When you think about what the snack aisle at your local grocer looks like after a sales frenzy, words like “chaotic” or “barren” may come to mind. Potato chips in particular present a merchandising dilemma. Their packaging design is not prone to remaining upright, they’re bulky, and the sheer variety of flavours and brands makes the shelf space in this aisle highly coveted.
It was through these challenges that potato chip companies gained some valuable insight. Essentially, products low on stock, lying on their side or face down experience poorer sales than those with ample inventory and placed face up & face out. Consumer perception held that the products viewed in a disheveled state had been overly handled (broken chips) or were not as fresh (slower moving).
It was a lesson that transcended traditional retailing. Brand marketers, across a vast array of product categories, realized that leaving merchandising and display activities up to store staff meant leaving an awful lot to chance.
Merchandising by the Numbers
There is little argument about the impact effective merchandising can have on product sales and brand loyalty. In one study conducted by J.P. Brackman in partnership with Proctor & Gamble, they found that consumers wasted up to 20% of their time looking for “Phantom Stock-outs” (items purported to be in stock but not on the shelves). The most notable findings of this study included a 4% drop in store-wide sales as well as a dramatic increase in the potential for brand defection (switching to a competitor’s brand or competitive retail channel).
Giving Sales a Little Push
If increasing your merchandising workforce isn’t a viable option, you may want to invest in gravity feed shelves or “Pushers” (spring loaded devices that advance products and help keep them upright as consumers grab items from your merchandiser).
These devices help to reduce the potential for disarray in your displays between restocking and can have a positive impact on related product sales. In a study conducted by CART (Center for Advanced Retail & Technology), stores that effectively employed pushers (with frozen pizzas) saw an increase of up to 17.6% in year over year sales over control stores that did not.
For years Minus Forty Technologies has offered cost effective merchandising accessories such as gravity feed shelving and pushers but a solution to remotely maintaining effective stocking levels has remained elusive.
Minus Forty is currently experimenting with a number of different smart monitoring technologies designed to take the guesswork out of predicting stock levels including our unique “Shelfx” system. Stay tuned for important updates as these technologies come online or call Minus Forty Technologies for more information.