It isn’t all fun and games for tourism-based retailers. Despite the fact that the World Travel and Tourism Council reports that tourism brought in $8.8 trillion and 319 million jobs to the global economy, there is one glaring disadvantage to being a tourism-based retailer: Your customers are usually only in town for a few days.
Because of this, tourism-based retailers aren’t able to build up a regular clientele in the same way as other businesses—which is why it’s especially important for retailers who rely on tourism to know how to master their vertical and how to attract customers in unconventional ways.
Here’s how souvenir shop businesses can knock their sales goals out of the park to become a must-visit destination for tourists and locals alike.
Use those margin-builders
What is a “margin-builder,” you may ask? “Margin” refers to a profit margin, which is the difference between the wholesale price retailers pay for a product, and the price that product is sold for in stores.
Margins are always expressed in a percentage, and retailers tend to have lower profit margins than other industries, but it all depends on the store and sector. The average retail profit margin falls somewhere between .05 percent and 3.5 percent. Certain products are “margin-builders,” however, which means they can be bought wholesale for a low price and resold for significantly more.
Retailers walk a fine line: If the whole store is full of margin-builders, customers may consider it too basic, or not worth the price. But, if the store doesn’t have any margin-builders, it can be tough to turn a profit on low-margin goods.
Customized printed cups, magnets, shot glasses, and lip balm are some examples of popular margin-builders for souvenir shops—they can be purchased bulk at low price-points and sold for more to help retailers afford to keep prices reasonable on other products, such as artisan-made goods.
Sell work by local artisans
The global artisan movement currently generates $34 billion dollars a year and consumer demand for artisan-made products is consistently on the rise. While souvenir shops can definitely benefit from sourcing artisan-made goods from around the world, tourism-based retailers have a unique opportunity to give customers a taste of the local flavor by sourcing products from artisans within their communities.
Artisan-made goods are usually lower margin products, but they are also the products that can help a store stand out from the competition. Artisans are always looking for regular work, so retailers can sometimes negotiate better wholesale pricing by signing up for a certain amount of goods monthly.
There’s something special about artisan-made goods—they can’t be replicated, and they give tourists a way to bring a piece of the local flavor home forever.
Jewelry is a standout category for artisan-made goods, as is cosmetics (think lotions, bath salts, soaps, perfumes, beard oils, and so on). Clothing is another top-selling category, especially when that clothing has a local slogan, such as “Use Your Midwestern Manners,” or a custom-designed graphic that’s unique to the area.
Buff up your curb appeal
No one wants to go to a souvenir shop that looks like a DMV.
Tourists are all about a good time, and one of the best ways for retailers to get customers in-store is by giving them a taste of the action when they drive by. I’m talking murals on the building, bright colors, unique sculptures, and creative signage that suits the brand. Consumers want the souvenir shops they visit to be Instagrammable, so retailers can give them a reason to stop in by making their building stand out from the rest in a dramatic way.
Outdoor murals create selfie opportunities with the retailer’s hashtag. After all, who doesn’t know someone who has taken a picture standing between graffiti angel wings? Immersive in-store displays are another must-have for tourism-based businesses looking to gain notoriety and social media traction. When a souvenir shop becomes a quirky tourist destination, it becomes much easier to build an online community around the brand. Steady foot traffic and regular sales will follow.
Give them something to drink
Guess what the top-selling product is at airport retailers? You guessed it—it’s water.
When customers are on the move, it’s easy to run out of the fundamentals. Not only is water (and sugary beverages) a great margin-builder, but it stands to reason that water—like a pleasant and climate-controlled shopping environment—can help tourism-based retailers keep customers in-store.
What’s interesting is that often it will seem like a retailer has thought of everything: great inventory variety, selfie stations galore, beautiful store, but if they miss out on the fundamental basics, customers will be running out of their store for a Starbucks faster than you can say, “did that group leave already?”
Tourism-based retailers in warm areas should consider carrying Gatorade, or a similar electrolyte booster, for customers who haven’t yet adjusted to the climate. If it’s cold outside, some free tea can go a long way in prolonging customers’ shopping experience. It all comes down to going the extra mile to create comfort and to make your visitors’ shopping journey a success.
Offer something for every budget
Contrary to popular belief, travelers’ budgets are just as varied as that of the average customer. While everyone likes to bring home a keepsake or trinket, it is important for retailers to offer a wide variety of price-points to ensure that even those without a lot of money to burn spend at least a little money in their stores.
To provide low prices on items customers actually want to buy, souvenir shop owners need to save where they can on operational costs like payment processing. Credit card owners spend up to 18 percent more than shoppers using cash, so shop owners can’t afford not to accept as many payment methods as possible. Identifying and eliminating hidden costs on their payment processing statements, however, can help retailers keep prices down.
Successful souvenir shops offer unique merchandise and an exciting shopping experience for a wide variety of customers. To benefit from the growing tourism economy, tourism-based retailers need to be as focused on creating a one-of-a-kind experience for customers as they are on sourcing inventory—and to do this successfully takes creativity and a willingness to stand out from the pack.