Traditional retailers often wonder how to differentiate themselves from other retailers in order to survive the increase in internet retailing. Whilst internet retail has grown at the expense of traditional retail, people still like to shop.
According to Statista, household consumption in the UK from 2005 to 2017 has increased by 47 percent, with just a small dip in 2009. So, regardless of any economic downturns or the GFC, consumers are still spending money, even if a larger proportion is being purchased online. Take heart, expenditure is on the rise!
Steve Dennis reports in Forbes that traditional retailers experience far less returns than online retailers. That is driving online retailers to open bricks and mortar stores. In the gift and jewellery retail markets, many customers will always want to see what they are buying. In a tourist market, customers enjoy taking the time to shop. And no matter where you fit in retail, if customers are buying gifts of any kind, gift wrapping is a profitable value-added service because you’re saving customers time and money.
Many believe it’s difficult to gift wrap, but almost every retail store will find a team member who is proficient or willing to learn how to do it. YouTube tutorials on gift wrapping are easy to find, and with a bit of practise, almost anybody can become adept at gift wrapping.
So how can you make an extra £2500 profit in the next 12 months?
Let’s first look online at gift wrapping prices, which range from £1.95 to £7.50, depending on the retailer. You want to charge what the market will pay for your type of business and your location. For this example, let’s choose £2.95 as an acceptable charge.
As a guide, the cost of a 50cm square of paper from our regular luxury range is 21p and from our luxury metallic ranges 33p. Add to this a matching gift tag (if required) at 14p, a 3m length of curling ribbon at 2p, and 3 seals at 1p each. That would make the material cost of wrapping an average gift between 58p and 70p. Of course, you don’t have to include the ribbon and tag, which will save time and materials.
You might say, “That doesn’t sound like a lot, but gifts don’t just wrap themselves.”
No, they don’t, but bear in mind the shop has to be staffed whether you gift wrap or not. So you could choose to ignore the labour cost. However, most stores will have an able gift wrapper on the team without even realising it, someone with that hidden talent. If not, as I stated, it’s very easy to learn with the many YouTube tutorials online.
According to the UK website “Payscale,” the average hourly rate for a retail sales assistant is £6.70. To be generous, let’s round this up to include the NI and other employment costs, making it a real cost of about £9.50 per hour. So, how long will it take for a staff member, who is often standing around waiting for customers to come in, to wrap a gift?
According to our trials, you can nicely wrap a gift in less than three minutes. So the time cost to gift wrap based on 20 per hour is £9.50 over 20, which is 47.5p each.
If we add this to the material costs, you’re looking at around £1.05 to £1.20 to wrap a gift, complete with ribbon and gift tag. This is a “Wow!” service for your customer. So, if you charge £2.95, that’s a mark-up of at least 2.5 times the cost.
What sort of space will you need for this?
That depends on your specific product range. Small gift shops will have enough space near the till. To save space and time when busy, you might want an extra table away from the till. Our easy-to-use dispensers can be fitted under the counter or wall mounted.
How do I get started?
For an investment of between £221 - £285, our “Gift Wrap Starter Kit” comes with two rolls of gift-wrap, two rolls of curling ribbon, 150 self-adhesive micro bows, 100 gift tags, and 250 clear seals. If you don’t always use a gift tag or ribbon, there’s enough paper to wrap between 700 and 1,000 presents. And of course, it includes your dispenser that will last for many years.
So, for an investment of £285, you can create a sales value of £2950.
Along with this, you will become the go-to shop for gifts. You will be adding value for your customers, and you will have a few minutes to build a personal relationship with your customer that will encourage them to return.
You may say, “Well, that’s all very good, but how many gifts do I have to wrap to make £2500 profit?”
Let’s start by removing the labour cost. Why? Because you’re paying your team already. We’re just introducing a new service that’s making better use of the team and creating a better customer experience.
Then, let’s assume one in five customers would like their gift wrapped, or an average of about four gifts a day. (Yes, this will vary from shop to shop depending on your customers, but our experience is that four a day is a good number.)
That means if you are open six days a week with an average of four gifts to wrap every day, you’ll have wrapped 1,008 presents in 42 weeks. And there is your £2500!