6 Merchandising Mistakes Retailers Should Avoid

Merchandising is the process of presenting and designing an effective store layout of products in order to attract the attention of customers. This is a set of actions that stimulate customer loyalty to a brand, product, or store and help increase profits.

Merchandising helps to highlight the products on the shelves. Do everything to draw customers’ attention and make your product shine among the others and become necessary for customers. This is a specific tactic to help get products straight into shopping carts. However, there are many factors that can hinder sales growth. Here are a few merchandise mistakes that can affect a store's success rate that retailers should avoid.

Mistake #1: Misuse of The Store Sales Area

No need to fill with equipment every square meter of space. Improper placement of racks, showcases, etc. creates obstacles for buyers while moving in the store. Your products need space. Make sure your aisles are wide enough. You should keep enough space between displays and racks so that customers can look at the product and at the same time move away from the shelves and not bump into anything. Don't lay out your merchandise in such a way that it could easily fall to the floor.

Mistake #2: No Price Tags

Do all the products have price tags, especially promotional products?

When there are no price tags or they aren’t relevant, that leads to a drop in sales. The price should be clear and visible. The price tag should be placed next to the product on all shelves and showcases. After all, it is often the price that determines the buyer's choice. When you make changes in the layout - do not forget to update the price tags.

Mistake #3: Layout Problems

Poor display layout on shelves and other showcases. Lack of signs for promotional goods. These things influence sales and whether you can attract the customer’s attention.

Take care of OSA - on-shelf availability of products. Are all SKUs on the shelves? Or are they still in stock? What will your repeat customer feel if he doesn’t find the product he needs? Disappointment. And the next time he goes to your competitor, you will lose a client and sales.

Another case. Imagine, the customer finds all the necessary products next to the checkout immediately after entering the store.  So he quickly buys and leaves the store without wasting time walking around the store. The buyer is fine, but we can’t say the same about in-store sales. If a customer walked around the entire trading floor in search of a product, perhaps he would buy more and make an impulse purchase. So, in order to make customers bypass the entire store, the goods should be placed according to the principle of the golden triangle: (the vertices of the triangle) checkout - the store entrance - the department of interest (for example, dairy or bakery). The activity of buyers there is the highest. And the wider this area is, the longer the path to the checkout. So it is likely that a customer makes an impulse purchase. Therefore, the products of greatest demand are usually placed at the end of the hall, so that the buyer bypasses the entire sales area of ​​the store.

On-Shelf Availability Problems

A problem may arise when the store manager makes independent decisions without the consent of the office and fills the empty spaces in the layout with any other product, except for the one indicated in the planogram. In this case, the client, who doesn’t find the right product on the shelf, considers this a stockout. Although in fact, the product is in stock, the manager placed it on the wrong shelves and far from the main assortment. The layout is chaotic, and the product falls into the wrong group. It can also lead to lost sales.

Mistake #4: Too Much Merchandise or Empty Shelves

The products on the shelves of the store should be placed in a simple and convenient way for the buyer to get them without hitting other goods that may fall. Merchandising principle of two fingers will help. When the product is on the shelf, there should be a 3-4 cm (2 fingers) distance from the top edge of the product to the edge of the shelf. With a shorter distance, the goods will be difficult to pick up with one hand.

To avoid shelves with too much merchandise, do not lay out all the goods on one shelf. Allocate a place for each product. Place high-margin merchandise in the foreground, in the center, and in places where there is more room and space. Also, group products by departments and categories so that customers can always find the right product with minimum efforts.

Or the opposite situation, empty shelves are another serious problem for the merchandiser. The lack of goods on the shelves is considered by customers as a store on the verge of bankruptcy and closure.

Analyze sales and track stocks to order the necessary products on time and prevent empty shelves.

Mistake #5: Planogram Non-Compliance

The planogramming department makes great efforts to create the layout on the planograms. The correct implementation, execution, and compliance of the planograms help to achieve merchandising goals  - drawing attention to products and increasing sales.

Therefore, planogram compliance is very important. The central office of the chain control how the layout is performed according to the planograms. This process is configured in the PlanoHero service. With the help of the service, the store manager receives planograms from the planogramming department. Then he forms the layout on the shelves according to the planograms. And sends photo reports on planogram execution using the PlanoHero Layout App.

The planogramming department checks photo reports in the PlanoHero service and, in case of errors, sends the planograms back to the store for execution.

Mistake #6: Ignoring Your Customers Needs

To sell products effectively, you must know your customer's needs. Analyze general product presentation trends and compare them to your customers' local needs. Here you will find out which products to pay more attention to. Next, take care of the availability of best-selling goods. Make your clients’ shopping experience easy and enjoyable.

Do you want to know your buyers’ preferences and behavior? Analyze sales. So you find out items of greatest demand and days and hours of the highest buyers activity.

Do not forget about complementary products that can be placed next to the main assortment. Analyze what products your customers usually buy together and use this information to increase the average check. This cross-merchandising approach will help you meet customer needs and increase additional sales.

Conclusions

Merchandising is a process focused on ensuring the effective layout of goods. Avoid future mistakes and make a display that attracts more buyers and increases sales. Here you need an accurate setup of the entire process, from store fixtures placement to the implementation of planograms.

Mistakes can be prevented if the retailer takes care of setting up important business processes:

• merchandising process;
• planogram control;
• layout and sales analysis;
• training of specialists;
• effective communication between the office and the stores.