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Soon to be by Smartsheet.When customers walk into the store, they don't consciously think about the sensory experience. Rather, the colors, sounds, smells, temperature, and the way the merchandise feels combine to deliver an experience to the customer psyche that they may not even realize. Retail merchandising is an art and science. Decades of customer research, driven by the overwhelming economic importance and growth of the retail industry, arm retailers with actionable data for effective merchandise strategies and best practices. Whether you are new to retail, have been a retailer for years and are looking for new inspiration to outperform the competition, or work for an e-commerce giant, there's something here for you. Learn tips and the new visual merchandising concepts from experts and researchers who are using cutting-edge science to study buyer behavior. Explore the impact that retail merchandising has on customer experience as well as the business of merchandising, including criteria for selecting a merchandising solutions provider. Discover the new rules of visual merchandising and how to be successful as a merchandise manager. Retail merchandising includes activities and strategies such as in-store design, the selection of specific merchandise to match a target market, and the physical and digital marketing of merchandise to customers. As a form of marketing, promotional merchandising includes programs such as attractive promotional displays featuring recognizable adult celebrities or licensing agreements between retailers and entertainment companies that utilize identifiable animated children’s movie characters. The selection of retail merchandise and the type of goods and services a retailer decides to stock are key retail strategies. According to author Michael Levy in Retailing Management, the decision to carry particular merchandise is tactical rather than strategic. For example, Lululemon uses attractive packaging to market its apparel.
Lululemon provides customers with reusable bags in a variety of sizes and styles. The bags leave the retail store and serve as a type of moving merchandising strategy for brand awareness. The packaging is so effective and recognizable among the brand’s loyalists that there is a resale market on ebay for the bags. It involves planning for and directing the business processes involved in satisfying wants and needs and creating customer value at the end of the retail supply chain by selling goods or services (or both) to customers for a profit. Levy defines retail strategy in three parts: Tactics within the overall retail strategy include the variety of merchandise available for sale in store or online and how the retailer advertises and displays that merchandise to stimulate interest and create a customer experience. A sound retail strategy involves developing a desirable retail merchandise mix of products that add unique customer value. NAICS organizes the retail trade industry (code 44-45) according to the “similarity in the processes used to produce goods or services.” Retail merchandising refers to business activities and retail management philosophy that cover a wider category of goods and services than fashion merchandising. For example, retail merchandising includes classifications like Clothing Accessories Stores (code 448150) and Shoe Stores (code 448210). The NAICS accepts that “knowledge of fashion trends” is a service that various retailers in the retail merchandising category provide. However, fashion merchandising services also represent a separate economic activity under the Specialized Design Services (code 541490) category. Retailers typically occupy the end of the supply chain involving manufacturers, wholesalers, and other suppliers and agents. Retail merchandising is, therefore, responsible for selling directly to the customer.
Fashion merchandising may involve direct, value-added customer activities, but fashion merchandising professionals often sell directly to wholesale suppliers as well. For example, the merchandise, services, and store-design methods involved with fashion merchandising activities would not apply to used car dealers. The last component of the retail mix, visual merchandising, is another type of merchandising activity in the retailer’s tool belt. It guides the planning and activities responsible for how customers see your physical and digital stores, and the goods and services visible within. Visual merchandising applies to everything from the exterior of your retail store to the well-lit entryway all the way through to the well-placed furniture, fixtures, and promotional displays. It helps create customer value by making the shopper journey efficient, unique, and memorable. Visual merchandising is responsible for creating the digital or physical environment that appeals to your target customer and aligns with your overall retail value proposition. The creative methods of visual merchandising stimulate customers to make purchases. Retailers can design a customer experience with the layout of store merchandise, the UX design of e-commerce landing pages, and the usability and imagery of a mobile app. Modern neuroscience studies suggest that the impact of messaging via optical stimulation is measurable and real. The field of neuro-marketing studies how customers make purchasing decisions and how retailers can influence customers. In the book Retail Marketing Strategy: Delivering Shopper Delight, author Constant Berkhout discusses how brain research is an appropriate retail marketing tool. For example, he cites a study in which researchers affixed smiley face stickers to merchandise price tags. These emojis gave shoppers the perception that the prices of the items displaying the stickers were lower than the prices of the items without the stickers.
