Merchandising Matters

Properly merchandising products around your store provides a better customer experience and a bigger profit.


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Merchandising touches almost every aspect of how you and your store conduct business on a daily basis. Merchandising matters to your customers, your team and your store.

 

Effective merchandising makes shopping easier, improves service, creates customer loyalty and promotes self-service and repeat shopping. It also makes associates’ jobs easier by making retail selling more rewarding and providing time for them to develop new skills.

 

Customers Expect Good Merchandising

Big-box pet stores, mass merchandisers and even grocery stores practice disciplined merchandising strategies. As a result, customers are accustomed to shopping in stores that practice good merchandising.

 

Turning one-time shoppers into regulars is critical to your store’s success. Competing for consumers’ pet product dollars demands that you bring customers back more often and give them reasons to buy more each time they visit.

 

Experts on store loyalty say that customers who had an enjoyable shopping experience, visited your store recently and buy frequently are most likely to become repeat shoppers. Good merchandising ensures that they come back to your store, not your competition’s.

 

Pet owners and hobbyists decide to shop at a particular store depending on what they are looking for at the time. Discount store purchases often are driven by convenience or impulse buys; they require no interaction, education or employee knowledge.

 

Consumers shop where they are confident they can find the merchandise they want and the advice they need. Knowledgeable staff and well-merchandised pet centers create loyal customers who return to your store time and time again.

 

Merchandising Enhances the Customer Experience

Merchandising can attract customers by making shopping easier and giving them reasons to come back often and spend more money.

 

Since many customers no longer consider shopping fun, a retailer’s challenge is to use merchandising to reduce the hassle factor. A pleasant environment, clear signage and easy-to-locate and well-organized products tell shoppers that your store is committed to helping customers with their pet and pet supply needs.

 

Your team’s knowledge, experience and selling skills help customers solve problems, satisfy their pet supply wants and needs, and fully enjoy their companion pets. Effective merchandising allows associates to concentrate on answering questions, solving problems and selling related items, rather than simply directing traffic.

 

Although many customers truly need assistance, others know what they want and only need to know where to find it. Good merchandising makes the shopping experience easier for these customers.

 

Merchandising Makes Associates’ Jobs Easier

Your staff can wait on only one customer at a time, but many customers can serve themselves. Good merchandising encourages self-service shopping, freeing up associates’ time to sell higher-end merchandise or help customers who need advice.

 

Rushing around the sales floor to make small sales can be frustrating for your team members. Effective merchandising frees up time for activities that challenge their selling skills. Self-service displays give associates time to handle other duties, to learn new skills and take on increased responsibility.

 

Merchandising Improves Store Profitability

Experts report that almost 70 percent of buying decisions are made after shoppers enter the store. For pet centers, this means that a customer who comes in for a $30 bag of dog or cat food could walk out with $51 worth of products.

 

The longer customers are in the store, the more they tend to purchase. By increasing the average ticket without increasing overhead expenses, merchandising makes critical contributions to your store’s bottom-line profitability.

 

Merchandising can also suggest related items at the point of sale and impulse items throughout the store. Merchandising should complement your team’s sales efforts by:

 

• Organizing the store

• Suggesting product ideas

• Reminding customers of forgotten items

• Promoting special buys and seasonal items

• Providing self-shopping information

 

Merchandising can also help you make strategic pricing decisions that protect your store’s operating margins.

 

• Setting everyday pricing. Customers assume that merchandise featured in a promotion display or on an endcap will be priced lower than items found on the shelf and buy accordingly. Studies show that simply moving a product from a shelf to a promotional location can double or even triple sales, even without adjusting the item’s price.

•Designating loss leaders. Loss leaders are products that are priced at a deep discount (at a minimum profit margin but not below cost). If merchandised to encourage sales of products that are not discounted, loss leaders can result in a greater overall profit for the store.

For example, merchandising advertised loss leaders in an inconvenient part of the store requires customers to walk past other, higher profit margin items to get to the advertised special. Cross merchandising loss leaders with full price products also increases overall profitability.

•Using price signs strategically. Prices have a psychological impact on shoppers. Research shows that customers tend to focus on the dollar amount and ignore the cents when making judgments about price differences.

As a result, retail prices are often expressed as $19.99, with the expectation that the customer will read this as $19 instead of $20. A merchandise display marked $19.99 should sell more and net more profit than a display priced $21.99.

 

Merchandising Increases Sales Floor Productivity

Retail productivity improves when the same square footage and number of employees generate more sales. Good merchandising affects virtually all measurements of retail productivity, including:

 

• Average transaction

• Sales per square foot

• Gross margin per square foot

• Sales per employee

• Gross margin per employee

• Payroll costs as a percentage of sales

• Payroll costs as a percentage of gross margin

 

Marketing gets customers into your store and merchandising encourages them to purchase now and return again later. Gathering information about key metrics for your store helps make marketing more effective by providing guidance on what items to promote, when to promote items and how to merchandise the items on promotion.

 

To maximize the return on your store’s investment in ads and other marketing, consider how merchandising impacts the following factors that influence sales floor productivity:

 

•  Inventory turns by department, product line and item

•  Peak selling periods for each department

•  Customer traffic patterns

 

No matter how small, independent pet stores can take advantage of effective merchandising techniques that lead to additional sales. Using merchandising strategically can also make your team’s jobs easier, improve profitability and increase sales floor productivity.  PB

 

Stephanie A. Kaplan is the director of online education for the Pet Industry Distributors Association. She manages PIDA’s free online training program, Pet Store Pro. Since it was first launched in 2008, over 6,700 retailers have turned to Pet Store Pro for brand-neutral training on critical skills for associates, managers and owners. Pet Store Pro is free to qualified retailers; visit www.petstorepro.com to register and begin using the program.

 

This article was adapted from “Merchandising Fundamentals” and “Advanced Merchandising,” two of 29 chapters available as part of Pet Store Pro’s online training. “Merchandising Fundamentals” covers the importance of operational merchandising to stimulate increased sales and repeat visits. “Advanced Merchandising” focuses on using visual and impulse merchandising to intrigue customers and increase sales. Both chapters include downloadable worksheets to help employees follow merchandising best practices, evaluate your store’s merchandising, identify merchandising opportunities and develop an action plan.

 

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