What Is Retail Merchandising? (+3 Tips from Winning Brands)

(This article originally appeared on G2: Source)

Brick-and-mortar retail isn't going anywhere. 

Despite the clamor surrounding the so-called retail apocalypse, studies show that more than half of consumers are motivated to visit a physical retailer because they want to see and touch an item before buying it. Savvy retail brands know this and are taking action to keep their products top-of-mind for buyers. 

When shoppers walk into a brick-and-mortar store, they’re bombarded with subliminal messages driving them to purchase just as much as they are by the actual product assortment. These buying messages come in the form of special promotions, displays, and sampling events, all designed to ultimately increase the number of items that land in the consumer’s shopping cart.

Retail suppliers invest heavily in the methodologies listed above as part of their retail merchandising strategies, especially considering that up to 80% of purchase decisions are driven by shoppers’ unconscious thought. Psychology aside, what exactly does retail merchandising entail? Even better, which brands are doing the best job of it? 

In this article we’ll give an overview of what retail merchandising is and provide examples of how top brands are using merchandising to win at the shelf.

What is Retail Merchandising?

Retail merchandising encompasses those efforts employed by retailers and suppliers to sell more product in-store. A retail merchandiser can be responsible for any or all of the following tasks: 

Retail Merchandising Examples From 3 Top Brands

Since both parties have something to gain, retailers and suppliers often collaborate to draw up agreements on how retail merchandising processes will be executed. More often than not, however, it’s the supplier brands who are left accountable for making sure the plan is being carried out correctly.

Let’s take a look at how some top consumer goods companies are nailing their retail merchandising.

Kraft Heinz Ensures Promotion Success

No matter how hard a retail merchandising rep has worked to cultivate relationships with store management, promotions and other in-store sales programs can go by the wayside as the retailer is burdened with demands coming at them from all angles. The field sales team at Kraft Heinz doesn't leave the success their retail merchandising programs up to chance. Instead, the team at this food and beverage giant relies heavily on data to ensure proper execution.

Instead of just telling a particular retailer account about a slip up, the Kraft Heinz team shows the retailer. The team does this by carefully auditing their stores where promotions are scheduled to take place, and presenting their findings upon each store visit. Armed with data in-hand, reps are able to prove that the retailer is not upholding their end of the agreement, and in turn missing out on potential sales.

Since implementing this process change, the Kraft Heinz team has been able to boost retailer compliance by 80%, leading to a 25% sales lift!

Daiya Foods Increases Facings

Most suppliers keenly desire additional facings on the shelf, but few are fortunate enough to receive them. Daiya Foods are purveyors of vegan dairy products, making it difficult for traditional retailers to understand their value proposition. The company also uses data to their advantage to make the case for receiving additional facings.

Besides the plant-based boom in the food and beverage space, Daiya needs to give retailers a reason for why their brand should be allowed to invade the dairy aisle. Similarly to Kraft Heinz, data is their weapon of choice for getting this job done. The team utilizes metrics around growth and velocity to catch retailers’ attention, and ultimately close the deal. The strategy seems to have paid off for Daiya, who was acquired for over $300 million dollars in 2017.

EVOLUTION_18 Positions Itself In an Alternate Category

While a data-driven approach is certainly advantageous for retail merchandising success, sometimes a little creativity can be just as powerful. EVOLUTION_18 is a wellness brand spearheaded by cosmetics industry legend Bobbi Brown. Capitalizing on its founder’s industry expertise, the brand chooses to position itself in the category most aligned with her other ventures.

Despite an ingestible product line that’s made up of powders, shots, and capsules, EVOLUTION_18 is sold in the beauty department of the nation’s largest retailer, rather than alongside traditional supplements. Moreover, it’s accentuated with an eye-catching endcap display, further solidifying the brand’s place in the category.

Brand managers were thoughtful about this placement strategy, understanding that beauty shoppers are probably familiar with Bobbi Brown’s other businesses whereas supplement shoppers might not be, making it easier to win the sale. The atypical placement seems to have paid off, with the brand citing that certain products soon sold out after implementing the display.

How to Leverage Retail Merchandising Software

Winning brands understand the importance of leveraging technology to succeed in retail. It’s not enough to rely on anecdotes and historical examples for achieving flawless retail merchandising execution. As hinted at above, data is the lifeblood of a profitable retail merchandising process.

At the core of any good retail merchandising system is data. Retail software empowers brands and retailers to not only collect data on in-store conditions, but to turn it into actionable insights. An effective system combines sales data with data collected in-store to paint a complete picture of how retail merchandising is impacting the bottom line.

Data sharing becomes important for turning insight into action. If suppliers and retailers are not transparent with their respective data sets, both risk missing out on the possibility of higher sales. This is especially true for concerns around maintaining correct inventory levels and ensuring promotional success. Again, an effective software tool allows for reporting on and presenting data in order to achieve mutually beneficial outcomes. 

Wrapping Up Retail Merchandising

To stay relevant in today’s marketplace, retail brands cannot ignore the value of merchandising. By looking to peer companies for inspiration and leveraging retail merchandising software, brands have a much more viable shot at growing sales through the retail channel.