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Berkhout explains that shoppers are “unconsciously attracted by pleasure and a feeling of reward.” A well-known and simple visual image — in the relatable and popular form of communication (emojis) preferred by highly sought-after millennials and Gen-Zers — had a powerful effect on customer value. He gleaned this information from his time with neuroscientists who were trying to understand the brain activity that accompanies the ideal shopping experience. He also cites research from The Buying Brain: Secrets for Selling to the Subconscious Mind, by Dr. A.K. Pradeep. Here is a list of the visual merchandising tips that Berkhout adapted from this neuro research. They include observations on how to turn insight into retail solutions: They routinely look for changes in familiar retail environments (or on landing pages) and use visual stimuli closest to their point of entry. Place signs closest to the customer’s entry point, and guide the shopper journey with images rather than text to avoid overstimulation. It takes more effort for scanning shoppers if the text appears on the left, and the image appears on the right. These round-end caps should help the shopper navigate by providing clues to what they will find on the rest of the aisle. The ideal length of an aisle is approx. 20-22 ft., and, halfway down each aisle, there should be some “visual interruption,” such as special lighting or a floor display, to attract the shopper. If the display features people, it should always include imagery of smiling, happy customers. For example, if you wish to promote the breakfast items on your menu, it is better to show a person consuming said items rather than the product by itself. If your merchandise is apparel, it’s preferable to show that apparel in action. Also, the material of the shelving and displays matters to the customer’s visual perception of value.
Wood gives the impression of “real, authentic, and organic,” but shoppers may perceive a higher price point for items displayed on natural wood shelves. For example, position batteries next to electronic devices, stage merchandise kits next to core products (for example, socks, shoe laces, and shoe cleaner), and place unrelated (but logical) products on display with profitable merchandise. An investigation of brain activity during a “visual stimulation of goods” demonstrated the potential of neuro-marketing by finding that unconscious thought drives up to 80 percent of customer purchase behavior. The “rational customer” is a myth, and the point of sale itself can directly influence customers — especially if that customer fits the individual motives of the retailer’s target customer group. What does this mean for retail merchandising. A new set of retail merchandising rules must account for the emotional, irrational customer behavior discovered by scientific methods (such as neuro-marketing) and the customer experience demands of a digital era. The consequences include cart abandonment and order cancellation or, worse, choosing the competitor's environment that has fewer choices. According to findings cited by Berkhout, shopper happiness increases when retailers reduce choices. Consider three to be the magic retail merchandising number: Explore a category management strategy with three core products that you offer quarterly (every three months) to create demand and keep up with changing customer trends. He uses the principle of availability to point out that people don’t have the time or capacity to process these messages and only pay attention to personal events that have occurred recently. Personalized service as well as a customer experience that matches the target customer’s lifestyle are more likely to create customer value. Leverage the segmentation capabilities of social media advertising platforms, and experiment with ads personalized for your customers.
Make retail merchandise physically accessible to customers. An outstanding customer experience is the final piece of the customer value puzzle. By using innovative in-store technology (and, thus, replicating the high-tech customer experience that makes digital retail channels so compelling), department store Neiman Marcus is combatting the shift of retail sales to digital channels. The company’s iLab project created a “Memory Mirror” for in-store customers trying on clothing. While the shopper spins around, the digital mirror records eight-second video clips, capturing multiple angles and building a library of different options side by side. Shoppers can then share the videos on Facebook or Instagram for feedback on different retail merchandise. The iLab project also rolled out Charge It Spot stations that allow customers to charge their mobile devices while shopping, simultaneously encouraging more time in the store and the digital discovery of retail merchandise. A retail merchandising strategy that successfully embraces the physical and digital customer experience doesn’t necessarily require the resources of a retail giants like Neiman Marcus - small, independent retailers can leverage retail management software that allows customers to reserve products online and pick them up in the store. These specialized merchandising businesses provide expertise and resources to successfully plan and execute retail strategies. Retailers without the personnel or resources to oversee merchandising budgets and activities or execute retail strategies in house rely on third-party solution providers like Umdasch Shopfitting. According to Wikipedia, shopfitting is the “trade of fitting out” retail stores with equipment, fixtures, and fittings.” A shopfitting firm “typically incorporates professional expertise in interior design, the manufacturing of bespoke furniture, signage, fittings (with one’s own or outsourced facilities), and the purchasing of retail equipment.
