Retail Merchandise Consulting: What We’ve Learned from our Clients

It’s hard to believe it has almost been one year since JGL started offering retail merchandise consulting services! With our dedicated Senior Retail Consultant, John Franzini, we have worked with both past and new clients spanning the museum, zoo, and aquarium worlds. We knew that our experience with food and beverage consulting would be beneficial for the retail side, but the similarities between both segments have been fascinating to explore. For example, some institutions work with third party contractors and others self-operate but maximizing earned income is the common theme for most institutions. Additionally, there is a great desire to utilize all earned income opportunities as a vehicle to lengthen stay and deepen visitor engagement.

These days, JGL is not only looking at café sales and attendance numbers, but we are also checking that stocked apparel includes all sizes and not just smalls and extra larges; we ask if the operator uses a central or local purchasing structure; and we advise on what the proper standard markup should be.

Incorporating this new business segment into our existing operations has been incredibly exciting, and while we love advising our clients on best practices, as our business grows, we learn more! We wanted to take this opportunity to share some new ideas that we have found valuable since we began our journey in retail consulting…

  1. One Operator for Two Categories!

Over the past several years, we’ve seen several operators move into both F&B and retail merchandise. Many of our clients have been very enthusiastic about this new opportunity, and it’s easy to see why. In terms of contract operations, economy of scale is crucially important to financial performance. When F&B and retail are bundled together under one operator, we typically see higher investment offers and higher commission percentages. The potential of an F&B and retail account from an operator’s perspective is very attractive; they can better share product cost, labor cost, and operating expenses and can create a single cohesive experience across both operations. From the client’s perspective, the higher investment offers, and commission percentages are a no-brainer when comparing a combined bid against an F&B-only or retail-only bid. We know that many operators are increasingly looking into offering these combined services and expect this trend to increase in the coming years.

  1. Opportunities to Cross Promote

Along a similar vein, we’ve heard a desire among our clients to integrate their F&B and retail merchandise operations in new and exciting ways. At their core, F&B and retail have many commonalities from the visitor’s perspective that can increase per caps at both operations. Let’s take a destination restaurant at a museum, for example. Why not sell a cookbook highlighting the restaurant’s menu in the gift shop or signature pre-blended spices? Similarly, if an individual purchases a coffee mug in the gift shop, why not offer a free coffee in the café? For corporate catered events, you can offer a branded Yeti mug to event guests as a part of the overall package or offer to keep the gift shop open during the event. There are numerous ways to integrate F&B and retail, and we are seeing our clients move in this direction.

  1. Combined F&B and Retail for Smaller Institutions

Industry wisdom for several decades stipulated that an F&B outlet within a cultural institution wasn’t financially sustainable for smaller museums these institutions had to forgo F&B or face the prospect of a management fee agreement. JGL loves to offer novel ideas to our clients, like the combined F&B/retail outlet model. Imagine the two operations in a holistic manner where retail and F&B would share a common space, identity, and mission. We’ve also seen several operators come out with similar concepts, touting their ability to increase sales and reduce overhead expenses. We’re incredibly excited about the opportunities this model presents, especially for smaller institutions that have struggled to find operators in the past.

There are no one-size-fits-all solutions for our cultural clients. Each operation is different and needs a unique, customized approach to help achieve financial and mission-based goals. JGL is very proud to be able to offer these multi-level, creative solutions for a wide variety of clients.

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