New Thoughts on Fresh Merchandising

Improved growth and profitability are prime objectives of retailers today. However, achieving these objectives is a real challenge. With less population growth, there are fewer stimuli for retail sales gains, so real increases must come from market share gains.Consequently, competition for the consumer's dollar is fierce. Not only is there the traditional intramarket competition between big chains and independents, but drug, food and discount operations are all vying for the customer's general merchandise business. Many retailers choose not to compete on a price basis. However, the very presence of off-price retailing raises price awareness among consumers and challenges all retailers to strengthen their price/value image.Advertising continues to be an important tool in building images and attracting customers. But some reports have estimated that 85% of customers who enter a store have not seen its ads. Clearly, advertising alone can't move merchandise. It takes a coordinated merchandising program supported by advertising, packaging, display, signage and promotional labeling.The effective in-store merchandising program brings everything together at the "point-of-payoff," where the buying decision is made. This marketing strategy gives the retailer the opportunity to turn a shopping trip into an event that incites the shopper to buy -- and buy more, stimulating item movement and increasing average transaction sizes.In-store displays and signage can act like "traffic signals" to guide shoppers to advertised specials and new merchandise. They also direct them to higher margin goods or draw them down low-traffic aisles.Tremendous opportunities exist to influence consumers at the point-of-purchase. Most studies suggest that in supermarkets, shoppers make up to 70% of their product purchase decisions in-store and within 3 feet of chosen products. Generic and private label products typically have an even higher in-store decision rate, indicating that shoppers are open and willing to consider nonbranded alternatives if there is a perceived savings.Retail price promotion is one of the most common forms of in-store merchandising used to advertise specials. Frequently overlooked and often underused, the price label is perhaps the most critical part of the merchandising package. It catches the customer's eye at that very moment when a buying decision is being made. And, if used effectively, it alerts the shopper to the merchandise price/value.In effect, the promotional label builds on the retailer's other advertising and merchandising efforts to close the sale, frequently prompting the shopper to buy more than initially planned.Supermarket vendors were among the first to recognize the promotional power of labeling. A number of years ago, on-site tests and selling experiences showed that the use of fluorescent "promotional" labels with boldly printed messages moved merchandise off the shelf faster than conventionally priced items.Although item pricing in general has decreased over the past few years, more and more retailers are applying promotional message labels. A bright eye-catching message label on products at the shelf can differentiate private brands, promote slow moving items, move excessive inventory and highlight new items. Loyalty card program discounts can be made more visible with the addition of a label on the product identifying it as an advertised special. A promotional label can also be used to provide additional product information to consumers that may influence their purchases. Meat, deli and bakery departments use this practice to enable the consumer to quickly identify product attributes such as:specific cuts of meat (thin, thick, seasoned, marinated)type of meat (pork, ground beef, chicken)type or prepared sandwiches, salads or pizzas (turkey, ham, ranch, cheese)type of bread (Italian, French, rye)special dietary needs (low fat, low salt, sugar free).Suggestive selling can influence the shopper and increase sales, even if the product is not discounted. A bright promotional message label applied in-store can give the impression of deeper discounts, last-minute bargains and temporary price reductions. The increase in case-ready merchandise prepared outside the store provides a greater opportunity to utilize promotional message labels to create a "touched" look. The simple addition of a brightly colored promotional message differentiates the individual store and creates consumer confidence that someone inside the store is checking and enhancing the otherwise generic product.

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