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Merchandising

MERCHANDISING

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MERCHANDISING. TECHNIQUES AT THE POINT OF SALE

Merchandising refers to the techniques used at the point of sale to attract customer attention, enhance the shopping experience and increase sales. Some common merchandising techniques include strategic placement of products, attractive visual presentation and effective arrangement of shop fixtures.

Some specific point-of-sale merchandising techniques include:

  1. Strategic product placement: Place the most popular or higher margin products in prominent areas of the point of sale, such as at the entrance or near the cash register, to attract the customer's attention and increase the likelihood of purchase.
  2. Thematic exhibitions: Create themed displays that highlight related products, such as a hair care section or a baby products section.
  3. Attractive visual presentation: Use design and visual presentation techniques to make products stand out, such as appropriate lighting, colour and product organisation.
  4. Promotions and discounts: Offer promotions and discounts on selected products to encourage purchase.
  5. Product demonstrations: Offer product demonstrations to attract customer attention and provide useful product information.

In a nutshell, in-store merchandising is an important strategy for any retailer wishing to increase sales and improve the in-store customer experience. By applying effective merchandising techniques, companies can highlight their products and attract customer attention to increase the chances of sales.

Merchandising is a technique that can offer various advantages and disadvantages for companies.

Some of them are:

Advantages

  • It attracts the attention of customers: Merchandising done well can capture the attention of customers at the point of sale and generate interest in products.
  • Improve the shopping experience: The use of merchandising techniques can enhance the customer's shopping experience by making it easier to locate products, interact with them and make purchasing decisions.
  • Increases sales: Merchandising can lead to increased product exposure and therefore increased sales.

Disadvantages

  • High cost: The implementation of merchandising techniques can be costly for companies, especially if major changes are required at the point of sale.
  • Risk of saturation: Excessive merchandising techniques can lead to visual and sensory overload at the point of sale, which can result in a negative shopping experience for the customer.
  • Location dependency: The success of merchandising can be highly dependent on the location of the point of sale, which may limit its application in certain contexts.

It is important to consider these advantages and disadvantages in order to assess whether the use of merchandising techniques is appropriate for a particular business and how it can be implemented effectively.

Some point-of-sale merchandising techniques and tools include:

  1. Distribution of space: The proper layout of space in the shop is essential to attract customers and enhance the shopping experience. Aspects such as product placement, lighting, decoration and customer circulation should be considered.
  2. Visual merchandising: This technique focuses on the visual presentation of products at the point of sale. It seeks to highlight the most attractive products for customers and guide them through the shop so that they can easily find what they are looking for.
  3. Promotions and offers: promotions and offers attract customers and can increase sales. Various strategies can be used such as discounts, gifts, 2×1, among others.
  4. Signage: proper signage of products and sections of the shop can help customers find what they are looking for more easily and create a more pleasant shopping experience.
  5. Layout of the shop: refers to the organisation of products in the shop. Various techniques can be used such as placing related products close to each other, maze-like arrangement to encourage exploration of the shop, among others.
  6. Data analysis: can help to better understand customers and their buying behaviour. Various tools such as sales analysis, market research and social media data analysis can be used to better understand customers and improve merchandising strategy.
  7. Staff training: is key to the effective implementation of merchandising. Staff should be trained on merchandising techniques, the shop's products and services, and how to interact with customers.
  8. Inventory management: Good inventory management is key to ensuring that products are available to customers when they need them. Aspects such as inventory turns, stock management and demand planning must be considered to ensure that products are available at the right time.

It is the activity in retail establishments, based on promotional actions on the portfolio of products sold there. The main objective is to optimise the sales space and, in general, all the actions of marketing carried out in the channel. In many cases, associated with promotional items or advertising, at the point of sale. It is useful for product launches and to maintain a friendly presence in the minds of current and potential buyers. It is a very traditional and widely used tool among SMEs. It is inexpensive and quantities can be handled.

Nowadays it is more common to talk about merchandising as a product than as a set of strategies.

It serves to reinforce the visibility of a company or brand so that consumers continue to maintain contact with it and, in the process, increase their intention to buy.

Some keys to visual merchandising

Integration

The point of sale is the "end point" of your entire marketing strategy. Communication must be the same in each of your channels. Merchandising, therefore, must be in line with the strategy at the point of sale. networks, corporate image and signage, among others.

