Exploring modern merchandising: Lexicon, developments and challenges

Merchandising, a key strategic tool in retail, has become crucial for attracting and retaining an increasingly demanding customer base. For retailers, adopting a high-performance merchandising software is now the cornerstone for executing these strategies.

Before discussing trends in the industry, let’s define merchandising: it refers to all the techniques used to present a product in the best possible way to maximize profitability. According to the 5B rule, successful merchandising ensures that the following conditions are met simultaneously: the right product, at the right time, in the right quantity, at the right price, and in the right place.

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Merchandising Glossary

To effectively manage your retail location, it is essential to master the three pillars of the business:

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Organizational Merchandising

This is the foundation of the physical presentation. The key terms are:

• Shelf Space: Space for displaying products.
• Facing: Front-facing display to maximize visual impact and encourage impulse purchases.
• Traffic Flow: Intuitive layout of the aisles.
• Product Assortment: A balance between diversity and relevance.

Merchandising to Attract Customers

The goal here is to captivate the shopper:

• Marketing & Promotion: Temporary initiatives to boost sales.
• POS & In-Store Materials: Advertising and informational materials at the point of sale.
• Sensory Marketing: Creating an immersive experience through the senses.

‍Merchandising Management

Focus on Operational Performance:

• Profitability: Analysis of Economic Performance by Area.
• Inventory Management: Preventing Stockouts.
• Ratios: Financial Turnover and Efficiency Ratios.

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The Evolution of Merchandising: Toward Phygital

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The Paradigm Shift: From ROPO to the Unified Experience

We are witnessing a major shift toward digital integration. Today’s consumers move back and forth between the web (showrooming) and brick-and-mortar stores (webrooming), giving rise to the ROPO concept (Research Online, Purchase Offline). The strategic challenge for brands is now to ensure seamless continuity between the online experience and the physical point of sale.

This shift requires retailers to adopt a in-store merchandising software capable of harmonizing these touchpoints. The goal is clear: to transform the shopping journey so that it is fluid and seamless.

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Reinventing the Experience Through Digital Transformation

The line between the physical and virtual worlds is blurring. Phygital is revitalizing the retail experience by incorporating immersive technologies that simplify the shopper’s journey:

• Increased interactivity: Use of interactive screens, kiosks, and QR codes to enhance the product offering.
• Sales Support: Digital guidance during the product onboarding process.
• Example: Nespresso Dolce Gusto— Rollout of a virtual experience in-store via a QR code, guiding customers through a discovery of the Neo machine.

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The tangible benefits: Beyond being merely a novelty, digitization boosts business performance:

1. Channel Harmonization: The online and physical catalogs are now one.
2. Engaging Customer Journey: Highlighting Key Stages (Discovery, Wait, Retention).
3. Impact on revenue: 51% of retailers see a direct correlation between digital tools and an increase in their in-store business (Source: 1min30).

The integration of a store merchandising software enables retailers to manage this digital transformation with precision, ensuring perfect consistency across all touchpoints.

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The Technological Challenges of Merchandising

Commerce is taking a new turn, raising four major challenges:

1. Digitalization: Integrating the virtual world to understand behavior.
2. Customer Experience: Creating a Memorable and Unique Experience.
3. Sustainability: Incorporating eco-friendly practices into shelf design.
4. Technology: Artificial intelligence is becoming indispensable. It is now possible to create your own planograms using a high-performance merchandising solution to optimize every square centimeter of shelf space.

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Conclusion

Merchandising has become the catalyst for change in the retail industry. To thrive, companies must master this phygital transformation. The future belongs to those who can combine advanced personalization, sustainability, and technological immersion.

To learn more, find out how our merchandising tool can help improve your teams’ performance and streamline the rollout of your point-of-sale strategy.

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