olive oil by Muffet, on Flickr

With the retail sector still in the grip of one of the longest recessions anyone can remember, it’s no surprise that many retailers are as depressed as their margins.

Few have any real experience of being in a prolonged downturn and even fewer understand the implications of the changes being brought about by the shift to online.

For small independents who often lack the resources or access to specialist advice they need to navigate their way through these challenges, the shift in the retail landscape has been particularly difficult to handle.

The solution lies in delivering a best practice approach to merchandising...

Some have been forced into following many of the big boys by discounting large quantities of stock to eliminate excess inventory and seeing their margins tumble as a result. They have been driven to this short-term fix by a constant stream of bad financial news from the media which leads them to think their fate and fortunes are out of their hands.

Such messages are unhelpful, especially as they hide two genuine certainties: that people will still carry on buying things whatever happens and that independent retailers do have some control over their futures, far more than they are led to believe.

Mapping out Merchandising

Independent retailers do have the power to change matters for the better, but first they need to go back to basics. They need to put the customer at the heart of their strategy. Most will be aware of the need to get closer to their customers, identify their needs and deliver the right products to meet them but many will be far less certain of how to go about doing it.

The solution lies in delivering a best practice approach to merchandising. By this, I don’t mean the commonly-accepted definition,  the online or in-store visual presentation and positioning of products.

Instead, as I define it, merchandising is the process of having the right products in the right place at the right time for the right customers. It starts by retailers making sure that they get the correct products purchased up front, matched to the profiles they have developed of their customers.

These decisions need to be made before the products are published on the website, before stock is bought and before they have reached the shop floor.

Interestingly, a survey we carried out at the recent Retail Business Technology Expo found that the majority of retailers place more importance on managing their inventory than on the buying decisions that create that inventory.

In other words, people put less effort into what they buy than how they handle it once the money is paid and it is in the warehouse. It feels a lot like worrying about how you are stacking boxes of cat food you have already bought, without having first confirmed whether your cat will eat it in the first place.

Everyone knows prevention is better than a cure. True merchandising is working out what to buy and getting those decisions really sharp before you spend a penny on stock. It should take as much effort as inventory management and shouldn’t be confused with it either.

Astonishingly, many retailers still don’t really take merchandising seriously. In our survey, nearly half of retailers profiled said they didn’t regard getting the right product at the right time for their customer to be a priority.

If they want to take on the high street chains and beat them, independents need to make merchandising a priority and get it right up front.

Putting theory into practice

In following this approach, they could do a lot worse than take a look at some of the many excellent examples of retailers that are engaging very effectively with their core customers and who are using a best practice merchandising approach to get the results they are looking to achieve.

Zara is a great example: by staying close to its customers and their desires, by merchandising properly to within an inch of their range plans, the company significantly minimises the amount of stock it sells at a discounted price.

If you get a moment, think about the last time you saw permanent discount signs in Zara. You haven’t, and you won’t as long as it continues to range plan properly.

ASOS is another obvious choice for best practice merchandising and range planning. It built the brand on being fast to market with high street outfits that followed hot on the heels of celebrity fashion news and fashion trends, sourcing look-a-like products and creating look-a-like outfits.

Fast forward to modern day ASOS and, whilst the slave to celebrity has disappeared, it still delivers product ranges that are tightly pulled together, well-merchandised online and the ASOS fashion finder is a great example of community driving content driving sales.

Malcolm Duffitt

Published 11 June, 2012 by Malcolm Duffitt

Malcolm Duffitt is E-commerce Director at Anya Media and a contributor to Econsultancy. 

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Comments (2)


Gilon Miller

Very true Malcom. Especially what you say about "having the right products in the right place at the right time for the right customers." We see that increasingly with the retailers we work with. But beyond just understanding your customers, providing the right products has a lot to do with being aware of what products your competitors are offering their customers and finding the right product mix that makes your offering attractive.

about 6 years ago


Christina Rutherford

I agree Malcolm that many retailers have forgotten the importance of merchandising which is why they find themselves in sale so frequently.

In order to manage a successful retail store be this online or bricks and mortar, everything needs to revolve around your customer including your merchandising. As you say this isn't just a focus on your product positioning, it is about the entire customer experience; what is it about your product and your brand that interests your customer? What do they want from you and how can you help them?

If you are a retailer that can't afford to design close to the market to keep up to date with current trends or rely on external brands delivery windows, then you need to think about merchandising your product to your customer's interests and provide a community of engagement; which the likes of boohoo.com have incorporated to their site with styling tips, trends, press features etc... Which you can do both in store and online. Be a retailer your customer's can engage with...'community driving content driving sales.'

about 6 years ago

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