This blog is about giving you some insight into why merchandising is important and how to improve yours.
It's about how effective merchandising can increase the number of customers you get. It's also about how merchandising will improve sales, and drive up profitability.
Merchandising is a HUGE subject underpinned by many years of research into consumer behaviour. There's no way this blog could go through it all, end-to-end, but what it can do is give you a heads-up on the essentials.
Key to recognise is that, just like store layout, it's not an exact science; you're going to have to try ideas out, be prepared to change things regularly and take criticism. But, ultimately, if you do take heed of the advice, you will see the sales effectiveness of your store improve.
Merchandising 101
Merchandising is "…the planning and promotion of sales by presenting a product to the right market at the proper time…using attractive displays". Perhaps more simply, "the display of products in a retail environment"? Either way, merchandising is how you display and what you display. And that can make a huge difference to your sales.
At ground level, merchandising offers you the opportunity to be creative and show off the products you've decided to buy with your hard-won cash. It's about how you have carefully thought about your customers' needs and made insightful selections about what you've chosen to stock. In other words, how well you merchandise directly correlates with how much your customers think you care about them. And you do care about them…don't you?!
Pile it high, sell it cheap?
Effective merchandising is all about thinking like the customer. You need to understand new trends, be aware of new products, be aware of upcoming trends and products, and so on.
Crucially, you need to display those products and all that advice in a way that at the very least conforms to what your customers expect and, at best, completely "wows" them. Ask yourself, given what you sell and do, should you try to be the Aldi or Lidl of the IT world? No, I don't think so, either.
Showing off your products means that, done in the right way and with confidence, this can be achieved with the minimum of stock: use eye-catching packaging and information to draw the customer in.
Help me! I don't get ‘computers'!
To the average person, what you sell is complicated and mysterious. So, help them out.
Everything you do to promote products and services in your store needs to take away this anxiety.
Sure, you have loads of gamers and like-minded techies as customers but if you merchandise to them, you'll alienate everyone else.
Merchandise for Joe Average and you'll give the others something to talk about.
1. Invest in your window
Even before a potential customer sets foot inside your shop, the "wowing" should start; the ‘black-art' of window-dressing is based on one thing – regular change.
The same products piled on top of each other week-after-week will make people think you don't have much stock (which means you don't sell much, which means something must be wrong!). Use your shop window as a portal into an exciting, welcoming world that tempts people in.
Don't clutter it up so you can't see inside; having fewer actual products will mean a) those products/ services displayed will stand out more b) people can see in without fear of something lurking around the corner and c) it will let more light into your shop. Many stores opt for minimal products in the window, favouring strips of posters (you can print these yourself too!) on hangers that can be moved around and changed cheaply and easily.
Oh, and make sure the windows are clean! 2. Get out the duster
The appearance of your store speaks volumes. No one wants to pick up a box covered in dust and it's even less likely that you'll want to buy it. Regular cleaning and dusting is essential and should be a part of the store's daily routine. All displays should be cleaned and straightened up to keep that fresh appearance – as far as customers are concerned, if the shop's the place to be, dust shouldn't have the chance to settle.
3. Aisle ends, the silent salespeople
Aisles channel people around your store and aisle ends attract the highest footfall as people negotiate them. They are a great place to put those goods and services you want to promote. Aisle ends, or end-ons, should be changed regularly and, because they won't necessarily require shelving, can be used to promote lower-value, stackable items like boxes of DVD-Rs.
If you have several aisle ends, try different ideas out to see what works, for example: Aisle end 1, pyramid of DVD-Rs; Aisle end 2, staff recommendations (with reviews); Aisle end 3, themed – mobile phone accessories.
4. Give products the space they deserve
Cram stuff in and you'll devalue it; you make it difficult to see, you'll make it unattractive.
If you've chosen to stock something, don't show it off half-heartedly, do it like you care.
5. Kill the black rectangle
Use monitors to their potential – rather than hide them at the back, get them in the window to display your Twitter/Facebook feed (don't forget, informing people will show you as the expert), offers and products. A simple PowerPoint presentation can tell people about the services you offer in a concise and informative way, will add colour to your shop and can be changed and modified easily. And it will show off the monitor.
6. Use adjacencies
Laptops need bags. So why hide laptop bags in a different part of your shop? Put them with the laptops. Desktops need mice. And possibly mousemats. Why keep them away from the desktops? Put them together. But they might also need to be in the "Accessories" section. So put them there too.
The cross-merchandising and cross-promotion of products can be enormously successful because it's logical and that's what using adjacencies is all about. It will create extra sales, encourage up-sells and give you the opportunity to add extra value to a purchase. Even websites can use adjacencies- how many times have you seen them ‘suggest' "if you like this, you might also be interested in this…"?
7. Don't just take the money, use the checkout as a sales opportunity
There's a double advantage to this: first, the till is an area where the salesperson can run the conversation and engage with the customer; and second, the customer is in purchasing mode and, therefore at their most suggestible (see chocolate bars, batteries and magazines at supermarket tills).
