailored specifically to the venue it resides in and the visitors it attracts.
But best practice from established museum shops, larger venues with multi-retails offerings and the wider retail sector can offer guidance on how to successfully manage a shop.
1. Turnover/profit
It is impossible to run a successful shop of any kind without knowing if you are making a profit. In the past too much emphasis was placed on sales or turnover but that does not indicate how much money a shop is actually generating.
Retail Toolbox, a resource produced by Museum Development North West to help venue’s maximise the potential of their retail offer, advises the easiest way to monitor performance is by creating a balance sheet.
This is simply a record of the sales minus costs. Simply note down the shop’s total sales then take away the value of stock bought at cost price, staff costs, running costs, and any discounts. Only include costs that are directly attributable to the shop. The figure left is money the shop has made.
2. Stock management
There are two key points made repeatedly on stock management – do not buy too much and always keep a record of what you still have and what you have sold.
Overstocking has historically been one of the biggest problems for museums, says Jill Fenwick, the managing director of the Association for Cultural Enterprises (ACE): “Museums often fall in the trap of buying too much but less is more. What isn’t selling is tying up your money.”
Suppliers may offer cheaper price for larger quantities, but Mary Ann Irbins, a commercial development consultant at Gain Retail Solutions, advises buying low volumes and testing products on your customers.
“React quickly to what you learn and never run out of your best sellers,” she adds.
An electronic point of sale system (Epos) is the simplest way to keep track of stock data, but shops that do not have one can collect and monitor data manually. It is crucial this data is reviewed on a regular basis.
“An Excel spread sheet is better than nothing,” says Selina Fellows, a retail and marketing consultant. “There are a number of really good online training courses in Excel if no one in the shop has experience of using it.”
A spread sheet should include:
Add a new column each time a new order is received.
Museum Development North West also advises taking the time to look at the spend per visitor (SPV) and average transaction value so shops can look for seasonal patterns and consider ways to increase the value of purchases.
Retail and marketing consultant Fellows suggest looking at it on a monthly, quarterly and six monthly basis to see where profits are coming from, which products are selling and, crucially, which ones are not.
3. Suppliers
Trade fairs, other museum shops and online are cited as the best ways to find suppliers and see the new trends that are coming down the line. It is worth noting that museum shop peers are always happy to share their knowledge, says Ginny Leadley, the retail buying and merchandising officer for York Museums Trust.
Once you have found a supplier you want to work with, know how much you want to pay and stick to it.
“Always negotiate, suppliers will expect it,” Leadley adds.
It is important to be mindful of the retail price you will need to charge to make a profit. According to ACE’s Fenwick, the industry standard mark-up is 2.4 times the cost price, so that will need to be factored in.
Suppliers can also be a great source of information and will often be able to offer guidance on the recommended retail price.
“Don’t be afraid to ask for advice,” says Irbins from Gain Retail Solutions. “Open the lines of communication to build trust. The good suppliers don’t want one-off sales.”
4. Staff management
Keep staff to a minimum, advises Fenwick: “Have a look at your till read-out and see where your peaks are in the day. Then staff accordingly.”
Jonathan Curzon, the retail and catering operations manager at the Victoria and Albert Museum in London, suggests factoring in visitor numbers and looking at how many transactions are carried out weekly, monthly and over the peak times in the shop.
“There are only so many transactions one person can carry out,” he explains.
5. Setting targets
It is essential to set realistic targets for if the shop is to contribute to the museum overall. These can also be used as motivational tools for staff.
Museum Development Northwest’s Retail Toolbox advises talking to peers in other museums to compare your SPV, which every shop should aim to increase year on year.
Small to medium museums should set monthly or quarterly targets. A basic guide would be to look at your visitor numbers, SPV and profit margin.
For example, if you have 10,000 annual visitors who each spend £1 that would generate a turnover of £10,000. If profit margins are around 50% then profit would be £5,000. Targets can then be set accordingly.
Knowing your vital statistics and adapting to what the figures are telling you is the key to success in all retail, not just the museum sector.
ACE’s Fenwick says: “There isn’t any reason why anyone can’t run a good museum shop if they get the numbers right.”
While this is true for all retailers, it is especially true in museums; they may have a captive audience, but converting footfall into sales is not guaranteed.
