Hardware Retailing The Industry's Source for Insights and Information
In the North American Hardware and Paint Association’s (NHPA) educational curriculum, students are taught the basics of the retail sales equation, which states there are only four ways to generate sales for a home improvement retail stores: Increase average transaction amount, increase prices, increase closure/conversion rate and increase customer count. To learn more about these four way to generate sales, ways to increase your closure rate with proper merchandising and the ways merchandising drives sales, dive into NHPA’s 2025 Merchandising for Profit Study.
Increase Average Transaction Amount
One way to do this is by having well-trained staff members who can effectively sell additional merchandise to these customers, which requires training in product and project knowledge. The other way is through your store’s merchandising efforts, which highlights products they didn’t intent to purchase (impulse merchandise), as well as additional project-related items they were reminded of through proper merchandising adjacencies and your store’s promotional merchandising system.
Increase Prices
While probably the easiest way to increase revenue, it can come at the greatest cost for independents who historically have battled a high-price image among customers compared to the big boxes and online retailers.
Increase Closure (or Conversion) Rate
Of all the people who visit your store, how many make a purchase? If 7 out of 10 people who come in your store make a purchase, this equates to a 70% closure rate. A key goal for any retailer should be to increase this percentage. This is key because the remaining 3 out of 10 people are already in your store and are ready to make a purchase—if you have what they need and if they can find it. It’s where proper merchandising can help, because its far easier to sell something to people who have already made the trip to your store than it is to attract new shoppers through marketing initiatives.
Increase Customer Count
Getting more people to come into your store will, in turn, lead to more transactions. But it takes a marketing strategy and proper execution to attract more people into your store, either through existing shoppers making additional trips to your store or drawing in new customers. It can be expensive, time consuming and difficult to verify effectiveness.
