Context

A quick look at the basics of merchandising

Before we look at the various innovations, let's look at the basics of merchandising.

According to the French Institute of Merchandising (now the Institute of Commerce), merchandising is "a set of studies and application techniques, implemented separately or jointly by distributors and producers, with a view to increasing the profitability of the point of sale and the sale of products, by constantly adapting the assortment to the needs of the market and by the appropriate presentation of the merchandise.

The key objective is to maximize sales or margins by driving the consumer to the sales channel. Merchandising optimization is based on quantitative analyses of sales and financial results (turnover, margins, panel data, etc.). It also relies on highlighting the offer and taking into account the behavior of visitors in the point of sale (route, consumption habits, traffic speed, behavior and visual capabilities, etc.).

‍

‍

Macro and micro merchandising

Macro merchandising is the optimization of the customer journey. This process corresponds to the layout of categories and the installation of shelves in the store. To do this, it is necessary to set up the universes around the main customer circulation axes (penetration and central aisle). The universes bring together several categories that include complementary and substitute products. Macro merchandising also takes into account other parameters such as the width of the aisles, the number of customers and the height of the gondolas.

Micro-merchandising is the optimization of the shelves. This process consists of putting the right product, the right range and the right assortment in front of the customers on the shelves. It involves changing the layout of the different products on the shelves according to the needs of the customers and the characteristics of the markets.

These two aspects planned in parallel allow a retailer to know how to organize his store in an optimal way and generate maximum turnover or margin. They are also used to provide the ideal assortment of products on the shelf. We can make the link with visual merchandising. It consists in optimizing the presentation of the products, the satisfaction of the customers or visitors and the staff. And of course, to promote sales.

‍

‍

E-merchandising

It is simply an extension of physical merchandising adapted to the web. In the same way, e-merchandising seeks to optimize the conversion rate and develop the average basket. To do this, it is a matter of taking the rules we have seen and adapting them to the codes of the web. However, we will have to face new problems:

• Optimize the natural referencing on search engines: thanks to the development of keywords from its site or by paying.
• Optimize the speed of your site: the slower it is, the more visitors you will lose. On this subject, 40% of customers abandon a website that takes more than 3 seconds to load.
• Imagine a consumer journey and highlight certain products using behavioral marketing and cookies.
• Develop comparison tools.
• Couple and adapt the e-commerce site to a mobile application: according to Techjury about 75% of consumers will buy on mobile in 2021.

Developing a new channel means acquiring and retaining new customers. In 2021, online retail sales reached 4,900 billion according to Statista. In France, the sector totaled 129.1 billion euros in 2021, an increase of 15% over the previous year. The 2021 Statista report shows that 48.5 million French people will buy online in 2021. Moreover, the average basket amounted to about 60€.

Now, the sales strategy has evolved for many brands through the shift from multichannel to omnichannel. We are entering the era of total commerce, where you have to sell first and foremost, by all available means, on all possible channels.

‍

Innovations in merchandising

Augmented reality for merchandising

The first merchandising innovation is augmented reality. Now widespread, augmented reality makes it possible to integrate virtual elements in 3D (in real time) within a real environment. This technology continues to be a game-changer in ever more diverse sectors: sales, healthcare, local authority support, marketing. According to Bigcommerce, 38% of B2B buyers are looking for augmented reality solutions. And rightly so, since this technology could, among other things, improve operational efficiency.

On the consumer side, 82% of visitors to a product page activate the 3D view and the conversion rate of products that include 3D is 40% higher than those that don't, according to Cappasity. Following an augmented reality campaign, Asus saw 10 times more engagement than its usual campaigns.

At present, augmented reality can remove some of the obstacles in retail and allows :

• To be more aware of: the space that an operation or an animation can take in the point of sale.
• Mastering the sales pitch: especially the technical aspects such as prices, margins or volumes.
• Engage customers more quickly: reassure them by adding an extra step in the purchasing process.

Equipped with a smartphone, sales representatives with the Instore Activation application will be able to project a realistic visualization of concept and layout proposals directly into the point of sale of B2C and B2B customers.

Virtual reality for merchandising

The second innovation in merchandising is virtual reality. In order to understand the consumer's choice efficiently, it is necessary to set up shopper or consumer studies. Traditionally, these studies are expensive and time-consuming. Moreover, they remain limited from a geographical point of view and can only reach a limited number of targets.

The health crisis has largely contributed to theadoption and diffusion of virtual reality. It has proven to be particularly effective and is now used in many fields.

In the field of shopper research3D offers many advantages, and is a real breakthrough innovation that allows to :

• Reduce considerably the time needed to set up a study (and therefore its cost).
• Hit a wider target faster.
• Conduct multiple studies at the same time.
• Cover a larger geographical area (national/international).

Consumers are looking for new experiences. According to Esteban Kolsky, "72% of customers will share a positive experience with six or more people."

Virtual reality can also be used to analyze the in-store shopping experience or to test new layouts. Thanks to the digital twin of a 3D store, Retail Staging facilitates the definition of your layout strategy.

‍

‍

The VR showroom for merchandising

The third innovation in merchandising is the virtual showroom. A virtual showroom in 360° allows to propose a physical experience in digital.

The use of a digital twin makes it possible to completely rethink the customer's in-store journey, offering a different, immersive experience. It's a further step towards improving point-of-sale layout and merchandising in general. In fact, you can create a truly immersive shopping experience within a virtual showroom. You can guide customers towards the products they like, guiding them towards additional purchases, and still leave them plenty of freedom to act, responding to their need for autonomy. This experience can also serve as a link with physical stores. Two figures to bear in mind: 60% of those who have already purchased via a virtual store want to do so again; 70% of consumers who have visited a virtual store have transformed their purchases.

‍

‍

How will merchandising innovations evolve?

The advent of Web 3.0, and more specifically the metaverse (a persistent virtual space accessible through an avatar) prefigures the revolution that is shaking up retail. And for good reason, 60% of young and future consumers think that brands should use the metaverse to sell. Merchandising, and more generally the retail sector, must now take into account these new opportunities and the consumption behaviors associated with them: NFT, cryptocurrency, D2A.

9 success factors to implement in merchandising

In 1963, Charles Kepner discussed a set of five rules for optimizing merchandising in his book Modern Supermarket Operations:

• The right product
• The right price
• The right place
• The right time
• The right amount

Nowadays, these processes can be taken even further. In our opinion, the arrival of new means, as we have seen earlier in the article, offers other rules for maximizing merchandising:

• The right information: an XXL product sheet, with photos, videos, QR codes.
• The right presentation: a fully customizable and scalable 3D world.
• The right atmosphere: convey the brand's image to customers.
• The right availability: selling online and connected to your Shopify inventory.

Innovations in the shopping experience go beyond Charles Kepner's postulates and start a revolution in merchandising, and more generally in retail.

Don't miss out: virtual commerce (v-commerce) is the future of commerce! Discover our 3D Merchandising solutions.