Merchandising Tips: Best Practices from Across the Retail Spectrum.

Dec. 19, 2011
Thoughtful merchandising can set your lock shop apart from the competition, create shopper interest and drive additional sales and return visits.

Let's try an experiment. Start by asking yourself, "What sets my store apart from the competition?" Then, follow up immediately by asking yourself, "Who is my competition?"

THE ANSWER OUR EDITORS MOST often hear to the second question is "Home Depot," "Lowe's," or "the hardware store down the street." And while, these stores are obviously competitors, if you're not mentioning Target, Banana Republic or the department store across town as your competition as well, you could be sorely mistaken.

Now more than ever, any retailer competing for consumers' discretionary spending must be considered competition and if you are going to compete with world-class retail operations for consumer dollars, you have to think, act and present your store like a world-class retail operation.

This is especially true in the way yon merchandise your store.

Merchandising is your first impression, your silent salesman, your face to the world. Not only can thoughtful merchandising set your store apart from the competition, it can also create shopper interest and drive additional sales and return visits.

So if you are truly competing with the best of the best, why not learn from them as well? Why is it that hardware stores only look to other hardware stores for merchandising ideas. Or home centers only look at other home centers?

The truth is that more and more innovative home improvement retailers are beginning to look outside the industry for merchandising inspiration and bringing ideas and concepts they find at those stores back into their own stores, large or small, urban or rural.

To help inspire ideas for your business and keep you aware of what the retail industry's leaders are doing to inspire and motivate shoppers with their merchandising, Hardware Retailing's editors investigated stores nationwide. We looked at all types of retailers--clothing stores, electronic stores, grocery stores; you name it.

Our goal: To find who in the wide world of retailing had the best merchandising strategies either by innovating traditional mainstays or utilizing new merchandising technology.

Even a few small touches of creativity can go a long way from changing a display from one shoppers aimlessly wander past to one that grabs their attention.

Translating Out-of-the-Industry Inspirations into Your Store's Merchandising Strategy

* Look at stores your customers currently populate. Generally, certain merchandising strategies attract similar types of customers, so if your customers like shopping in a technology-saturated environmentlike a Best Buy, then think about offering similar types of merchandising in your store. If your customer base is more comfortable in a smaller, quaint store such as Cracker Barrel, then they may not be impressed by virtual kiosks; in fact, they may be turned off. When you're looking for inspiration, make sure you focus on your primary customer base.

* Don't limit yourself. On the other hand, many retailers have found success from merchandising strategies that give their customers something they weren't expecting. Utilize uncommon merchandising techniques to generate excitement and earn the title as a progressive innovator in your market.

* Scale inspiration to your store. While Bass Pro has mastered theart of creating a compelling shopping environment, not everyone has enough space to build waterfalls and mountains in their store. Adding a few, smaller, dramatic flairs here and there can still get customers talking. Bring your merchandising muses down to a scale that will fit your store space and resources.

* Don't dilute your brand. Outside the home improvement industry is a great place to get some inspiration for freshening up and innovating your merchandising strategy, but if you wanted to be pharmacist or clothing store you would. Keep your brand integrated into anything new you decide to implement. Whether it's keeping your signature colors running through each display or maintaining consistent signage, make sure that when you borrow an idea from a retailer, you make it your own so customers don't get confused.

* Go beyond products on the shelf. We're all in the business to sell stuff, but today's customers want more. They're trained to be entertained while they shop. They've adapted to multitasking and expect shopping experiences to catch their eye and keep their attention. BassPro Shops, for example, have created tourist attractions out of their stores, and attract millions of visitors a year. You can assume your customers will be sadly disappointed if they move from being immersed in the sights and sounds of merchandising leaders like Crate & Barrel or The Fresh Market, only to walk into a dimly lit, dusty hardware store. When you walk into an entertaining retailer, ask yourself: "Why exactly do I enjoy shopping here?"

EXHIBIT A: Unique Signage/Advertising

Suspect: Banana Republic (Clothing, Accessories)

Evidence: Integrating popular media sitcoms or characters into your selling promotions can bring excitement to a lackluster promotion. Here the popular Mad Men TV show is integrated into the promotion of a clothing line. Try working with local celebrities or high school athletes for promotions.

