Merchandising 101: Visual & Organizational Strategies

Report
Merchandising 101:
Anecdotes & Methodology
Presented by:
Bob Radcliffe, Jr.
display dynamics, inc.
Overview
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(Un) Conventional Wisdom
The Big Three
Think Like Your Customer
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The Front End
Shopping Baskets
Signs – Retail Road Maps
Shelf Stalkers
Men are from Lowes…Women are from Nordstrom
Retail Judo
Sensual Shopping
What Have We Learned?
What is POP?
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Point – Of – Purchase is the most critical
component of any successful marketing campaign
because it exist at the point of ‘convergence’.
At no other instance are people, products and $$
in the same place….
Merchandising 101
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In 2005, marketing trends in retail environments
will continue to focus on point-of-purchase
displays for attracting new and expanding
existing markets. – 2005 POP Trends Report; In-Store Marketer
(Un) Conventional Wisdom
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The obvious is not always apparent
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Observe the flow of traffic before making merchandising
decisions
Conversion rates…not sales tapes!
Marketing, advertising and promotion brings them…what
happens once they are there?
Talking with customers draws them closer
Interception rates reduce the amount of perceived waiting
time – we would rather look at people than objects!
Shoppers only have 2 hands!
The Big Three!
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Retail stores have 3 distinct aspects:
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Design (meaning the premises)
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Merchandising (whatever you put in them)
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Operations (whatever employees do)
-Paco Underhill; Envirosell
They are all connected…
Making a decision or change to one of
these aspects; you’ve automatically made
a change to the other two as well.
 Example:
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Gap Stores trademark is intimate contact between
shopper and goods.
That merchandising policy dictates that the displays
are wide, flat tabletops; not racks and shelves.
The display policy dictates that significant staff
(operations) is needed on the floor to fold and keep
clothing areas neat.
Think Like Your Customer
Spend half an hour standing in one
place…observe!
 How do people move?
 How are people reacting to your displays?
Is it how you thought they would?
 Shopping has become the museum of the
21st century…it is a social, not business
phenomenon.
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Start with the Front
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Stand half a block away.
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You can see the building but can you identify
what’s inside?
Does your signage reach people at that
distance?
Is the lighting for window displays effective at
various times during the day?
It takes time for people to acclimate to a retail
environment, so don’t try to achieve
something critical in the immediate area by the
door. They will blow right by, hence the term
“decompression zone”.
More On The Front End
Greet customers, don’t steer them! This
will start the seduction…
 A simple hello will also reduce theft.
 Create a “Power” display that will act as a
speed bump and also a billboard.
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It doesn’t have to say “shop me”, but rather
“take a look at what your walking in on”.
Don’t forget the sidewalk…clearance items
create excitement.
Front End Power Aisle – Target Stores
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Anatomy of the Power Aisle:
 “1 Spot” Dollar Store –
Located at the front of the
store, this was a successful
traffic-driving initiative.
 Customers begin shopping
the minute they arrive.
 Drives customers straight
to shopping carts with
thoughts of other deals to
come.
 Sales were 4 times
expectations in first week.
Shopping Baskets & Human Anatomy
Shoppers only have 2 hands – those who
use baskets buy more – period!
 Shoppers don’t necessarily need a basket
at the front of the store.
 They should be spread around, available
without stooping.
 Consumers don’t seriously consider
purchasing until they have browsed a bit.
 Make sure your baskets are appropriate
for the merchandise going in them.
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Signs – Retail Road Maps
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A great sign in the wrong place is worse than a
so-so sign in the right place.
Your store is a 3-D TV commercial.
Get their attention. Then deliver clear, logical
information.
Pictures tell a thousand words.
Checkout areas are perfect for longer messages.
Signs can multiply the power of a price reduction
by a factor of six.
Don’t forget to leave them with a message on the
way out…you look fabulous!
Some Examples…
Signs Work!
