Merchandising 101: Anecdotes

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Merchandising 101Anecdotes Methodology

• Presented by
• Bob Radcliffe, Jr.
• display dynamics, inc.

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Overview

• (Un) Conventional Wisdom
• The Big Three
• Think Like Your Customer
• The Front End
• Shopping Baskets
• Signs Retail Road Maps
• Shelf Stalkers
• Men are from LowesWomen are from Nordstrom
• Retail Judo
• Sensual Shopping
• What Have We Learned?

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What is POP?

• 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.

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Merchandising 101

• 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

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(Un) Conventional Wisdom

• The obvious is not always apparent
• Observe the flow of traffic before making
  merchandising decisions
• Conversion ratesnot sales tapes!
• Marketing, advertising and promotion brings
  themwhat 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!

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The Big Three!

• Retail stores have 3 distinct aspects
• Design (meaning the premises)
• Merchandising (whatever you put in them)
• Operations (whatever employees do)
• -Paco Underhill Envirosell

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They are all connected

• Making a decision or change to one of these
  aspects youve automatically made a change to
  the other two as well.
• Example
• 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.

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Think Like Your Customer

• Spend half an hour standing in one placeobserve!
• 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
  centuryit is a social, not business phenomenon.

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Start with the Front

• Stand half a block away.
• You can see the building but can you identify
  whats 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 dont try to achieve something
  critical in the immediate area by the door. They
  will blow right by, hence the term decompression
  zone.

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More On The Front End

• Greet customers, dont 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.
• It doesnt have to say shop me, but rather
  take a look at what your walking in on.
• Dont forget the sidewalkclearance items create
  excitement.

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Front End Power Aisle Target Stores

• 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.

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Shopping Baskets Human Anatomy

• Shoppers only have 2 hands those who use
  baskets buy more period!
• Shoppers dont necessarily need a basket at the
  front of the store.
• They should be spread around, available without
  stooping.
• Consumers dont 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

• 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.
• Dont forget to leave them with a message on the
  way outyou look fabulous!

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Some Examples
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Signs Work!
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Shelf Stalkers

• Typically, shoppers position themselves in the
  center of one aisle or location and begin
  reviewing a 4x6 section at slightly below
  eye-level, close to the product that has the
  greatest visual contrast - Tactical Insight Group

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Shelf Stalkers

• Research has shown that allocating more shelf
  space to memorable brands is not as effective as
  better visual presence even for less noticeable
  brands.
• 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..

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Merchandising by Category
Commodity products with similar package sizes are
best displayed in one, easy shop category.
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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.
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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.
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Men Are From LowesWoman Are From Nordstrom

• For men have seating and food.
• Women arent 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.

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Retail Judo

• People buy what they want, so use their
• momentum to maximize sales.
• Heres what they want
• Touch its material world.
• Mirrors retail brake pads.
• Discovery hints of whats to come.
• Recognition everybody knows your name.
• Bargains obvious but dont compromise quality.
• No Lines a positive experience can be killed at
  the end
• Available Information no dumb questions.
• In Stock Duh!
• Informative, Friendly Service its all about
  people.

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Retail Judo

• In recent study, fully 30 of respondents picked
  Costco and Target as a fun shopping experience
  because of Costcos in-store food sampling and
  Targets organization and sense of fashion.
• Remember that entertaining and maintaining your
  stores displays and products will go along way
  to encourage buying and repeat shopping.

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Retail Judo

• Think again about the supermarket
• When you go to staple items, theres usually
  something new to use with that staple item.
• If its merchandised correctly with signage and
  ideas how to use it shoppers will probably buy
  it.
• Keep this in mind when you organize (reorganize)
  your storedrive customers to their staples, but
  increase sales by making sure complimentary and
  newer products are at their fingertips.

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Sensual Shoppers

• 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

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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?

• Review many merchandising systems in the market.
• Initially, dont 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 stores physical attributes
  (limitations).
• Use digital photography picture tells a
  thousand words.

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Point-of-Purchase Options

• 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.

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What Have We Learned.

• 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 dont be
  afraid to try something new.
• Variety may not be the spice of life.
• Think modular, moveable, multiple SKUs.
• Sign language create visual attention with signs
  and shelf talkers.
• If at first you dont succeed try, try again
  Modular displays will allow you the flexibility
  to move displays (product) is customers dont
  seem interested.