(Disclaimer: Check with your 1egal departments about what and how you can use copyrighted material.)

EXHIBIT B: Customer/ Product Interaction

Suspect: Sephora (Beauty Supplies)

Evidence: People want to try out products before they buy those products; it's one of the biggest benefits to the brick-and-mortar experience. To utilize this trend in your favor, encourage customers to try samples or set up areas that suggest your customers get hands-on. At checkout, this retailer's employees ask customers if you had a chance to try products or "play." to drive home this strategy.

EXHIBIT C: Appeal to All Ages and Generations

Suspect: Bass Pro Shops (Outdoor Sporting Goods)

Evidence: Create a destination for all ages of customers. Get children excited about coming into your store, and you'll get parents coming too. Bass Pro founder Johnny Morris first put an aquarium in his store so customers would have something to look at while he filled their orders.

EXHIBIT D: Upscale Custom Lighted Shelving

Suspect: Becky Fehsenfeld Art Gallery (Specialty Art Gallery)

Evidence: One complaint consumers have with warehouse style big-box stores is the stark, uninviting shopping atmosphere. Independent retailers can create an upscale feeling in their stores by utilizing lighted racking. Lighted shelves don't have to cost much either; a simple leftover strand of Christmas lights tucked behind a lip on your shelving creates an expensive feel.

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EXHIBIT E: Gondolas Suspect: AllSaints Spitalfields (Clothing, Accessories)

Evidence: Even a piece of machinery can become a display rack for merchandise. This retailer has taken an antique that might draw some curious eyes, but that also might draw attention to merchandise. Don't think that the object you choose has to have anything to do with the merchandise you're selling either, be creative in your combinations.

EXHIBIT F: First Impression

Suspect: Bass Pro Shops (Outdoor Sporting Goods)

Evidence: Visitors can't get past the front door at this retailer without dropping their jaws in amazement. If you want to create atmosphere in the store, it has to happen up front. Carry that atmosphere through the store, too.

EXHIBIT G: Product Pairing Suspect: Restoration Hardware (Home Decor/Furniture)

Evidence: Grouping similar lines/products together not only helps promote cross merchandising, but also creates an environment that encourages customers to spend more time meandering around your store. Many customers want to see products displayed in a way they can mimic in their own homes.

EXHIBIT H: Horizontal Display

Suspect: Lands' End Canvas (Clothing, Accessories)

Evidence: Instead of standard vertical merchandising, this displayuses horizontal space to draw the eye. It is used here to highlight a single product. Plus, the message on the chalkboard can be changed easily.

EXHIBIT I: Connect with the Local Community

Suspect: Bass Pro Shops (Outdoor Sporting Goods)

Evidence: Each Bass Pro store centers its decor on a theme particular to the community. Here, it's a sunken pirate ship. The elaborate design creates an atmosphere that slows people down as they wander through the aisles. The average visitor spends about three hours in thestore.

EXHIBIT J: Sparse. Clean Design

Suspect: Crate & Barrel (Home Decor)

Evidence: Contrasting shapes draw the customers' attention. Merchandise this way by displaying only one item deep for an uncluttered look. Price tags are simple and bold, so the finishing touch on a display that looks more like a display in a museum than a store.

EXHIBIT K: Creative Lighting

Suspect: AllSaints Spitalfields (Clothing, Accessories)

Evidence: Spotlights take shoppers out of the boxy retail environment and place them on the fashion runway. Creating an atmosphere starts with the floor and goes all the way to the ceiling. Do something your customers don't expect, like stage lights in a retail store.

EXHIBIT L: Window Display

Suspect: Whole Foods Market (Grocer) Evidence: Use window displaysto engage the passer-by. This retailer uses the signboard, as well as the grouping of products to tell a story not only about the product, but also the mission of the store.

