Product ranging, the price elevator and wine!

Are you in control of you product ranging ? Do you have a price elevator in store? You should!

How much does a bottle of wine cost? How about a glove or a pair of shoes? I am sure that you all have some opinions on this but do you know what your customers think?

I am an advocate of good ranging and with that comes a price elevator. You need a range of products that offer defined benefits and increase in value – this helps increase pricing. If you want to increase turnover, when footfall remains the same, you need to get your customers to spend more. Introducing them to more expensive items that offer more value at higher prices is a good thing.

Too often I go in to shops and they have not properly considered their range of products with too many products on offer at similar price points.

This confuses the customer – why should I buy A over B? What are the benefits of spending more money? Why does this cost more than that? Often the retailers can’t answer this question – this is bad!

But why is this the case ?  Simple – they haven’t thought about their order and have succumbed to buying the latest products from the sales reps.

If you don’t know what price you are going to sell the product for and what it offers compared to the other products – don’t buy it. If you are going to buy a product to sell and you already stock or have ordered another product at the same price don’t buy it. You need to have a clear rational as to why your customers is going to choose one item over another. Just because it is a different brand is not a good enough reason.

Two poor performing golf categories at the moment are shoes and gloves. Shoes is delivering poor margin and stock turn. Gloves has terrible stock turn. The reason for this – in most cases – poor ranging! Looking deeper in to the problem and there are usually too many items that are too similar at the same price points – with no product differentiation. Another issue is poor sizing – but that’s a topic for another day.  All retailers need to consider what price points they are selling at, what those price points are going to deliver and what benefits each of those products give to the consumer to justify their price.

Ranging happens all the time however some retailers are better than others. A couple of months ago I was in Australia. On my way to a friends for dinner I stopped off at the “bottle’o”- Aussie for off license to get some wine for a gift. I went in looking for what I thought was a reasonable bottle of wine – in my book that is usually something around the £10 range or $18 in Aussie terms. While looking at the options I was intrigued by the stores use of ranging to get me to spend more.

While looking for my $18 bottle I browsed lots of displays. Finally I found some $18 bottles on the bottom shelf – oh I thought do they only consider that to be the good stuff?? As the cheaper stuff is usually in the tertiary display area – the bottom of the shelves. Looking up the display the next shelf had the better wines but these were at $200+  a bottle. Finally on the top shelf (eye line – prime merchandising space – good work!) were the best wines at a staggering $1000 to $2000. I nearly fell over – I don’t think I have every seen wine in a shop costing over £1000 – and with no security tags! I have to say that I was very glad that I hadn’t had any wine before I was making my selection – and just picked up a bottle! At that price I wouldn’t even want to look at it!


While this pricing strategy didn’t make me buy a $200 or even $1000 dollar bottle of wine it did make me think. Perhaps $18 isn’t enough. So I ended up spending $35 with the impression that my cheaper bottle might not have been good enough for dinner in Australia. There was me thinking they just drank beer!

Now some might think me a sucker but I have to say that I did appreciate the shops efforts. Merchandising is a science and there are some rules that can help optimise turnover and profit. Good, better and best ranging should be applied to categories to give customers options and the retailer a chance to sell more expensive items. You can’t always tell what a consumer thinks is expensive. My initial plan to spend $18 on a bottle of wine was scuppered by good merchandising. I made the choice to spend more when I was given the impression that wine could be an awful lot more expensive. I didn’t want to buy the cheap stuff. I was given the impression that the more expensive stuff was better – as it was more expensive. I didn’t want to spend $200 or $1000 but having made that mental note that $18 might not be good enough I was happy to spend $35. I didn’t come out of the shop thinking it was expensive. I just came out thinking that wine could be expensive. The retailer had made me spend nearly 100% more than I had planned through good merchandising. The wine tasted good as well.

Just one other thought. I am sitting on a plane writing this article. I have just experienced another great example of ranging on the plane. I am sitting in the better seats. I paid a bit more for some more leg room – so I could type this article. In front of me are the best seats – they have more leg room and you get some other benefits. To make this point clear to all customers that walk past these seats to the way to their own cheaper seats at the back, the airline has highlighted them with a prominent sign.


Ranging is all around us – make sure you make the most of it to help you increase your sales.

One thought on “Product ranging, the price elevator and wine!

  1. retailtribe

    Phil excellent post. Love it. Gloves are tragic. I identified for Foremost Golf 8 years ago (using your data) that their Professionals had a serious cash challenge in this category. A category that ought to have a stock turn of greater than 6, which should be creating positive cash flow, was at stock turns ranging between 0.8 and 2.5 (with no one higher). Using Jon Shimmons (then Ashley Wood) we showed how this could comfortably be above 6 (he got to 10) WITH increased sales. Unfortunately the potential impact on brand relationships caused the management of Foremost Golf to avoid that one. And so here we are again. Pro’s with low stock turns and negative cash flow.
    Your pricing component – is actually a well exploited retail technique called Price Anchoring and is highly relevant to the marketing of shoes for the Professionals. Price anchoring sets out to ‘fool’ the neocortex by realigning the consumer from ‘absolute price comparison’ to ‘relative pricing’. That (relative visual price comparison), by the way, is the natural process for the brain. In a women’s shoe boutique they present the most outrageously priced shoes under lights to attract the customer to first. The price shock is immediate, but every other shoe after that seems relatively inexpensive. In the ‘shoe bars’ I see, the emphasis is on stock pressure and low-price. The first and most visible shoes are the OFFERS. After those every other shoe seems relatively expensive.


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