3 out of 4 purchasing decisions are made in-store. At the heart of the commercial performance of sales outlets lies a proven concept: merchandising! Born with the advent of self-service, this flagship retailing technique is at the heart of every in-store sales system.
But the word merchandising encompasses many notions. It is therefore important to dissect it in order to master all its aspects, especially as the languages of Molière and Shakespeare sometimes use it differently.🧐
Today, Sidely takes a close look at the key merchandising definitions and ideas that every retailer - brand or point of sale - should master.
We'll start with a general definition of merchandising, then go on to detail the different types. We'll then take a look at a number of key concepts in France and elsewhere, as well as examples and ideas of best practice to implement in your stores. Finally, we'll look at how to evaluate the results of your merchandising actions.
Merchandising refers to all the techniques used to optimize the presentation and enhancement of products in a store. The aim is to attract customers' attention and encourage them to buy, thereby boosting sales.
This includes, for example:
Merchandising was born with self-service sales, and its aim is for products to sell themselves. To achieve this, it aims to make a sales area attractive and efficient, to maximize sales performance. Companies therefore call on the services of experts known as merchandisers, or visual merchandisers.
Merchandising is generally considered to take 3 main forms: "management", "organization" and "seduction". We'll look at each of these in more detail below, then see that it's possible to identify other pillars or practices, such as visual or event merchandising.
Merchandising has the following objectives:
It is common practice to encourage sales outlets to focus their actions on five particularly strategic areas to boost their results:
This type of merchandising focuses on the profitability and efficiency of the sales space. It aims to find the best possible layout (assortment, presentation, visibility, etc.) to maximize sales. This includes the strategic placement of items according to proximity, size and number, to encourage impulse buying.
Far from relying on intuition or experience, management merchandising relies heavily onsales data analysis to adjust layouts and maximize sales efficiency. Intelligent layout software optimizes the commercial performance of planograms.
In addition to organizing retail space, management merchandising seeks to leverage profitability through inventory management, product rotation, assortment adaptation, and performance ratio calculations (sales per linear metre, turnover rate, etc.).
Some chains also use the term category merchandising (linked to category management), which involves organizing products into coherent groups, and optimizing assortments according to customer needs.
💡Sidely tip: always design your planograms first, and only then do your restocking. This will enable you to plan your merchandising and fill shelves in such a way as to achieve your sales targets per linear metre.
Organizational merchandising concerns the physical layout of products and spaces to facilitate the customer flow and maximize sales. The aim here is to structure the sales space to make it easier for customers to navigate, and to organize products in a logical way, taking into account traffic flows and product categories.
The aim is to help shoppers find what they're looking for, and increase sales by facilitating the shopping experience.
🌎 Geomerchandising involves adapting the assortment to the habitat and socio-demographic categories of the catchment area. It also adapts to the characteristics of the location: sea, mountains, local consumer characteristics, presence of tourism...
💳 Promotional merchandising can also be used to refer to all the techniques used to highlight commercial offers, the creation of spaces dedicated to promotions, or communication on discounts and special offers.
Seductive merchandising aims to create an attractive atmosphere that stimulates the customer's senses. Using elements such as lighting, music and product staging, it aims to arouse positive emotions and prolong the time spent in the store, which can lead to increased purchases.
Point-of-sale advertising, signage and theatrical displays all contribute to seductive merchandising, as do colors and scents. This is known as emotional or sensorial marketing. A pleasant, engaging experience also encourages customer loyalty, as they develop an emotional bond with the store or brand.
Communication merchandising focuses on the clear, attractive transmission of product information.
Also known as visual merchandising, this technique focuses on establishing a visual dialogue with customers. It uses advertising media and graphic elements to highlight brand values and positioning, helping to differentiate the point of sale in a competitive market.
Digital merchandising
Digital merchandising transforms the point-of-sale experience through the integration of digital technologies. Interactive screens, digital kiosks and connected tools create a seamless link between physical and digital commerce (also known as phygital).
These innovations make for a more personalized customer experience, boosting commitment and satisfaction while optimizing sales performance.
The scope of visual merchandising goes far beyond the simple use of communication media and product staging; it literally aims to create a visual identity that conveys the values of the brand or chain. In fact, it can even be called brand merchandising.
In this context, communication merchandising refers to brand branding and positioning. It's a kind of supra-merchandising that draws on the 3 traditional types of merchandising we've just explored to form a coherent overall experience.
It is the result of a successful alignment between management, organization and seduction, and constitutes the signature of a brand. The whole must support the brand's promise. Communicative merchandising tells a story, conveys the brand's values and transforms the sales space into a distinctive and differentiating universe, synonymous with well-being.
💍 Visual merchandising is essential for brands with a very strong identity, such as those in the luxury sector. These brands often have extremely rigorous specifications for product presentation in sales areas. Manufacturers make sure that display and presentation guidelines are respected. retail execution.
Anglo-Saxons use the term merchandising to designate derivative products or "licencing".
So when they want to talk about what we French-speaking people call merchandising, they usually add a qualifier. The most commonly used are "retail merchandising" or... "visual merchandising", which would literally be our merchandising... And not what we call visual merchandising. 🤯
In any case, when our American friends talk about merchandise, they usually meanpromotional items.
In the same vein, we sometimes hear the expression " event merchandising", as "goodies" are often distributed at events such as concerts or sporting competitions.
These are opportunities for marketing activation campaigns, or promotional operations enabling brands to reach out to their potential customers to increase awareness and popularity.
Branded objects provide leverage to encourage passers-by to interact. Retaining them creates a lasting memory and relationship(s) with the brand. They can also be a source of additional revenue for the companies that own the rights to them.
As we've seen, there are many techniques and strategies that fall under the merchandising umbrella. And it goes without saying that the luxury, events, ready-to-wear or parapharmacy industries will have different objectives and priorities.
To inspire you in the implementation of best practices, we offer you a series of concrete examples: 10 ideas for merchandising actions to match your marketing objectives.
To judge the effectiveness of merchandising, brands and stores can measure the evolution of various indicators, by comparing sales performance before and after the implementation of their merchandising actions.
Various KPIs can prove useful:
As some data remains at the discretion of sales outlets, the brands we distribute have to set up collaborative mechanisms that include the sharing of checkout data, known as sellout.
But financial performance assesses results without necessarily validating the correct application of retail execution. That's why brands send their sales reps out to the points of sale to carry out shelf surveys, checking product availability and presence on the shelves, or the correct placement of POS elements. This is a true merchandising survey.
By cross-referencing the sales performance of the various outlets in which their products are distributed, brands can identify areas for improvement and try to influence stores lagging behind in terms of results. For retail salespeople, it's always a good idea to advise outlet managers beyond their own brand. This creates a win-win relationship based on the exchange of knowledge and figures, as advocated by trade marketing.
With this last recommendation, we hope to have covered the subject of merchandising exhaustively. You should now be able to define your merchandising priorities, as well as identifying key areas for improvement in your stores.
Now all you have to do is take action! 💸
From our side, all we can wish you is to increase your sales 🤞