” The company provides general contracting and design services, and retail equipment specialization (shelving, furniture, lighting accessories, etc.). They also provide project management and digital retail professionals to implement advanced retail strategy and technology. Here’s a list of other prominent retail merchandising businesses and a snapshot of their advertised capabilities: The company offers turnarounds for retailers behind on expenses and a retail diagnostics program for financial analysis, industry benchmarking, and compensation review. The company offers three categories of service: syndicated, project, and dedicated services based on the size of operation and the specific needs of the retailer. Within these categories, SPAR Group provides retailer directed in-store merchandising services dedicated to all manufacturers, new store set and remodel, events and demo management, audits, and assembly services. The company uses an activity-based model to support each retailer partner and dedicates a team to the independent projects for tailored customer support and complete budget control. The company offers ERP integrations and retail management systems software implementation for a variety of proprietary software deployed as cloud-based SaaS or hosted on-premise. RMS employs retail merchandising service representatives, field coordinators, and management in geographic territories.Retail merchandising strategy for small independents is distinctively different compared to omnichannel retailers or large multi-store retailers. Merchandising solutions businesses offer professional services for retailers or all sizes; however, many leverage their large workforce, proprietary technology solutions, and the expertise of various professions (architects, digital marketers, contractors, etc.) to solve complex retail merchandising challenges. Merchandising solution providers specialize in online retail stores and managing digital channels as well.
If your IT capabilities or resources are limited, it is important to work with partners familiar with the complexities of online security, cloud-based software deployment and management, digital marketing, and web analytics. The company designs and manufactures point of purchase displays and kiosks for in-store environments. Holley has more than 20 years of experience in developing custom branded, in-store marketing solutions for retailers. He offers the following qualitative criteria for evaluating merchandising partners: How many clients partner with them on multiple projects. Can they provide real-world examples when a merchandising project was sidetracked and what the company felt was the positive, and negative, outcome? Request physical samples of merchandise displays or a portfolio of digital media and pay attention to the small details. Review the merchandising solutions the company creates for their clients. Does their portfolio back up claims of creative capabilities and customer insights. What is the depth of creative resources on their team and how many designers work on a project on average. Concentrate on the design quality of graphics and use trade shows to scout how the company represents their craftsmanship for their own marketing and customer experience. It is important that your merchandising partners are willing to be flexible and modify solutions when challenges arise. Can they achieve the original plan on the agreed upon dates consistently. Ask questions to determine how nimbly the partner works around the challenges of the retail supply chain, involving multiple trade and category managers with a stake in the design and display of their products. Supply chain merchandising is a partnership between merchandise managers and their network of suppliers, who use shared resources to stock products and displays for customers to access.
This merchandising activity is done by the manufacturer, vendor, or wholesaler that provides the products to the retail store and in some scenarios, may include the partners who select the merchandise mix for retailers. Grocery retailers, for example, rely on the in-store merchandising services of their partners for activity such as shelf stocking, inventory management, and promotional display creation. Omnichannel retailers partner with suppliers and third party vendors on e-commerce merchandising activity such as implementing cart abandonment technology on a hosted website or managing dropshipping partners in the supply chain. Linkedin lists a variety of merchandise manager professionals working in various retail environments, and with all types of merchandise. A variety of specialized roles related to merchandise management exists as well, including specialty buyers, purchasing and vendor managers, sales trainers and consultants, professional service providers, turnaround managers, supply chain specialists, and technologists who specialize in inventory management and POS systems software. The role of a merchandise manager varies but aligns with retail management philosophy, planning, strategy, and activity. Retail merchandise management responsibilities include the following activities: In fact, proper retail merchandise planning is so critical to profitability that the retail industry supports separate job categories for merchandise planners and the major retail management system software solutions providers design planning tools and technology for users. The planning responsibilities for merchandise managers include sales forecasting, inventory planning, customer trend analysis with vendors, visual merchandising design, and seasonal store layout.
