Why is merchandising effective

Why is merchandising effective?

Merchandising is so effective as it directly, and indirectly, increases sales!

Stock is generally a retailers biggest cost and primarily the most important financial asset to a business. A business needs the sale of this stock, and to make sales, it needs visitors to store and their products and services to be visible and displayed in an appealing manner.

Merchandising Directly Increases Sales

This is where effective merchandising has a significant impact – having the product on display is essential and half-filled or empty shelves also may suggest your store lacks good management!

Packaging and display tools, alongside good merchandising, will involve the proper arrangement of aisles, display fixtures, shelves and the entire layout of the retail space. Efficient space management through planograms and merchandising creates usable space that accommodates more people and makes the whole shopping process a pleasant experience – organising it for customers to easily scan the entire fixture. Proper item placement can be the difference between success or failure for any brand, item and even retailer.

Why is merchandising effective

Upselling – influencing a customer to buy a premium version of the product they are interested in and  cross-selling – selling items that go well together, but may be from different departments and encouraging impulse purchases – are more likely to occur if the merchandising is effective. For example, placing a hot spot guides shopper browsing and encourages impulse buying or putting your less-frequently visited cold spots to work by using them for clearance, loss leaders and basic commodities or arranging fixtures of different heights and types make merchandise more interesting and entice a shopper’s eye to travel and can also lead customers off the main aisle and into departments for a closer look.

Merchandising is ultimately making sure products are in the right place, at the right time, in the right quantity and at the right price so the customer can buy them!

Merchandising Indirectly Increases Sales

The indirect benefits of merchandising include building brand loyalty and space management.

It is obvious that clean, new offerings and clearly marked aisles and departments and a convenient experience, helps with the customer journey – no customer should have to look too hard to find what they need. But an appealing retail environment through effective merchandising throughout a store, creates an inviting atmosphere that leads shoppers to buy, means customers are more likely to return. Offering fresh product arrangements in appealing displays entices shoppers to return frequently, building long-term loyal customer relationships and multiple long term purchases.

Why is merchandising effective

You don’t just have to take my word for it either – you can monitor the effectiveness of merchandising in many ways –  by checking baseline sales of products, comparing them once a new sales program in in place – as the proof is in the sales numbers. Or you can compare visitors in each retail location before or after implementing a new merchandising programme. Analysing SKUs can also help determine whether or not the layout of your new planogram is driving more sales – as more SKUs are being sold as were before.

 

At eXPD8 in our analytics department we are always keen to calculate ROI of your retail merchandising program. By monitoring the effectiveness of the program from day one, you can make modifications to ensure success over the long term. Our Analytics department could also use all of this data to be able to target your merchandising more effectively – for example, being able to pinpoint stores which need more attention or those whose sales increase more after a merchandising visit.

Could we help you make your merchandising more effective? Get in contact for more information!

Debbie Weids 

Client Account Handler

 

eXPD8
eXPD8