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Tradavo Advice

The 5 Most Painful Mistakes Made by Hotel Retail Managers - Part 5

Posted by Bobby Martyna

Tue, Oct 12, 2010 @ 12:10 PM

Painful Mistake #5 - Buying the Wrong Products and Pricing Incorrectly

Retailing is both an art and a science -- and many hotel  managers have a very good sense of aesthetics from their experience designing and operating hotels.  It's the science part that may be elusive.

The science of retail centers around the planogram -- what products, what sizes and how are they arranged in your market, pantry or gift shop. And how to price them.

Hoteliers may believe they know what their guests like -- indeed they may have told them directly.  But anecdotal information is not reliable and cannot be used comprehensively to determine what products to carry.  Some hotel retail managers buy what they (and their staff) like -- but that's another trap.  While we all have our likes and dislikes, but they are not always the same as the guests' preferences.

Traditional retailers, such as Target, Wal-mart and 7-11 stores rely heavily on data they receive from such analytics companies as IRI and Nielsen in order to determine definitively what will sell.  They do not have data on hotels;  Tradavo has four years worth of data from the 2,000 hotels that have purchased from us.  We know what sells, and what does not, by region, brand and guest profile.  When we create planograms for our customers, we have strong data on what will sell in your specific hotel and market.

Another trap is buying the wrong size items.  Typically, the items that you might be able to buy from your master distributor (if you have a restaurant) or from the Club Store are the wrong size.  For example, guests typically want larger sizes, such as at least a 1.5 oz to 2 oz size bag of salty snacks and a king size candy bar.  Generally speaking, they want nuts and mixes that are between 2 oz and 4 oz.  Carrying the wrong sized item means that the products won't sell, and you will be left with inventory that is out of code.  This is particularly important with Frito-Lay products which have a fairly short shelf life.

Variety is also important -- having five or more choices of chocolate bars almost guarantees that your guest will find the item of their choosing.  When merchandised properly (and we can show you how), it is easy to have just the right assortment of products even within the smallest spaces.

Pricing is also a science.  We know and recommend suggested retail prices (SRPs) for all of our customers based on our comprehensive data.  While many hotel retail managers go to the local Wal-mart or 7-11 to do price checks, and set their prices within the same range, this method leaves money on the table.  While you certainly don't want to overcharge guests, you can build in a premium for the convenience the guests receive by putting the charge on their bill and not having to leave the hotel.  We know where the right price point is for the over 3,000 products we carry.

Put us to work for you!  We don't expect our customers to be retail scientists -- we just ask that you consider our complimentary services and see the real difference in sales, profitability and guest satisfaction.

By the way, if you do have regular guests with special requests, it is reasonable to buy the products and set them aside for their arrival, rather than merchandise them in the market, taking up a slot for a product that may sell more generally.

courtyard bistro

As always, I would be happy to hear from you -- let us know how we can help.  And any feedback is also greatly appreciated.

Bobby Martyna
President and CEO
Tradavo, Inc
bmartyna@tradavo.com
@bmartyna

Topics: hotel pantry, hotel supplier, wholesale snack distributor, Bobby Martyna, Tradavo CEO, wholesale products, retail advice, planogram, club store, retail science