One of the most challenging jobs a store manager has is placing merchandise in his store in a pleasing and effective manner. Many times companies try to reduce the stress of this task by providing planograms, hiring field merchandisers, etc but yet I still see managers struggling with how to fit 10 pounds into a five pound sack. Many times it is the marketing department that is at fault since we should not be trying to fill the stores to over flow for any reason other than insanity. If a manager is struggling with the 10 pound dilemma, someone in the office needs to revisit the marketing plan and determine why we have so much stuff in our locations. As someone that has been on both sides of the table when it comes to merchandising, I know that the best marketing plans do not always work out the way we would like them to. But one of the most disturbing trends in our business today is the lack of execution in marketing programs. Recent surveys have shown that as much as 60% of the marketing programs in retail are not implemented to specification. Signs are wrong or missing, product not correct or quantities wrong or the entire program is missing. When we set up our stores, we need to ask ourselves just what is the customer going to experience? Recent additions to retail such as Apple have done excellent jobs in creating an exciting and captivating experience for the customer and their sales numbers show that they are headed in the right direction. Of course they have a product line that has strong demand but how many obstacles can you put in the way of a customer when they are looking for their desired purchase before you lose them to competition? Why would Apple open retail locations when they could just as easily sell their products over the internet? For one reason only and that is they are increasing their sales by letting the customer experience the product in a controlled environment. That is what retail is about. Driving sales through customer experiences in an environment that can be measured and replicated, much like a scientific experiment. So in looking at retail, what are some of the rules we need to follow to have a good shopping experience?
One: All product needs to have differentiation. So many times I enter a store and it is a blur of product. Tons of color, signs, and the pile high merchandising philosophy are the main characteristics. Everything seems to blend into each other. A customer goes into sensory overload and then usually shuts down. As human beings we have to be conditioned to tolerate this setting. If is usually only accepted during the holiday season when guilt and other emotions over ride the self preservation factor. Even now though, we see a shift away from this merchandising philosophy. The erosion of sales from brick and mortar to the internet where the customer is in control of the flow of products shows that even with such weighty emotional triggers such as Christmas, our need to escape this assault on the senses is winning.
Two: Everything must have a price. Not just a price but a price the customer can see and understand. I keep reminding my clients that as our population gets older, signage needs to be more striking. White space, font size and design become critical so confusion is avoided.
Three: What are you trying to sell? What does a customer see when they enter the store? What profit centers are you steering your customer towards? If you have high margin products that you want to move, how does a customer get to them? In grocery, we know that the perimeter of the store is the high margin areas while the inside of the box is the commodity section. How does your store sell your higher margin items?
Four: Watch your customers. How do they move through your store? As human beings we do not like to make hard turns but almost every retailer designs their stores as if we are robots making hard left and rights when really we like to move through a space in a circular motion. How many Zen pathways is there that are left right left right? Most are in circles so we may relax and move in a manner less stressful.
Five: Where are you pointing your customers’ attention? Most right handed people will look and move to their right. Did you put all your great display and impulse items behind the customer? Will they even see them as they move through or are they in the customers’ blind spots?
Six: Impulse vs. destination purchase habits. We draw people to our stores with destination desires but the goal of merchandising is to sell them more while they are in the store on an impulse basis. Increasing customer count and average ticket are the only ways to really drive sales so if your merchandising program does not address both of these key performance indicators, you are in trouble.
So there we have it. Some basic merchandising guidelines. If your stores are following all of them, you are well on your way to taking care of basics and can move on to controlled experiments in your stores. With social media, new sign mediums and other technological improvements, retailing is going to be an increasingly exciting arena. Take some time and see how your customers experience is measuring up in your stores.
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