How merchandising system helps manage the shelf space effectively

Today, as never before, retail is subject to the everchanging desires of the consumer. Approaches and business strategies are transforming; a real revolution is taking place – the product is not the end goal anymore; businesses are striving to capture emotions and provide customer experience. A modern retailer must be flexible, adapt quickly to current realities, and apply the latest technological solutions. 

This article will cover the essential steps of choosing and installing the best merchandising system for your business. It will help you scale the turnover, minimize the number of lost sales, gain complete control over the flow of customers, manage all retail outlets better, and quickly create planograms and equipment of different formats.

What is modern merchandising, and why does your business need it? 

The customer is becoming more selective and is more prone to make impulsive decisions; they are no longer satisfied with the sites, stores, and the experience he is used to receiving. Meeting customers’ needs today does not stop at selling a product – the customer wants to get experience, emotion, mood, and memory together with the goods. The consumer actively turns to new technologies, interactivity, online and mobile shopping, and e-commerce. 

The modern customer does not want to stand in line - they want to pay by scanning the goods with their smartphone and preferably spend only a few seconds to do so.

Many stores actively incorporate new technologies and interactivity into their marketing strategies and merchandising guides. For example, they install augmented reality installations and displays triggered by smartphones, adapt their signs to weather conditions, use recycled materials to support sustainability trends, and actively use Big Data.

Merchandising today is a whole philosophy that subordinates the relationship between the brand, the product, and the store and the customer.

Modern merchandising is responsible for communicating with the customer for his emotion. With merchandising tools, you tell a story to your customer, and he becomes a part of it. Have you noticed how trendsetters and global retail leaders have begun to involve artists and art makers in-store decoration and fashion giants experimenting with “humanized” mannequins? Food chains change their signs from happy people eating ice cream on a sunny day to a cozy cup of coffee when it rains. 

They want the customer to think, “Wow, that’s an excellent idea. I will take down a story for my Instagram stories and share it with my friends”. Everyone is chasing emotion, and merchandising is the primary driver in that race.

What does it take to manage merchandising? 

A modern retailer must be able to adjust to the desires of clients as quickly as possible, predict market trends, and quickly adjust. Flexibility is the main quality of a retailer in the modern world.

Unfortunately, not all retailers can successfully adapt at such speed, mainly due to their internal business processes. It is necessary to go step by step, and the second most crucial step is to understand where you are now and where you want to be tomorrow.

Many companies still draw up planograms by hand or using Excel in the head office, drawing them as diagrams. The planogram turns out standardized for all stores since it is physically impossible to consider, for example, the width of shelves at each retail point. It’s important since you need to understand how many facings of SKUs you could place on the shelf.

Related: Visual Merchandising in the Store. Retailer Rules

If your business is still using paper reports on the planogram realization, and your merchandising managers are physically touring retail outlets, checking, and controlling signage and layouts, the system is rather fragile, inflexible, and slow. The number of routine tasks overtakes the opportunities to change the business processes as a whole. Likewise, planograms are time-consuming while not yielding results that would justify them. 

Reporting in manual merchandising management is another complication. Much time and effort are spent on reporting and analyzing the effectiveness of merchandising, so much so that companies often neglect the importance of analytics, thereby taking away their opportunity to grow, develop, and be a strong market player. 

Some companies delegate the functions of merchandising and display management to outsourcing agencies, motivated by savings in money and time. Outsourcing the actual management and control of merchandising to another company can help reduce personnel costs, but there are several pitfalls to be aware of. 

• A third-party contractor who does merchandise and display work won’t do the assortment, inventory updates, and controls, which are interlinked. 
• Controlling the contractor’s work is sometimes more difficult and time-consuming than the work within his company (especially if we are talking about large networks with outlets in different cities - not every agency has the same geography of offices).
• A merchandising agency also employs manual control, which carries the downsides described above. Outsourcing the task will not improve the quality of solutions.

LEAFIO Merchandising System

Digital Transformation: Taking Merchandising to the Next Level

All cutting-edge solutions, creativity, sales growth, and successful cases in merchandising management are created with technology. The capabilities of automated inventory and display management systems are so great that the need for human intervention is minimal, and the benefits are substantial. 

For example, to create a performing planogram, you need to fill in the dimensions of trade equipment into the system and fill it in with the SKUs which were earlier filtered by necessary parameters. Then, after constructing a planogram, it can be distributed to retail outlets, and in case your company follows the merchandising business process, the system will gather real photos of planograms, and you will analyze the reports on the layout. A similar selection of routine tasks can be closed in the Leafio merchandising management system.

Leafio system is a shelf space optimization software with an intuitive interface. Having this solution, you will have an opportunity to monitor the realization of planograms at the stores, develop the planograms and equipment of different formats, create auto-layout, and analyze the sales floor (sales per foot/meter, the most and less performing zones, etc.). 

Modern merchandising management systems have a built-in 24/7 control function for employees and stores. The Leafio system lets you control any change in the layout and assortment in real-time. Flexible and adaptive reporting and analytics provide the ability to evaluate the store’s activity, the network, the manager, the category, and each product.

AUTOMATED SHELF SPACE PERFORMANCE IMPROVEMENT

Fast and intuitive design process

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Shelf management automation optimizes employees’ working hours and reduces the time on planogram management by 4 times. Now, staff can focus more on the company’s strategic development, brand, creativity, and getting ahead of competitors. Synchronization and control of assortment availability will save money and prevent the accumulation of unnecessary goods in warehouses and shelves. The cloud architecture ensures ease of use and lack of connection to hardware and office, which is especially important for remote work in today’s realities.

Do you want to increase the profitability of products’ layout, reduce the number of times company employees check the shelf per day, generate the product display regarding the turnover and stock of goods, and evaluate the effectiveness of planograms? This checklist will help you assess and measure the effectiveness of your display on critical indicators and increase sales