Posted On: May 4, 2023
Can You Solve the HVAC Distributer Merchandising Labyrinth?
The HVAC distributer model is much like retail grocery chains- no two stores are quite the same. Some are massive superstores while others are simple. Grocery retailers have this down to a science and they understand how their shoppers buy. Like anything there are a few ground rules, but the biggest and most universally accepted rule of grocery shopping is:
Don’t. Go. Hungry.
We are human, and sometimes we wait too long to go to the grocery store to pick up staples only to find ourselves grabbing multiple things we didn't need on our long walk to the back of the store to the milk fridge. This mental war you must fight is no accident. The layout of a store can have a massive impact on purchasing decisions. And more so, it is something we can learn from and should use when we think of our own HVAC distributer branch merchandising and layout. How do your branches compare? Are you gaining as much as you can from your hungry dealers or are you letting them starve?
THE PLAN-O-GRAM CONCEPT
The way a grocery store is laid out isn’t the way that makes it easiest for customers to find what they need. Instead, it places all the household necessities around the perimeter of the store. They know that you are going to keep coming back for milk, bread, and veggies. They do not have to put it at the front of the store to remind you they have it. For you, this might be refrigerant or gauges. It’s already a staple in your customer’s truck.
Impulse Buys: a.k.a. Daily Specials
Instead, the first thing you see when you walk through the door are the specials for the day. Something to get your customer’s stomach rumbling. In your branch this should be the marketing promotions you are running. If you are running NDP (New Dealer Program) or a giveaway, for example, there should be:
• Signage on the door
• An adhesive sticker on the floor
• A banner from the ceiling
• Counter mats, banners, displays, stools, flyers can all be co-oped
Make use of every inch of space to smack customers in the face and get people asking to learn more. What’s the first thing people see when they walk into your branch? If promotions aren’t immediately obvious chances are your customers assume you don’t have any – and they will seek out other distributors that do.
Christmas in July?
The second thing that you see when you walk into a grocery store are the displays of seasonal snacks. They are on the shelves months before anyone actually needs them and they are unavoidable. Think of the Christmas decorations in stores before you even have a chance to get Halloween pumpkins off your stoop.
This should be your new products. If you have a high efficiency MBU (Motor Bearing Unit) you are pushing, you could put a display here. This is something that people might not go out of their way to learn about but if it’s right in front of them their curiosity will likely take over. You want them to feel familiar with it. The more comfortable someone is with something the more likely they are going to buy it when the time is right.
• Have the manual available
• A poster with the features and benefits
• If you have training for this coming up, put flyers to invite people to attend
• No space for a full product display?
Get creative with banners or shelf callouts What new products do you plan to introduce in the next 4 months? Are you giving your customers the opportunity to get a taste for them beforehand?
Hot Dogs & Buns
In the middle of the floor are all the parts and supplies. All of the extras that you want people to pass to get to the essentials that you have placed around the perimeter of the store. This way, as they walk to the refrigerant and gauges in the back of the store, they will pick up the fittings and line set they also need to complete the job. Identify and display products that sell together. Many of you already do this. It’s basically putting the hot dogs and the buns near each other so when you pick up one skew you automatically pick up the other necessary skew. This is a great cross-selling opportunity.
What are the essential items that people come to you for? What high-margin items are sitting in your branch that aren’t moving? How could you rearrange your store and pair SKUs together to get more eyes on undersold products?
Did You Find Everything Okay?
Finally, the checkout. In a grocery store, and hopefully in your branches, the checkout counter is always front and center. This makes it easy for your counter staff to see who is in your store so they can greet them and keep an eye on them to answer questions they may have as they peruse the store.
Normally branches are in an industrial area with lots of competition around. So, arguably the most essential element of a showroom or grocery store is before you even step foot inside. Can your signage clearly be seen from traffic on the road? If not, customers might not notice your branch and find another distributor nearby.
Typically, when we think of these kinds of shopping experiences our mind goes to brick and mortar. We assume that the types of things that people purchase in our stores they want to see and feel before buying. But even in the grocery world we have seen that shift. People are choosing convenience. We can expect customers that choose online delivery to be higher earners that don’t mind paying for delivery to save time. In the HVAC world these are your flagship guys. Their schedule is full, time is tight.
Many distributors have some sort of website. But our industry is typically a laggard with technology which means you still have an opportunity to take advantage of this shift in purchasing behavior. Think of this as a virtual branch – the principles we talked about previously still apply.
• Promotions should be on a banner that’s front and center
• New products should be featured on the home page
• By grouping SKUs people buy together you can cross-sell
• Offer a small discount for purchasing online to encourage people to try it out
• Include a ‘remember my order’ feature to make checkout easy for returning customers.
Make the most of your branch’s virtual and brick & mortar space. You will add to your bottom line, clear out products that probably wouldn’t move otherwise, and have happy (and full) customer carts at the checkout line.