As you put items through the till, get into the habit of starting a bit of banter with every customer along the lines of "Thanks for visiting us today, is there anything else I can help you with?" [gesturing towards the array of inexpensive "must-haves" next to the till. Make sure one is a special offer so you can say…] "You might be interested in this. We're offering 2 for the price of 1 this week and they're only £XX each."
I'm not encouraging high-pressure sales, it's more of a personal touch to make the customer feel special and that you're thinking of their requirements. If they say "No", don't be offended. 8. Use signs to answer common questions
People don't like to feel daft or pressured. If you're having to answer the same question time-and-time again about a product, there will be a lot more people too fearful or embarrassed to ask, or worried they're just going to be sold to.
Save yourself time, and their embarrassment for asking, by having appropriate signs by the item in question. So, if people are always asking, "Does this come with batteries?" then the sign should state "Batteries included" or "Batteries not included".
Along with signage, if a product comes with a leaflet then these should accompany in the appropriate dispenser. Tip: if you think a product needs a leaflet/ sign, make one yourself or print out a product review that explains it.
9. Price everything and make the price visible
Pricing should be clear and easily-spotted on the item. But if there isn't one, it will fall into the "people don't like to feel daft or pressured" category. This means you could be losing sales because the price of the item isn't clear. No item should be on sale without a price on it that is positioned clearly and visibly, including services you offer. So don't hide them underneath (unless that's the only place you can put it).
10. Keep it on the move
Did you know that if you leave something in one place long enough, it disappears! The same is true of merchandising.
If a customer sees something one week because it caught their eye, they'll probably ignore the next because it's the same. But if there's something new it might just encourage their further investigation.
Choosing when to change displays is really up to you, but do think about it: Saturdays are peak selling times so you shouldn't have time to remerchandise them.
Knowing that Saturday will be busy means you have the chance to show off all your new products to the greatest number of people, so change displays at the quietest point nearest the weekend. Many retailers choose Thursday mornings because it's generally quieter then and the new displays will still look fresh for the weekend.
11. Use your staff's knowledge and enthusiasm
The chances are that, if you have other members of staff, they will have an interest in what you are selling. So encourage them to write reviews (make sure they're positive!)
Display them with the product in question; this will encourage product awareness and make the employee feel that their opinion counts and that they are integral to the business. Use employees' creativity to your advantage and get them to design displays themselves (perhaps offering an incentive for the most money taken from their displays?).
12. If you can't see it, it's not there
This is about making sure your displays are in the best condition and visible to the customer. People can't see what you're selling if they can't see through the window and the same is true if you don't keep products to the front of shelves.
All staff should make it second-nature to pull products out where people can see them - if it can't be seen straight away, it probably isn't there. If the first three rows of DVDs on an aisle end have sold, people won't be inclined to look further down and will, most likely, not see the remaining rows.
So replace the missing rows or, if you don't have the stock, replace the display with something else and use that stock for the shelves.
13. Floorwalking
A vacant stare from behind a till won't sell anything. Someone walking around the store, tidying as they go and talking to customers, inevitably will.
You and your shop staff are a hugely underrated form of merchandising – you know what you sell, why you sell it and how much it costs, plus you can provide information when asked. Your staff need to be approachable (like your shop), tidy and presentable (like your shop) and be amiable and professional (like your, erm…)
See what I mean? Again, this is not about forcing a purchase or bullying customers, but showing that you are understanding to their needs and willing to help will show you as more than a box-shifter.
14. Plan your merchandising
If you're going to change your displays weekly, do it all in one go when possible. It's more difficult to see one change in a shop than it is to see several. And, as far as the customer is concerned, if several changes have been made, you must have had new products in. Draw a template of the merchandising areas available in your store and plan their new usage in advance, including window displays.
15. No space, no offer
If you've got a new service like laptop repairs to promote, tell people about it with a sign or poster used as a display. But make sure you have space for every single offer; no space, no offer. Putting offers on shelves without a dedicated area is pointless, you'd be better taking the extra margin from the few customers who do notice it at the normal price.
And, simply because we're good, your bonus tip...
16. Keep notes
As with all business, evaluating and referring to successes and failures is incredibly important in avoiding making the same mistakes again. Keep track of what displays and merchandising ideas have worked for you and use them again. If it didn't work, why didn't it- wrong product, poorly displayed, insufficient stock? Continue to tweak the ideas to find out what works best.
Exercise: How's your merchandising?
This blog sets out what what merchandising is and why it's so important. Armed with it, you are now ready to review your own merchandising. To do this, simply list down the points in this blog and review your shop. How well are you doing? Where could you have more helpful signage? Where does it make sense to use an adjacency? Are you exploiting your aisle ends?
Once you've made the notes, you can draft the fourth chapter to your Retail Development Plan:
As always, the business advice we give is exactly that, advice! what works for one person may not work for another.