It is essential that any retail offer is tailored specifically to the venue it resides in and the visitors it attracts.
But best practice from established museum shops, larger venues with multi-retails offerings and the wider retail sector can offer guidance on how to successfully manage a shop.
1. Turnover/profit
It is impossible to run a successful shop of any kind without knowing if you are making a profit. In the past too much emphasis was placed on sales or turnover but that does not indicate how much money a shop is actually generating.
Retail Toolbox, a resource produced by Museum Development North West to help venue’s maximise the potential of their retail offer, advises the easiest way to monitor performance is by creating a balance sheet.
This is simply a record of the sales minus costs. Simply note down the shop’s total sales then take away the value of stock bought at cost price, staff costs, running costs, and any discounts. Only include costs that are directly attributable to the shop. The figure left is money the shop has made.
2. Stock management
There are two key points made repeatedly on stock management – do not buy too much and always keep a record of what you still have and what you have sold.
Overstocking has historically been one of the biggest problems for museums, says Jill Fenwick, the managing director of the Association for Cultural Enterprises (ACE): “Museums often fall in the trap of buying too much but less is more. What isn’t selling is tying up your money.”
Suppliers may offer cheaper price for larger quantities, but Mary Ann Irbins, a commercial development consultant at Gain Retail Solutions, advises buying low volumes and testing products on your customers.
“React quickly to what you learn and never run out of your best sellers,” she adds.
An electronic point of sale system (Epos) is the simplest way to keep track of stock data, but shops that do not have one can collect and monitor data manually. It is crucial this data is reviewed on a regular basis.
“An Excel spread sheet is better than nothing,” says Selina Fellows, a retail and marketing consultant. “There are a number of really good online training courses in Excel if no one in the shop has experience of using it.”
A spread sheet should include:
- Every product you are selling – how many have you got?
- The cost price.
- The selling price.
- Supplier details.
- Expected margin.
Add a new column each time a new order is received.
Museum Development North West also advises taking the time to look at the spend per visitor (SPV) and average transaction value so shops can look for seasonal patterns and consider ways to increase the value of purchases.
Retail and marketing consultant Fellows suggest looking at it on a monthly, quarterly and six monthly basis to see where profits are coming from, which products are selling and, crucially, which ones are not.
3. Suppliers
Trade fairs, other museum shops and online are cited as the best ways to find suppliers and see the new trends that are coming down the line. It is worth noting that museum shop peers are always happy to share their knowledge, says Ginny Leadley, the retail buying and merchandising officer for York Museums Trust.
Once you have found a supplier you want to work with, know how much you want to pay and stick to it.
“Always negotiate, suppliers will expect it,” Leadley adds.
It is important to be mindful of the retail price you will need to charge to make a profit. According to ACE’s Fenwick, the industry standard mark-up is 2.4 times the cost price, so that will need to be factored in.
Suppliers can also be a great source of information and will often be able to offer guidance on the recommended retail price.
“Don’t be afraid to ask for advice,” says Irbins from Gain Retail Solutions. “Open the lines of communication to build trust. The good suppliers don’t want one-off sales.”
4. Staff management
Keep staff to a minimum, advises Fenwick: “Have a look at your till read-out and see where your peaks are in the day. Then staff accordingly.”
Jonathan Curzon, the retail and catering operations manager at the Victoria and Albert Museum in London, suggests factoring in visitor numbers and looking at how many transactions are carried out weekly, monthly and over the peak times in the shop.
“There are only so many transactions one person can carry out,” he explains.
5. Setting targets
It is essential to set realistic targets for if the shop is to contribute to the museum overall. These can also be used as motivational tools for staff.
Museum Development Northwest’s Retail Toolbox advises talking to peers in other museums to compare your SPV, which every shop should aim to increase year on year.
Small to medium museums should set monthly or quarterly targets. A basic guide would be to look at your visitor numbers, SPV and profit margin.
For example, if you have 10,000 annual visitors who each spend £1 that would generate a turnover of £10,000. If profit margins are around 50% then profit would be £5,000. Targets can then be set accordingly.
Knowing your vital statistics and adapting to what the figures are telling you is the key to success in all retail, not just the museum sector.
ACE’s Fenwick says: “There isn’t any reason why anyone can’t run a good museum shop if they get the numbers right.”