EXHIBIT M: Keeping Product Facing Forward

Suspect: CVS Pharmacy (Convenience Store)

Evidence: Mark Read, executive vice president at Retail Merchandising Solutions in Arkansas, told us he believes the greatest innovation to merchandising was the introduction of gravity feed and self-facing fixtures. Pharmacies are notorious for using these spring-loaded displays to help keep product faced forward and moving. Sure, you're not going to load up a gravity fixture with paint cans, but get creative.

EXHIBIT N: Integrating Technology

Suspect: Apple (Electronics)

Evidence: Apple is one of those retail stores that constantly finds ways to reinvent itself. Whether it's digital customer service signage that follows your movements as you walk past (see picture) or it's a sleek way of positioning a limited inventory in a way that the products are always being picked up and played with, Apple creates an environment where they encourage you to embrace technology (their product) and get hands on.

EXHIBIT O: Inexpensive Window Displays

Suspect: Apple (Electronics)

Evidence: Some of the best merchandising we found as we snuck through store after store were some of the cheapest. Take Apple for example. A handful of grey balloons and a cardboard cutout create an interesting and memorable message.

EXHIBIT P: Using Digital Signage to Grab Customer Attention. 

Suspect: Nordstrom (Department Store)

Evidence: Digital signage is one of the up and coming must-haves for retail stores. The mix of information, moving images and music creates a story around your products. Your customers not only become engaged in your brand and feel more connected to your store, they stop, at least several seconds, to watch digital signage, meaning they're clocking more time (and likely more product buying) in your store.

EXHIBIT Q: Using Signage to Promote Emotion, Connection

Suspect: The North Face Store (High-end Outerwear)

Evidence: Half the potential of signage is its unique ability to connect customers to your brand and product. A simple sign can sum up your store's history, mission and offering all in a couple of words. Here, The North Face Store uses stories of athletes who use its product to connect customers with its brand and create buzz around its offering.

EXHIBIT R: Custom Displays

Suspect: Anthropology (High-end Clothing, Accessories)

Evidence: To set your store apart from the competition, why use the same old shelving? Anthropology's box and steel merchandisers fit well with its vintage, raw branding mission. Building your own custom racking systems can help build up your brand and separate you from others in your market. Challenge yourself to utilize something already in your store that can be easily turned into a shelving, a checkout area or display cases.

EXHIBIT S: Touch Tablets for Consumer Interactivity

Suspect: Sam's Club (Discount Warehouse)

Evidence: Consumers are used to getting the information they want,when they want it, and most are doing so via a smartphone or computer. In response, retailers are starting to integrate interactive tablets such as iPads into their merchandising displays so customers can use the technology, to find answers in the store, and then purchase asa result of those findings.

EXHIBIT T: Store-within-a-Store Format

Suspect: Barnes and Noble (Book Store)

Evidence: One way to create different areas of your store is to create a store-within-a-store format. Here, the book store Barnes and Noble differentiates its children's book collection with a fun and colorful area offset by wood flooring. While we're not telling you to create a store-within-a-store for every category, departments your customers spend a lot of time in such as the paint department or design center benefit from a special area.

EXHIBIT U: Impulse Buys at Checkout

Suspect: Barnes and Noble (Book Store)

Evidence: By winding your checkout area around a couple of displays or tables, you not only promote impulse buys along the way, but you also promote organization of busy checkout areas. This queue-based strategy is particularly effective for retailers with little sales floor real estate. Barnes and Noble features one counter for checkouts with three to four POS stations.

EXHIBIT V: Hanging Ceiling Racks

Suspect: Delaney's (Clothing, Accessories)

Evidence: A progressive, new-wave racking system that utilizes a metal ceiling grid with hanging racks has become the talk of retail clothing store circle, but could be easily integrated into other industries. This kind of system allows a retailer to completely alter its store layout overnight by moving the hanging systems, keeping the store fresh and encouraging customers to move through departments they may not otherwise to find the products they want.

By Jesse Carleton, [email protected]; and Jaime Koch, [email protected], @NRHA_Jaime

Copyright 2011 Gale Group, Inc.All Rights ReservedLNWPCopyright 2011 National Retail Hardware Association