Happy with your brand sales? If not, blame your merchandising

I’ve never mentored, talked to, or worked with a brand who told me they did not want any additional sales.

One of the first lessons I learned early in my career was that nothing happens until someone buys something. Shelf placement and distribution are the two most fundamental predictors of a brands success or failure. It is the primary responsibility of every good sales person, broker, or distributor.

This is one of the main reasons the practice of category management started. Its mission is simply to reduce out-of-stocks, maximize promotional efficiency, improve inventory efficiency, and increase the sales and profits of a brand. Category management has now evolved to fully understanding shopper/consumer buying habits and helping brands meet consumers’ needs. Merchandising is the cornerstone of any good category management strategy. It includes segmenting products into categories that consumers can easily shop, product assortments focused on meeting shoppers needs, and shelf management strategies that organize products to make shopping convenient and stress-free.

Segmenting and product assortment

Segmenting breaks up the category to make it easier to shop by size, style, quality, type, color, flavor, scent, etc. For example, health conscious parents will find it easier to shop the cereal category if it is segmented by adult and children products, health focused/sugar/other items, hot and cold cereal, etc.

Another key component of category segmentation is product assortment. Customers want the most popular items available in the market in addition to specialty or niche items that meet their specific needs. A retailers goal is to have a broad assortment without too many duplicates. Customers make judgments about retailers based upon their product assortments: too few items in the category and they perceive the assortment to be poor while too many items will confuse shoppers. The proper mix includes a balance of top-selling items as well as specialty items that differentiate the retailer from their completion.

Shelf Management

Shelf management includes item placement and merchandising on retailer shelves. Specifically, it helps retailers maximize their sales per linear foot, increase customer shopping basket size, develop shopper loyalty programs, drive consumers into their stores, and give the retailer a competitive advantage in their marketplace. A retailer’s merchandising strategy will communicate their marketing strategy to shoppers.

Effective self-management strategies are used to communicate a consistent message to your customers highlighting your commitment to meet their needs. It differentiates you from your competition. Proper product placement is critical. Consumers want stores that are friendly and easy to shop with fair prices.

It is up to the brand to help retailers properly place their products on their shelves. Brands also need to work closely with retailers to ensure that each item has enough holding power (items available for sale on the shelf) to support sales and avoid out-of-stocks.

A well thought out merchandising strategy is the foundation to every brand’s success.

What strategies do you use?

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By |2017-09-23T16:49:21+00:00May 18th, 2017|Merchandising Effectiveness|

About the Author:

Daniel Lohman, CPSA is Strategic Advisor in the CPG and Organic Industry. His company, Category Management Solutions (CMS4CPG LLC), provides innovative ideas, actionable insights and strategic solutions for companies interested in gaining a significant competitive advantage. He assists companies in expanding their retail distribution and improving their merchandising. His extensive knowledge and expertise reaches far beyond traditional category management and has earned him recognition throughout the industry as an expert, speaker, trainer and thought leader. Daniel can be reached at Dan@CMS4CPG.com. Connect with me on LinkedIn.

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