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Merchandizing: The Last Mile Of Retail Sales

Nubox_Facade When a shopper is filling their cart, what makes them grab the 2-liter bottle of Coke vs. the 12-pack of Pepsi? Why pick up the Lays rather than the Golden Flake? Is Frosted Flakes really that much better than Sugar Smacks? What is the real criteria used to decide between Oscar Meyer and Ball Park Franks? All of these companies spend millions, if not billions of dollars in advertising their products to the public. They all have well-staffed marketing departments filled with very smart people. The products, themselves, are very similar to their top competitors. Most people couldn’t distinguish them by taste or nutrition. So why does one end up in the shopping cart and not the other? The key is merchandising. That is the last mile of the purchasing sales process. Your business can spend a fortune on R&D, come up with the best solution to a common consumer problem, and get it into the largest retailers, yet still not sell as well as lesser products. That is because the last few checkboxes were left unchecked. Failing to understand the importance of merchandizing will render all other marketing efforts useless. It is time to make merchandising a bigger part of your budget, and here are a few things on which to focus:

Display Marketing.

How are your products displayed in the store? Are they on the shelf next to other undifferentiated products of the same type? There’s your problem. The buying decision is left to chance. At best, your chances are 50/50. But that is highly unlikely, as there are many products and brands competing with yours. If you’re lucky, 1 in 10 people who buy that type of item will pick up yours. That is not going to pay for the shelf space. It’s time to sweeten the odds. You need an end-cap, or some other major display that isolates and differentiates your product from everyone else’s. This is especially important if your product is not well known to shoppers. They need an opportunity to see it, and a reason to take a second look. If you are new to this, it is probably best to have a professional service design and build your cardboard display for you. If you want to go it alone, there is a lot you need to know. Consider this expert advice on color: Incorporate color psychology. The brain processes yellow the fastest of all colors, so it draws the most attention. A green background on your end cap suggests health but is a bad idea for a meat display because it implies rotten rather than fresh. Blue is ideal for fun food like snacks. Warm colors like red and orange imply heat, which is not good for frozen or refrigerated products. Avoid muted earth tones in the food-design biz, and be aware that although bright primary colors are great for kids' displays, they can scream "cheap" to adults. …and that is just one aspect of display marketing. You might want to leave it to the pros.

Packaging.

We do judge books by their cover, and we do judge products by their packaging. It is not a matter of whether we should. Who cares? It is about what we do. If you want your product to sell, it has to be packaged to sell. Consider two packages of breakfast cereal side by side on the shelf. They are exactly the same in every way that matters, including the price. You are not married to either brand. One is in a nicely designed box. The other is in a nondescript, clear plastic bag. I don’t even need to finish the question. You have already grabbed the box and are on your way to the register. The same dynamic is at work when looking at two boxes, but the decision is more subtile. Now, you are comparing two nicely designed packages. Make no mistake about it. These companies are fiercely competing with their packaging. Some companies spend more on the packaging than they do the product. That is because they know that if the packaging doesn’t win the battle of the shelf, the product will not sell. Your packing is the last part of the merchandising process over which you have direct control. Make it count.

Price Tags.

Finally, it is imperative that your product has a clearly marked price. No one wants to waste time in the aisle hunting for a price. Having the lowest price will not matter if the person cannot find the price. Clearly, the lowest price is not what wins at the end of the day. If it was, then the only products that sell would be the cheapest in a category. That is clearly not the case. People do not mind paying a little more if they like the value proposition. But they do want to know what they are paying. The worst thing is for them to take your item to the register and be unpleasantly surprised by the price. If you have any control over the in-store labels, make sure that it is easy for a person to see the name of the product and the price. The price is the main bit of information people are after. The rest should be easily displayed on the packaging anyway. Better yet, if your item has a fixed price not subject to discounts every other weekend, print it on the packaging. This accomplishes two things: First, no one ever has to wonder about the price of your item, even if it gets moved to the wrong spot on the shelf. Second, there will be no need for stickers that are inevitably placed over some other bit of important information. At the end of the day, merchandising is about marketing, and about sales. You never stop selling your product. Merchandising is a way for you to continue that sales process all the way to the shopping cart and the register.

Young Upstarts is a business and technology blog that champions new ideas, innovation and entrepreneurship. It focuses on highlighting young people and small businesses, celebrating their vision and role in changing the world with their ideas, products and services.

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