The placement of products on the shelf can attract shoppers and improve their shopping experience. If done incorrectly, shopping can become complicated and cause a retailer to lose customers. This article will outline how advanced merchandising and display techniques can create a positive shopping experience.
Introduction To Merchandising
Merchandising refers to practices that contribute to the sale of products to the customer and is more than just shelf packing. It consists of selecting, pricing, displaying, and advertising products while paying attention to and understanding which subcategories flow into one another; which items are at eye level; and which brands are placed next to each other on a planogram.
If you would like to know more about why merchandising is so important, read this article.
Understanding The World Of Merchandising On Shelf
Merchandising can be confusing as there are many terms to become familiar with, such as ‘days of supply’ and ‘capacity’. As a planner, learning and understanding these terms is important, as this will help you create planograms that can increase profitability and gain stock control. For more information about common definitions, terms and acronyms when working with the DotActiv software, click here.
When shelf planning you should aim to optimise sales by displaying the right product in the right place on the shelf at the right time. It is important to have the right amount of stock on the shelf to support demand while not over-investing in slow-moving stock. Your planogram should also be visually appealing. If done correctly, your sales, units and cubic space will be aligned.
To dive deeper into ways to control your stock, read this post.
Merchandising Equipment And Visual Merchandising Methods
Merchandising Equipment
Merchandising equipment is used to organise, promote and display merchandise. The merchandise equipment that you use will revolve around the category you are working on. For example, if you are merchandising frozen foods, you might consider using an upright fridge. If you are merchandising hanging packaging such as sweets, consider using a pegboard to provide tighter merchandising and more product in the same forward space.
The most popular merchandising equipment is gondolas and gondola ends. A gondola is a free-standing fixture with a flat base and a vertical component featuring notches, slat walls, or pegboards. Gondola ends are display units located at the ends of the aisles and frequently display high-profit and seasonal products.
Visual Merchandising Methods
The purpose of visual merchandising on shelves is to attract customer attention by using the shelf space to generate more sales. Below are some visual merchandising methods you can use to create visually appealing displays.
Vertical Merchandising
This is the practice of displaying items in a vertical display. With vertical merchandising, there must be more than one facing per shelf on display. This method makes it easier for customers to compare product offerings and prices, as all brands receive equal visibility at eye level. Please note that this method can cause over-faced SKUs that don’t need complete vertical allocation. It also becomes difficult to only display top performers at eye level.
Horizontal Merchandising
This is the practice of displaying items in a horizontal display. This method makes it easier to present profitable items or brands at eye level. Low-performing brands will not receive the same exposure and will therefore always be poor in performance.
Colour Blocking
This is the practice of displaying items of similar colour together on the shelf. Oftentimes this method is done vertically and is also known as colour ribboning.
Brand Blocking
This is the practice of grouping products of similar brands on the shelf to appeal to brand-loyal customers. Oftentimes this is done horizontally.
Cross Merchandising
Cross merchandising refers to the practice of displaying products that are used with each other together to appeal to impulse buyers, increase sales, and make shopping easier for customers. Read this article for more reasons you should be cross-merchandising.
Before putting into practice these merchandising methods, read this article to avoid overlooking common merchandising basics that can be costly!
Merchandising Principles
Merchandising principles are specific rules that you can use to place your products on the shelf. These principles can also be used to improve the aesthetic appeal of your planograms. Here are some merchandising principles to keep in mind the next time you build a planogram.
General Space Planning Principles
- Merchandise products from the smallest to the largest, left to right, to allow customers to compare sizes and prices and encourage them to buy the larger item after seeing value.
- Merchandise subcategories or brands from premium to economy or if you cater for higher LSMs from economy to premium left to right.
- Merchandise vertically or horizontally and avoid merchandising by both methods in the same drop.
Data-Driven Space Planning Principles
- Give a minimum of two facings to new products that have been added to the range.
- Merchandise slow-moving and low-margin items farthest from the customer’s reach and best sellers at eye level.
- Merchandise the house brand between the brand leader and the secondary brand and at eye level. The house brand may be overfaced.
Fixture Space Planning Principles
- Place heavier and larger items at the bottom of the drop so that the customer can easily access the product without injuring themselves.
- Ensure consistent product height on the top shelf or consistent top shelf height across the gondola.
- Allow at least 2.5cm (roughly two fingers) between a product’s highest point and the shelf above.
You can access the Advanced Merchandising and Displays Techniques course by visiting the DotActiv Academy. If you are a DotActiv employee, please refer to InsiderBase to access this course.