MERCHANDISING STRATEGIES THAT INCREASE SALES
Merchandising strategies are a valuable component of any retailer’s success. Merchandising strategies should vary by category and sometimes by segment depending on the overall objective for the brand, category, and retailer. Each strategy should be carefully planned to target a specific objective like increasing your foot traffic, inviting new customers to try your brand, developing loyal committed customers, increasing sales, and making customers return to your store.
Developing and managing merchandising strategies should be a collaborative effort shared between the retailer and the manufacturer. Manufacturers are the true experts in their brand’s categories. A smart retailer should take full advantage of the manufacturer’s knowledge and expertise to help grow the category and their sales.
Merchandising strategies include a variety of components like the pricing, promotion, product placement, ad support, consumer education and a lot more. Together, the different components help achieve the retailer’s primary goal.
Here are some tips for Effective merchandising strategies:
- Traffic Building: High volume share, frequently purchased items, high percentage of sales. This strategy focuses on drawing consumer traffic into the store and/or into the target category.
- Transaction Building: Higher ring/transaction size, and impulse purchases. This strategy focuses on increasing the size of the average category transaction.
- Profit Generating: Higher gross margin and higher turns. This strategy focuses on the ability of the category to generate profits. Margins can be higher in this area due to the value added, higher-quality products in these categories.
- Cash Generating: Higher turns, frequently purchased items. This strategy focuses on the ability of the category to generate incremental cash flow.
- Excitement Creating: Impulse, lifestyle-oriented, and seasonal items. This strategy communicates a sense of urgency or a limited time sensitive opportunity to the consumer.
- Image Creating: Frequently purchased, highly promoted, impulse, unique, and for seasonal times. This strategy communicates an image to the consumer in one of the following areas: price, service, quality, specialty items, or assortment.
Manufacturers are committed to helping the retailer grow sustainable profitable sales in their category. This symbiotic relationship adds tremendous value to both parties and helps the retailer maintain a competitive edge across all their markets.
Do you have any tips for us for effective merchandising strategies? Leave your thoughts and comments below.