retail merchandising war

Winning the Retail War with Retail Merchandising

Retail Merchandising helping Retailers to Win the Retail War.

Retail Trench Warfare
Retail Trench Warfare

In a recently published blog titled “Winning the online retail war with retail merchandising“,  Marti Tedesco and Lauren Freedman mount a convincing argument that “retail is all about field merchandising”.

And as I mentioned in my previous blog, they also point out that “Webrooming, the act of searching online and then buying in store, is now more prevalent than showrooming“.

The focus of their attention is on making online stores more appealing with products as easy to find as they are in a well merchandised bricks and mortar store. However, there are many issues that e-tailers don’t care about but are critical in the real world where retailers face many obstacles in creating this ideal world situation.

The first obstacle is whereas e-tailers can freely place images of products pretty much wherever they want in their virtual stores, real-world retailers need to stock shelves with physical products. And if a product is not on display or “Out of Stock” due to poor field merchandising, the manufacturer and retailer lose out on sales.

The next obstacle is that whereas e-tailers use session cookies and other sophisticated tracking techniques to mass-personalize the layout of items and promotional offers they serve up in their web pages, retailers or merchandisers have to manually place and tag each product correctly.

iBeacons and other technologies aside, to be successful retailers (and manufacturers) still need to ensure that products are correctly placed and displayed on a continuous basis with in-store field merchandising that delivers actionable data. The cost of not doing so has been pegged at an astounding $800 B revenue lost globally to out of stocks (Gruen & Corsten 2008), $93 B revenue lost in the USA to “Out of Stocks” (RIS News/IHL Group Store Systems Study 2008) and $20 B lost manufacturer revenue due to planogram non-compliance (NARMS).

This leaves the retailer between the proverbial “rock and a hard place”. Faced with razor-thin margins and the need to manage low inventories on the one hand and keeping stores fully stocked with precise items placements on the other is like walking a tight-rope.

Expensive POS scan data can identify issues retrospectively, but low/no scans just indicate that products are not moving through the register as expected and do not identify and notify of what the root causes are – and worse still this method is reactive at best.

At the end of the day the essential ingredient to winning the retail war is indeed retail merchandising, but by experienced merchandisers that are well equipped with a real-time product performance reporting system and who are championing CPG items in physical retail stores.

And until someone can come up with a better mouse-trap, there’s no other sure-fire way to improve retail product performance other than to hire good field merchandising staff to champion consumer packaged good in retail stores.

By Skemazer Greg

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