7 Merchandising Strategies that Increase Sales

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A “one size fits all” merchandising strategy won’t work in today’s competitive environment. Retailers who personalize their product assortments will gain a significant competitive advantage. Natural retailers have a unique opportunity to leverage their customer service strategies to personalize the shoppers’ journey and convert occasional customers into loyal shoppers.

Strategies should vary by category and sometimes by segment depending on the overall objective for the brand, category, and retailer. Each strategy should be carefully crafted to target a specific objective, such as increasing foot traffic, inviting new customers to try your brand, developing loyal committed customers, or increasing sales.

Developing and managing merchandising strategies should be a collaborative effort shared between the retailer and the manufacturer. Manufacturers are the true experts in their brand’s categories. A smart retailer should take full advantage of the brand’s knowledge and expertise to help grow the category and sales.

The category leader role is a key factor in a savvy retailer’s success. This person is a trusted business partner and ally to the retailer. Together, the retailer and manufacturer can help satisfy a greater number of consumers, grow the category, increase consumer takeaway, and beat the competition.

Strategies include a variety of components: pricing, promotion, product placement, support, consumer education, etc. Together, the different components help achieve the retailer’s goal. Here are seven merchandising strategies to try:

  1. Profit Generating: Higher gross margin and higher turns. This strategy focuses on the ability of the category to generate profits. Margins can be higher in this area due to the value added, higher-quality products in these categories.
  1. Cash Generating: Higher turns, frequently purchased items. This strategy focuses on the ability of the category to generate incremental cash flow.
  1. Turf Defending: Used by retailers to draw traditional consumers. This strategy focuses on aggressively positioning the category to appeal to the consumer by highlighting comparable items with key competitors. This strategy also focuses on keeping your existing customers happy and returning. Loyalty cards, aggressive pricing and promotion strategies, consumer education, high-value coupons, etc. are all designed to help maintain a loyal customer base. For example, Organic Chicken Noodle Soup priced aggressively compared to target retailers.
  1. Traffic Building: High volume share, frequently purchased items, a high percentage of sales. This strategy focuses on drawing consumer traffic into the store and/or into the target category.
  1. Transaction Building: Higher ring/transaction size, impulse purchases. This strategy focuses on increasing the size of the average category transaction.
  1. Image Creating: Frequently purchased, highly promoted, impulse, unique and seasonal. This strategy communicates an image to the consumer in one of the following areas: price, service, quality, specialty items, or assortment.
  1. Excitement Creating: Impulse, lifestyle-oriented, and seasonal items. This strategy communicates a sense of urgency or a limited-time sensitive opportunity to the consumer.
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Dan Lohman is a CPG and Natural and Organic Industry Strategic Advisor. His company Brand Secrets and Strategies provides innovative ideas, actionable insights and strategic solutions to the challenges that brands and retailers face. Dan assists retailers and brands in expanding their distribution, growing sales and getting their products on more store shelves and into the hands of more shoppers. His extensive knowledge reaches beyond traditional category management and has earned him recognition throughout the industry as an influencer, expert, speaker, trainer and thought leader. Dan is passionate about empowering brands and raising the bar. His Brand Secrets and Strategies podcast is a popular natural and organic products accelerator for food startups, healthy brands and retailers. In addition to sharing his 25 years of experience, Dan talks with well-known thought leaders, CEOs and founders of successful industry companies who candidly share insider secrets. As a top contributor to the leading trade publications, he has published over 300 articles. A trusted and respected member of the natural and organic community, Dan’s weekly newsletter, podcast, free resources and online mini courses have become an invaluable resource for brands and retailers seeking to grow sales and gain a sustainable competitive advantage. To learn more please visit: www.BrandSecretsAndStrategies.com