The merchandise budgeting process requires projecting demand, projecting sales, determining which costs to attribute (cost of goods sold, marketing expenses, software cost, shipping) and estimating purchases and reduction (inventory theft or damage). The budget may be static or flexible, depending on the business history and retail category, and consists of projected sales, inventory cost, estimated reduction, and estimated purchases. The ultimate goal for retailers is profitability, and there are various methods used to manage a profitable inventory. For example, merchandise managers budget for real-time inventory expenses to identify how much capital is available at any given time. This portion of the merchandise budget is called open to buy (OTB). For more information on common retail formulas related to inventory planning methods, including average inventory, stock-to-sales ratio, sell-through rate, and stock turnover, visit the article How to Survive and Thrive in Retail Management. Merchandise managers plan for how many product variations of a particular product to carry, as well as how many types of products to carry overall. This requires determining trade-offs and savvy analysis of customer trends, operational capacity, and internal capabilities (such as sales staff experience). Merchandise managers may work for retailers known as category killers: A retailer using a deep assortment strategy of a limited number of products to dominate a category and make competition difficult (for example, Staples’ assortment of business supplies and services). A greater percentage of retail sales shifting to digital channels makes category killers less of a threat to smaller retailers leveraging narrow assortment strategies.
Merchandise Managers are often involved in the day-to-day activities in a variety of retail environments that include creating displays, stocking shelves, managing inventory, training sales staff, and working with information systems for inventory management and sales reporting. Here is a sample of highlights from the website’s merchandise management resumes: Achieved consistent 4-5 comp growth in responsible departments.” To do so, merchandise managers need to consider how every retail merchandising decision helps the customer. According to Berkhout, this is the core of category management. Professionals originally used the term category management to describe the joint business planning between retailer and supplier, writes Berkhout.
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2006 YARIS HATCHBACK from Aug. ’05 Prod. (OM52703U) For Canada 2006 YARIS HATCHBACK from Aug. ’05 Prod. (OM52703U) The nozzle will be damaged. 2006 YARIS HATCHBACK from Aug. ’05 Prod. (OM52703U) The defogger is not designed for drying rain water or for melting snow. 2006 YARIS HATCHBACK from Aug. ’05 Prod. (OM52703U) With tachometer With tachometer Low fuel level warning light PS16502a PS16504 Without tachometer Without tachometer 2006 YARIS HATCHBACK from Aug. ’05 Prod. (OM52703U) If your vehicle overheats, stop your vehicle and allow the engine to cool. Without tachometer 2006 YARIS HATCHBACK from Aug. ’05 Prod. (OM52703U) NOTICE Do not let the indicator get segment into the red zone. This may cause severe engine damage. With tachometer 2006 YARIS HATCHBACK from Aug. ’05 Prod. (OM52703U) The same process can be applied for resetting the trip meter B. Without tachometer 2006 YARIS HATCHBACK from Aug. ’05 Prod. (OM52703U) Fasten driver’s seat belt. (Indicator and buzzer) Fasten front passenger’s seat belt. If brake system warning light is also on, stop immedi- ately and contact Toyota dealer. Close all side doors and back door. Take vehicle to Toyota dealer. The malfunction indicator lamp will go off after taking several driving trips. 2006 YARIS HATCHBACK from Aug. ’05 Prod. (OM52703U) Light This light warns that the engine oil pres- sure is too low. 2006 YARIS HATCHBACK from Aug. ’05 Prod. (OM52703U) The light comes on or starts flashing while driving. 2006 YARIS HATCHBACK from Aug. ’05 Prod. (OM52703U) The light The light operates to warn that the engine will remain on thereafter.Abrupt shifting 3. Release the parking brake and brake could cause the vehicle to skid or pedal. Depress the accelerator pedal spin.The selector lever Never shift into reverse while the ve- must be in the “3” position.For the best compromise between fuel economy and vehicle performance, you should upshift or downshift at the following speeds: 2006 YARIS HATCHBACK from Aug. ’05 Prod.
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