Segmentation

You must remember very well which audience you are "talking to" and the way in which you "talk to them"; take great care of your branding. Especially if you are a brand that has several types of customers.

A good story

Storytelling is a relatively recent term, but it has been a part of window dressing for many years. It generates a narrative around your brand, something that is put into practice in companies as diverse as Red Bull, Coca Cola and Inditex.

Creativity

Creating a thematic atmosphere linked to a specific environment - such as Christmas, summer, sports, technology - can create an immersive environment to increase sales and customer loyalty.

Types of purchases

One of the key factors in merchandising is to take into account the different types of purchases that customers make depending on how and at what moment they make the decision to buy a product. Thus, we can differentiate between:

Rational (or intended) purchases 45%:

  • Realised. These are those carried out according to the initial forecast, both by product and by brand.
  • Necessary. These are purchases made by product, but without foreseeing the brand of the product. This type of purchase is adapted to the profile of the consumer who is looking for bargains.
  • Amended. These are the purchases per product but may be modified depending on the brand of the product.

Irrational (or impulse) buying 55%:

  • Planned. The consumer has the intention to buy, but waits for the right moment to do so (sales, promotions, etc.).
  • Remembered. The customer has not planned his purchase, but when he sees the product, he remembers that he needs it.
  • Suggested. These are the ones produced when a customer, visualising a product on a shelf, decides to try it out.
    Puras. This is the purchase that breaks habits, i.e. the totally unforeseen purchase. In this type of purchase, it is the establishment that creates the consumer's need at the point of sale.

Types of products and how to place them

In the same way as with the types of purchase, there are certain types of product that meet the demands or needs of buyers at different levels and, therefore, are more likely to be purchased under certain circumstances. Thus, we can speak of:

Attraction products

They are the best sellers and should be placed at a distance so that the customer covers as much of the shop as possible.

Rational or irrational purchase products

Impulsive purchases are best placed in boxes, while more reflective purchases (those that need time to think about their purchase) need an uncluttered and spacious area.

Complementary products

These are products that "complement other products". For example, coffee can be a complementary product to milk. These types of products and sections must be positioned in such a way that they complement each other. A basic aspect of merchandising is the management of the shelf with the aim of optimising its performance and space management.

When deciding where to place products in the shop, it is important to consider two factors:
  •  Handling of products. Special products, such as heavy or bulky products, require positioning to promote comfort.
  •  The preservation of products. Certain product sections, such as fresh, frozen or refrigerated products, require a series of conditions that allow both their optimal preservation and compliance with health regulations.

Visual merchandising

Pay special attention to the furniture used for each type of product, as well as to the lighting, the arrangement of the products inside the furniture, etc.

In addition, the basic levels of product exposure are particularly important:

  • Upper level (eye level or perception level).
  • Intermediate level (hands level).
  • Lower Level (ground level).
  • Head level.

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TASK

CASE STUDY

Juan is an entrepreneur who has just opened an organic products shop in his town. He knows that in order to attract more customers and increase sales, he needs to apply merchandising techniques in his shop.

THE ACTIONS THAT JUAN TOOK ARE DESCRIBED BELOW:
  1. Shop window design: Juan designed an eye-catching and attractive window display, placing the most popular and discounted products on display. He also used lights and colours to highlight the products.
  2. Distribution of products: Juan organised the shop's products strategically to facilitate customer navigation. He placed high-demand products in prominent locations and complementary products together to encourage cross-selling.
  3. Price: Juan set clear and visible prices on each product. In addition, he offered discounts and special offers on selected products.
  4. In-store advertising: Juan put up posters in the shop highlighting the advantages of organic products and their health benefits.
  5. Customer service: Juan trained his staff to provide excellent customer service and to be able to answer questions about the products.
  6. Loyalty programme: Juan implemented a loyalty programme to reward loyal customers with discounts and special offers.

As a result of these actions, Juan's shop became an attractive and friendly place for customers. In addition, sales increased significantly due to the merchandising techniques applied.

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Picture of Jaime Cavero

Jaime Cavero

Presidente de la Aceleradora mentorDay. Inversor en startups e impulsor de nuevas empresas a través de Dyrecto, DreaperB1 y mentorDay.
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