I - INTRODUCTION

Merchandising is a strategic lever in the retail sector, and is crucial to attracting and retaining customers.

Before getting down to business, let's define merchandising. Merchandising is the set of techniques designed to present a product in the best possible conditions in order to maximize profitability.

To find out more, we invite you to read our article on merchandising in its entirety.

According to Keppner, good merchandising must obey the 5B rule: " Merchandising is the simultaneous satisfaction of the following points: the right product, at the right time, in the right quantity, at the right price and in the right place".

There are three main types of merchandising: organization merchandising , seduction merchandising and management merchandising . In this article, discover the fundamentals of merchandising, the corresponding terms and their evolution.

II - MERCHANDISING LEXICON

Organization merchandising :

Organizational merchandising is the central pillar on which the physical presentation of products in stores is based. It encompasses several crucial terms, including :

• Linear: Linear space represents the arrangement of products on shelves. Thoughtful shelf organization contributes to better visibility and an optimal shopping experience.
• Facing: The frontal arrangement of products on shelves. Well-orchestrated facing maximizes visual impact and encourages impulse buying.
• Traffic flow: The layout of aisles and passageways in the store. A fluid traffic flow guides customers intuitively through the retail space.
• Assortment: The selection and variety of products on offer. A well-balanced assortment meets customers' expectations and stimulates diverse purchasing.

Seductive merchandising:

Seductive merchandising aims to capture shoppers' attention and arouse their interest. Key terms associated with this category include :

• Animation: Actions designed to energize the sales area, whether through demonstrations, special events or temporary promotions.
• Promotion: Temporary incentives designed to stimulate sales, such as discounts, gifts or special offers.
• POS (point-of-sale advertising): Advertising media deployed directly in the store to highlight a product or promotion.
• POS (Point of Sale Information): Elements providing relevant product information, such as labels, to guide consumers.
• Sensorial marketing: The use of the senses, such as smell, sight and hearing, to create an immersive and memorable in-store experience.

Management merchandising :

Management merchandising focuses on operational efficiency and profitability. Key terms include:

• Profitability: Evaluating the economic performance of products and sales areas to maximize profits.
• Inventory management: Careful monitoring of stock levels to avoid shortages or surpluses.
• Ratios : Financial indicators used to measure the effectiveness of merchandising operations, such as inventory turnover ratios.

III - THE EVOLUTION OF MERCHANDISING 

The evolution of merchandising: e-commerce changes the game

This evolution is characterized by a marked transition from the traditional approach to the growing integration of digital technology. Today's consumers follow diversified purchasing paths, far removed from those observed just a few years ago. Today, it's possible to begin a journey online and conclude it in-store (Webrooming), or conversely, to begin an exploration in-store and finalize it on the web (Showrooming). This flexibility enables customers to choose and combine different points of contact throughout their purchasing process. According to FEVAD, 77% of French consumers prepare their online purchases before buying in-store, and 32% buy online a product not available in-store.(9th FEVAD-Mediamétrie/NetRatings barometer)

This phenomenon is known as ROPO (Research Online, Purchase Offline). This approach, known as "web-to-store" purchasing, reflects the growing use of the Internet to search for products that correspond to consumers' needs, enabling them to compare different offers, consult customer reviews and obtain detailed information on product characteristics. In short, consumers aspire to be fully informed before making a purchasing decision, often preferring the in-store experience and immediate availability of items(Eskimoz).

With the advent of e-commerce, merchandising is adapting to online strategies, exploiting personalization and virtual visualization to optimize the shopping experience. In physical spaces, an experiential approach is emerging, integrating virtual reality and showrooming. 

Reinventing the in-store experience through digitalization

The integration of digital technology into the point of sale offers the opportunity to create an innovative space. Phygital, at the frontier between the real and virtual worlds, adds a captivating dimension to the visit to physical stores, offering visitors a unique experience. By using digital technology in-store, interactive screens, kiosks and QR codes can be used to present a wider range of products, and provide assistance in purchasing and getting to grips with them.

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Take the example of Nespresso Dolce Gusto, which recently presented a virtual experience accessible by QR code in-store to guide consumers through the purchase and handling of the new Neo machine.

In this way, online and in-store catalogs are harmonized, truly transforming the in-store visit into a distinctive experience. The use of digital technology at the point of sale also adds a playful aspect to the consumer's journey, at various levels such as product discovery, waiting at the checkout, and loyalty building. In this way, 51% of owners of physical stores and e-commerce sites have seen the virtual benefit the physical(1min30).

The challenges of merchandising

As we've just seen, the world of retail is taking a new turn towards phygitalization, raising new challenges for merchandising. Here they are: 

• Digitalization: The expansion of online retailing requires effective integration of virtual merchandising , using data to understand online shopping behavior.
• Customer experience : Creating a memorable customer experience is becoming essential to stand out in a competitive market.
• Sustainability: Consumers are increasingly sensitive to environmental issues, prompting companies to integrate sustainable practices into their merchandising strategies.
• Technology: The adoption of emerging technologies such as artificial intelligence and augmented reality opens up new possibilities for improving merchandising. Retail VR's 3D merchandising software makes it possible to create your own planograms and/or store in 3D. 

V - CONCLUSION

In conclusion, the merchandising glossary offers a comprehensive overview of the crucial terms that guide optimization strategies. 

We have seen that merchandising is evolving in an increasingly digitalized environment, adopting innovative strategies to meet changing consumer expectations. The integration of technology into commerce, whether digital or physical, offers considerable advantages in terms of personalization, customer engagement and performance optimization.

Today's consumer is looking for a personalized, fluid and immersive shopping experience, whether online or offline. As technology continues to advance, merchandising is adapting to take full advantage of the opportunities it offers. The future outlook for merchandising suggests an even greater integration of emerging technologies, with strategies focused on sustainability, advanced personalization, and an ever-richer customer experience.

Ultimately, merchandising is proving to be a catalyst for change, actively shaping the future of retail. Companies that understand and master this transformation will not only thrive in today's retail landscape, but will also leave a significant mark on the history of modern commerce.

To find out more, read our article on merchandising strategies. 

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