Merchandising – display your products
How important is merchandising for the store?
Good-quality merchandising in a shop is the store’s first hand card and one of the most important areas of interest for most retailers. Care for properly conducted merchandising not only directly increases sales – and hence – profits, but also the perception of the store in the eyes of customers. It also has other major advantages for retailers – it helps to optimize the facility’s operational management indicators and helps to significantly to reduce the costs. So if you are actively looking for ways to increase profits in your store, effective merchandising will be the first thing to look at.
Correctly arranging shelves as sales growth factor
Best retailers in the market start their day with completing the range of the products, organising additional promotional places, building new exhibitions and preparing marketing messages for potential customers. The store’s merchandising prepared in this way encourages customers to shop and proves the professionalism of the retailers.
As customers, while choosing the store, we pay attention to several of the most important factors for us – location (is it in the area where we live) prices, quality of products but also ease of finding them and how we feel while we are shopping. Our comfort is mainly influenced by how easy it is for us to find goods, cleanliness of the place, filled shelves and aesthetically arranged products.
The key is to arrange the products logically – arranging them in accordance with the purchase decisions allows customers to easily find products and thus – saves their time. Over time, they associate our store with a place where they can shop efficiently, quickly and without any problem – they are not irritated by looking for products in between the shelves. This allows customers to return to our facility more often.
All products on the shelves should be arranged deep into the edges, not thinned and possibly at even intervals. Key product groups for a given store should be placed in the most visible places, with easier access for buyers and additional communication using POS materials.
Cost and loss reduction
The best retailers pay attention to the importance of working on the quality of the product range. What matters is that the products are not dirty, dusty or damaged and that their shelf life is long enough. When placing products on shelves, always follow the FIFO (First in First out) principle, i.e. make sure products with shorter expiration date are moved in front of those with longer expiration date. This will avoid losses caused by products going out of date. The key is also to eliminate product shortages, in particular on the best selling products. Lack of the desired product in the store causes in about a third of cases to give up shopping completely and the customer making a decision to look for a product in another shop. To avoid this, retailers maintain a safe stock, i.e. a stock that means the number of pieces of a given product sufficient to cover sales between planned deliveries.
Merchandising is also constructible planning of the volume of sales space for individual products in such a way that on the one hand not to build cash-free stocks in the shelf, and on the other hand to protect against potential product shortages. Good layout of the shelf space also reduces the involvement of store staff in completing the range on the shelf, reducing this way staff costs.
Increase in sales and profits
It is worth remembering that customers make about 70% of shopping decisions in the store – and as retailers we have a significant chance to influence their decisions. In addition, while choosing products, customers are able to look only at particular part of the shelf – the so-called “Range zone” or space at a height of approximately from the knees to the shoulders of the average person, causing potential customers to choose mostly products that they can see right away. Clients also have a limited perception of stimuli that they are able to pick up on – they tend to focus on known shapes and colours or larger colour “spots” on the shelf, which is why their eyes will be attracted by additional promotional places or exhibitions.
Therefore, good merchandising focuses on proper display of products on the shelves and in the space of the store. Very often, retailers place products that are more expensive or more profitable in the “coverage area”. Thanks to this, customers choose between products on which retailers can make more money.
So if our aim is to increase sales of value and profit, then we should focus on increased exposure to more expensive products / products with greater margins.
Consumer research has shown that increasing the shelf exposure from one “facing” (the front of the product packaging visible on the shelf to the buyer) to two – significantly increases sales, in particular of brands with lower market shares.
Effective merchandising is also the ability to create an additional shopping impulse – that is, persuading the customer to choose and buy unplanned products. In order to achieve this retailers very often look for cross-merchandising solutions for complementary categories by placing products from these categories next to each other. Combined displays are a very good idea – bread next to chocolate jam / creams, coffee next to cookies, beer next to snacks.
Good-quality merchandising is and will certainly remain one of the most important areas of store operations, and those who understand its importance and are able to use it in everyday practice will cope better with the challenges of a very competitive retail market.