Visual Merchandising in the Store. Retailer Rules

How does visual merchandising help retailers increase their profits? Do you know how long it takes for a customer to figure out if they want to make a purchase or not? Ten seconds. It takes the customer that long to receive the first impression of the product, which always subconsciously influences the purchase. And everyone knows that you can only make a first impression once.

The human brain is a visual learner, primarily processing the picture it perceives, receiving about 80 percent of the information. Further, in descending order, information from other channels is processed:

• auditory (hearing);
• tactile (touch);
• taste (gustatory);
• olfactory (smell).

Today, we will talk about how visual merchandising standards affect the consumer and encourage them to buy a product.

The visual techniques and effective tools that we are going to talk about belong to the merchandising area with the same name. As usual, let's start with the theory.

What is visual merchandising?: The basics of proper display

Visual merchandising in a store is a set of marketing techniques, principles, laws, and tools for placing and displaying products aimed at stimulating sales growth.

The standards and rules of visual merchandising are a broad concept that covers not only the display of products directly on commercial equipment, but also comprehensively considers a store/space/chain as an object of interaction with a consumer. Some sellers mistakenly believe that merchandising and its rules are just a “beautiful” display of products on the shelf as they see it, so programs and software for merchandising are just a waste of money. That is not the case.

There is a science behind visual merchandising that helps build relationships with the customer and to hold the customer’s attention – from acquaintance to motivation and brand loyalty.

Merchandising rules apply to everything from price tags and product nameplates to the interior color scheme and the showcase lighting brightness. Knowledge of effective laws of merchandising implies knowledge of the basics of marketing, psychology, color concepts, the laws of sales of certain groups of goods, and so on.

To sum up, the main functions and tasks of visual merchandising in a store are:

• to encourage the customer to notice the product;
• to set a strategically necessary, simple and predictable retailer trajectory of the movement and behavior of a customer in a store;
• to induce positive emotion, a pleasant association, an atmosphere of comfort;
• to drive a purchase;
• to become one of the drivers for customer loyalty improvement.

Visual Merchandising Rules

How do you entice buyers using the principles of visual merchandising to evoke their positive emotions, drive the purchase of a specific product, and build loyalty to the manufacturer or your brand?

Let’s take a look at a few basic rules of visual merchandising.

1. Always remember the “golden triangle” and right-hand traffic

Any lecture on merchandising traditionally begins with the law of the "golden triangle", which underlies all the rules and techniques of visual merchandising.

Its essence is to place the most popular, attractive, and best-selling products in the farthest corner of your store. Have you noticed that supermarket chains always place the most popular, basic, fast-moving consumer goods (eggs, milk, bread) in the farthest corner of the sales floor, so that to get to them the buyer has to go around the entire store? In the other corner of the "golden triangle" is the checkout area.

Having come for bread, customer N should make his way around the store and back to the checkout area. The customer’s mind is already focused. Customer N will very likely make a series of unplanned purchases on the way to the bread, filling their cart with various everyday essentials, strategically placed around the display area.

Except for conventional bread, eggs, and milk, retailers often place visually pleasing stands and zones in the area of top-selling items — for example, a bakery with fragrant croissants and pastries, bright (and well-lit) fresh fruits and vegetables. Thus, an additional incentive is created for the customer to walk around the entire retail space.

According to product merchandising rules, the most slow-moving and the least selling products are at the entrance group (that is, the zone along the hypotenuse of the triangle, to the left and right of the entrance). Having studied customer psychology and traffic flow through numerous focus groups, surveys, and analyses, marketers have found that a consumer entering the store hardly pays attention to the goods at the entrance, but will turn right and head immediately deep into the store, counterclockwise. Accordingly, merchandisers do not recommend placing strategically important best-selling products at the entrance group – leave them for the display area.

The checkout area is one of the most profitable, “hot” and filled areas of the store. The rule of classic merchandising is to place impulse products for spontaneous purchases in the checkout area. These can be products like snacks, magazines, candy, accessories, or gift cards you decide to buy to indulge yourself while waiting in line. Most importantly, these are inexpensive goods in small packages. 

A good trick used by a large international cosmetics retailer is to display travel kits and miniature testers of basic products, which are much cheaper and accessible to more customers, in the hot checkout area and the customer queue zone.

