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6 Overlooked Merchandising Basics That Cost Retailer’s a Fortune

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As far as merchandising goes, there are many facets to remember. Unfortunately, because of all the different moving parts that make up a retail business, it’s easy to overlook a few merchandising basics. In fact, considering the responsibility that comes with running stores and keeping your customers happy, it’s not surprising.

However, overlooking common merchandising basics poses a problem you need to address. If you don’t face up to them, you’ll soon find them costing your retail business a small (or large) fortune.

1. Your product spacing on the shelf is incorrect

When a customer walks into your store, they come in with an expectation that they’ll find what they’re looking for on their shopping list. More than that, your customers will arrive wanting a shopping experience that is effortless, pleasant, and as quick as possible.

That means the last thing they’d want is to show up and your shelves are so overcrowded with products that they struggle to find what they are looking for. As far as merchandising basics go, it’s a big no-no. Besides the frustration they’ll feel as you force them to pull products off the shelf while simultaneously trying not to knock anything over, there is every chance that they’ll leave agitated.

Do you want to do that to your customers? Of course, you don’t. And that’s why you need to pay particular attention to the spacing of your products.

Just to note, when we talk about your product spacing, we’re not referring to the correct amount of space each product should get. We’ll get to that later on in this piece. Instead, we’re referring to the actual location on the shelf your product should occupy.

You should space your products evenly across the width and depth of your shelves with enough space in between the products for your customers to shop with ease. Put simply, there should be a two-finger spacing between the top of a product and the shelf above.

By implementing this minimum spacing rule, you’re able to present your shoppers with both a logical and friendly product layout while simultaneously maximising the efficiency of your shelf space.

2. Your products aren’t correctly positioned in their allotted space

Besides ensuring how your products are positioned on the shelf, you also need to give your products the correct amount of space. It’s merchandising basics 101. Yet you’ll be surprised at how easy this can go wrong.

One of the reasons it happens is because of poor planogram compliance. Without compliance, you won’t get the results you want. After all, you can sign off a planogram and send it to a store with specific instructions on how to implement it. If not executed correctly, you can’t expect the products to get the right space.

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Another reason it happens is that you don’t use retail data to inform any of your decisions. As we’ve noted before, in retail, it’s all about data and how accurately you can classify it.

Let’s take a simple example such as accidentally giving the wrong product an extra facing . As a result, you inadvertently take away a facing for a product which happens to contribute 20% of overall sales in that category.

The result is obvious: you won’t be able to maximise the selling potential of your entire shelf space. There will be a decrease in sales performance as well as stock rotation. More importantly, there is every possibility that there will be long-term adverse effects. That’s especially true if you’ve made this mistake across multiple stores.

3. The merchandising technique doesn’t suit your products or category

Every inch of your store costs you money. That’s why you can’t afford to settle for unappealing or ineffective in-store displays. More importantly, you shouldn’t think that you can pick any merchandising technique to display a product and believe it’ll work. It won’t.

Let’s take the vertical merchandising technique as an example. In most cases, it’s good to use this technique to market off multiple items at eye-level. For a category such as coffee, where your tins are usually the same size, it would work well. Chilled Juice and Soft Drinks could be another category where this technique would work since it can create ribbons for each brand, which enhances the visual appeal.

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However, in a category where there are bulk items like sugar, it wouldn’t be as effective. Imagine trying to merchandise a 5 to 10kg bag of sugar next to a 500 gram or 1kg. The different sizes would make it difficult to apportion space, and the shelf would look messy and unappealing. Thus, for this specific category, you’d be better off merchandising horizontally.

4. Your best-selling products are either hard to find or can’t be reached

No one wants to waste their time looking for something that should be visible. Not only is it frustrating but it can ruin your day. That's especially true if the time you take to find something results in more frustration. An extra 10 minutes looking for lost car keys in the morning could mean you find yourself stuck in traffic.

Now let's put that into a retail context, and say that it takes a customer 20 minutes to find their preferred brand which also happens to be a firm customer favourite. Many of your customers may not even bother searching for these products. If they haven’t found them after a certain time, they’ll either walk out or, they’ll choose a different product in its place.

Just to note, choosing an alternative product isn’t necessarily a good thing. That’s especially true if the product they choose costs less so you’ll lose money. Of course, from another angle, you could argue that it’s better than losing a sale altogether.

That said, to avoid this frustration, your best-selling products should be easy to reach and find. That includes displaying them front and centre and positioning them correctly on your shelf, which means placing them either at eye-level or lower.

5. You haven’t created hotspots

An in-store hotspot plays an important role in enticing your customers to buy your products. More specifically, you can use them to promote and bring attention to a specific category in your store.

For example, if its summer and you sell swimming pool accessories, you could look at creating a highly visible area in your store to market these products. By highlighting these products, you’re bringing attention to the products and encouraging your customers to buy them.

On the other hand, by leaving these products in the middle of your gondola and not specifying that its a hotspot - in short, not drawing attention to them - your customer won’t know about it and you’ll lose the opportunity to create awareness and sell more product.

An ideal area for a hotspot includes near the entrance of your store, on your gondola ends and alongside till points. As for how many hotspots you should have in your store, it depends on the size of your stores. For a larger store, you could have a hotspot at the end of every gondola end. On the other hand, for a small store, you might be better off placing it at the entrance or at your till points.

That said, you should also look to experiment with varying heights to create a visual contrast and capture customer interest. You can also group items based on colour scheme or use, for visual impact.

6. You don’t cut your dog lines

There are no two ways about it. Your dog lines, also known as the tail end of your range, are space wasters. That’s because they consume space in your department without returning anything of value.

By value, we mean sales and profit. As a result of not cutting your dog lines, you’ll sit with a few hundred, if not thousands, of units of unwanted stock that takes up valuable shelf space. More importantly, it prevents you from stocking your shelves with new or faster selling products.

As for why it happens, that’s simple: it comes down to irresponsible ranging. When analysing your current range, and deciding which products to derange or delist, you need to also look at your retail data. In doing so, you can determine the correct assortment to list and ensure your stores don’t end up with dog lines.

Just to note, this isn’t an easy or quick process. Stock movement analysis is crucial before taking a product off your planogram or replacing it with another. After all, the reason for a product’s poor performance might have been because of where it was placed on your planogram. Until you conduct an in-depth analysis, you might think it’s because of a different reason.

Darren Gilbert

With over 10 years of writing and marketing experience, Darren joined DotActiv in 2017 as a content writer where he was responsible for producing blogs, Ebooks and more. He has since worked himself up to the role of content manager, where he oversees all and any content produced by the company.

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