Stepping into a retail store, you may spot that some products appear to be more noticeable than others. You may also note that the outfits of mannequins in shop windows change from time to time. Have you wondered why they keep playing that one song so often, or why ice cream freezers suddenly turn up right at the front during summer? These are all strategies of retail merchandising that vendors use to attract customers. With the help of these strategies, companies use psychology to maximize profit. This article will present five practical merchandising tips that will help you boost your sales.
Visual merchandising is a technique that companies use to make certain products in a store look more eye-catching and noticeable. For that reason, visual merchandising uses many different methods to influence the customers, starting from the moment they set foot in the store. Everything, from the physical location and color contrasts to the positioning on the shelf to the lighting, is a mix of visual cues that add to a customer-focused environment.
Visibility plays a massive role in the decision-making process of customers. Placing products in specific aisles or counters is a calculated move to attract customers.
Neuro-marketing is a science that studies how companies influence the decision-making process of buyers. Here is a summarized visual merchandising guide with tips based on the findings of neuro-marketing.
Cross-merchandising is an extension of visual merchandising. It is when shoppers are encouraged to buy items that go well together. For example, a grocery store can place tomatoes next to garlic and basil, so buyers may consider making a bruschetta buying all the ingredients they need. Likewise, a retail store can hang an evening gown and a purse in the same style next to each other. They know that people shopping for an evening gown might also be looking for a bag to match their look. Thus, cross-merchandising not only entices shoppers to make more purchases but also saves them time.
Consistency is good because changing the store’s layout too often will confuse customers, especially loyal ones. However, keeping products in the same place for too long may bore shoppers and make the interest fade away. Holidays and changing seasons are good excuses to push products to the shop windows. Halloween or Christmas decorations and relevant items evoke customers’ curiosity, as many of them are out in the city looking for presents before the big day. Similarly, when buyers come into a retail store, they want to see lighter clothing as summer approaches, rather than sweaters and mittens.
A brick-and-mortar store has the upper hand when it comes to feeding all human senses. Earlier tips have already shown how to appeal to the eye. In-store customers can also touch the goods before purchasing them. The rest of the senses are also crucial to ensure a customer-friendly environment and strengthen customer engagement.
Experimenting with various strategies is no good if you don’t track them. In the merchandising business, only with the help of thorough observation and calculations do tests show success or failure. There are multiple KPIs that managers can calculate and see if they correspond to their desired outcome. Examples of such are the amount of sales generated from a specific hour or the number of customers returning in a month after changing the store’s layout. At first sight, this data may not seem important, but these numbers hide a lot of information about performance and progress.
This metric shows how effectively physical stores use their area to generate maximum revenue. It is tightly connected with the store layout and helps to identify which locations attract the most traffic. Calculating sales per square foot every time you change the store layout can help determine which option facilitates the highest sales. It can also give insights about potential focal points to draw attention to particular products.
An increased customer flow already means that your store’s popularity is going up. But how many of those visitors actually end up purchasing something? The conversion rate shows precisely what percentage of those customers approach the checkout counter not empty-handed. Real-time figures indicate current performance, and managers can concentrate on increasing this number.
After converting first-time buyers, the next step should be to encourage these customers to return and make a purchase again. Retention rate is a metric that shows how many of your customers are loyal. Keeping an eye on this metric is crucial since a study by J. Bowen and S.-L. Cowell published in 2001 has shown that with a 5% increase in loyal customers, profits go up by 25-125%.
Pass this data to your data analytics teams (and if there is none, consider hiring or outsourcing). With the help of modern software, data analytics can provide accurate results of the research.
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