Shelf Stalkers
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Typically, shoppers position themselves in
the center of one aisle or location and
begin reviewing a 4’x6’ section at slightly
below eye-level, close to the product that
has the greatest visual contrast - Tactical Insight
Group
Shelf Stalkers
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Research has shown that allocating more
shelf space to memorable brands is not as
effective as better visual presence – even
for less noticeable brands.
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Product placement on a shelf has shown
to be more effective sales tool than the
actual numbers of product packages
showing – Measuring the Value of Point-of-Purchase Marketing with
Commercial Eye-Tracking Data..
Merchandising by Category
Commodity
products with
similar package
sizes are best
displayed in one,
easy shop
category.
Merchandising by Brand; Custom P.O.P.
Industry leading brands
spend considerable
dollars promoting their
products. Good store
merchandising takes
advantage by
reinforcing this
message in store.
Merchandising by Theme
Modular display
components allow
retailers the flexibility to
merchandise many
different products in one,
easy-to-shop area. This
leads to complimentary
(and profitable) sales.
Men Are From Lowes…
Woman Are From Nordstrom
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For men – have seating and food.
Women aren’t just shopping, they are
searching for authentic, emotional
expression.
Women need to feel comfortable before
they buy, so be sure to give them enough
room.
Women need to test, ponder, try, then buy.
Keep as much information available as
possible.
Retail Judo
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People buy what they want, so use their
momentum to maximize sales.
Here’s what they want:
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Touch – it’s material world.
Mirrors – retail brake pads.
Discovery – hints of what’s to come.
Recognition – everybody knows your name.
Bargains – obvious but don’t compromise quality.
No Lines – a positive experience can be killed at the end
Available Information – no dumb questions.
In Stock – Duh!
Informative, Friendly Service – it’s all about people.
Retail Judo
In recent study, fully 30% of respondents
picked Costco and Target as a “fun” shopping
experience because of Costco’s in-store food
sampling and Target’s organization and
sense of fashion.
 Remember that entertaining and maintaining
your store’s displays and products will go
along way to encourage buying and repeat
shopping.
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Retail Judo
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Think again about the supermarket…
When you go to staple items, there’s usually
something new to use with that staple item.
If it’s merchandised correctly – with signage
and ideas how to use it – shoppers will
probably buy it.
Keep this in mind when you organize
(reorganize) your store…drive customers to
their staples, but increase sales by making
sure complimentary and newer products are
at their fingertips.
Sensual Shoppers
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The “open sell” display strategy allows consumers
to touch, smell and try everything.
We are post-Nader shoppers; we will believe it
when we see, touch, taste, hear or try it.
A sale happens once a shopper takes
“possession”, not at the checkout counter.
If a product does something, it should do it in the
store.
Think about Sephora, Brookstone or The Sharper
Image…
So Now What?
Understand your POP needs, including
look and feel.
 Take a fresh look at your store layout and
how it can change.
 Decide on a level of functionality and
flexibility for your displays.
 Reinvest in signage and shelf talkers –
that can update a section in minutes.
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What Type of Displays Should I Invest In?
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Review many merchandising systems in the
market.
Initially, don’t let cost discourage you.
Find a look that compliments your store (and
products).
Feel comfortable communicating a preferred
look to prospective vendors.
Be clear about your store’s physical attributes
(limitations).
Use digital photography – picture tells a
thousand words.
Point-of-Purchase Options…
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Create “focal points” with moveable, modular
island displays.
Use rotating displays to maximize product
offerings in tight spaces – against walls, corners.
Implement waterfall displays for SKU intensive
product categories.
Feature popular and new products with signage
at the front of the store. Reproduce similar
signage within specific departments to reinforce
signage at the front.
What Have We Learned….
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Customers want a relaxing and fun shopping
experience – Good POP design and layout allow them
to enjoy the process.
Be thoughtful about your space and don’t be afraid to
try something new.
Variety may not be the spice of life.
Think modular, moveable, multiple SKU’s.
Sign language; create visual attention with signs and
shelf talkers.
If at first you don’t succeed try, try again – Modular
displays will allow you the flexibility to move displays
(product) is customers don’t seem interested.

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