Related: Convenience Store Merchandising

2. Use smart lighting

The first function of lighting in the store and sales floor is to “pave” the path for the customer to wind their way around the store.

Since about 80 percent of shoppers always move around the perimeter of the retail space, the retailers additionally highlight the lines or stands on the trading floor, stimulating the customer to pay attention to them. Spot accent lighting is used to highlight a product or group of products (for example, seasonal or new products).

The second function of lighting as a visual merchandising tool in a store is to influence and affect the psyche of the buyer. Light has long been proven to create emotion and mood, both positive and negative. For example, warm colors evoke associations with warmth and sun, and cold ones with frost and freshness.

Marketers take advantage of these patterns – that is why they recommend highlighting bread or cheese, for example, with warm lighting and to never use cold fluorescent lamps. The latter falls with a greenish color on the product and can be unappealing to the customer.

Lighting in the sales floor in visual merchandising

Cold fluorescent light, on the contrary, plays great for gastronomy: bluish and white emphasises the freshness of fish and dairy products. Neutral backlight is suitable for fruits and vegetables, while excessive backlight colors can create dissonance and reduce sales. 

Similar principles of visual merchandising and lighting selection rules basically exist for all groups and categories of goods – from household appliances to cosmetics and home furniture. So, for example, sellers of household appliances, plumbing and electronics hardly ever use warm lighting in the store interior, because appliances exposed under warm yellowish light visually give the impression of being used and outdated.

The third, no less important function of lighting on the sales floor is to attract the attention of the customer to a particular item/product by highlighting it against the others. This classic visual merchandising technique is used by jewellery stores. The jewellery store showcase has two types of lighting – soft background color for products along the showcase perimeter and an active bright spotlight directed at the main product in the center.

So, the lighting of the retail space and product placement is a very important element of visual merchandising. With the help of well-chosen and planned lighting, you can achieve the following goals:

• to help a customer navigate the sales floor, find the right product, and “suggest” the products worth paying attention to;
• to create a store atmosphere, evoke pleasant associations for the customer, conducive to making a purchase;
• to focus the buyer's attention on a particular product

3. Group the products

Retailers who neglect merchandising rules and sales performance analysis make the same mistake. They group a lot of different categories, purposes, and prices of goods in one place. In their opinion, this is the best way to present a wide range of products. Others, when grouping goods, are guided by their own ideas that rarely correspond to what the customer wants.

Experts recommend that retailers be guided by principles and logic – for example, by purpose, brand, price category, weight, size, seasonality – when grouping products on the shelves. Moreover, usually, each group of goods has subgroups according to different characteristics.

Visual merchandising. Product grouping example.

The principles and characteristics of the product grouping must be carefully thought out and analyzed. There are cloud systems for analyzing demand, sales, inventory, and merchandising management. They allow for prioritization and product grouping rules, construct a display planogram according to these features, analyze the results and generate reports. The use of such systems is much more rational and financially profitable than the recruitment and constant expansion of marketing and merchandising teams.

4. Control the use of POS materials

No matter how much retailers would like to attract the attention of customers to various promotions, you need to know when to stop using POS materials.

The laws of visual merchandising state that no more than 7 POS elements (price tags, banners, lights, signs, and so on) per shelving rack or showcase should be used. Otherwise, the customer gets annoyed by the abundance of information, which makes it difficult to concentrate on any of the goods.

Do not forget about the visual design of POS materials as well — they should be made in the brand/store style, in harmony with the interior and design of the room. The tone of voice of promotional messages should reflect the values of the retailer or brand. Price tags should be up-to-date and accurate. Otherwise, the client will be annoyed, and their loyalty will be lost.

So, we have looked at some basic rules, laws, standards and goals of visual store merchandising that should be considered and put into practice.

To get the most out of merchandising, a retail chain needs to take into account data-driven merchandising tools as well. 

With LEAFIO Planogram Optimization, you’ll get an opportunity to: 

• analyze effects of visual merchandising practices you’ve applied;
• build planograms based on sales, turnover, and other types of data;
• visualize hot zones in stores;
• assign store employees with tasks and monitor their performance;
• be sure that you won’t increase the number of lost sales;
• improve inventory turnover. 

If you’re interested in detailed information, feel free to contact us.