Merchandising Matters in the Meat Department
The Importance of Merchandising
Marketing and advertising bring customers into the store and into the department. Merchandising is the art of getting customers, once in the department, to pick up items and buy them.
At its most basic level, merchandising requires stocking shelves with products that are organized in a manner that makes it easy for customers to find what they’re looking for, and easy for them to pick up (e.g. not placed out of reach). Merchandising is also the science of managing one of the most expensive retail resources – shelf space.
Stores have a finite amount of space for displaying products. Products pay the rent for the shelf space that they occupy. Some products have a higher margin (make more money per item sold) but don’t turn over as frequently as lower margined items. Other items are large and take up a lot of shelf space.
Understanding the balance between the needs of presentation and return on shelf space is key to effective merchandising. The following work sheets will assist in benchmarking sales and profits per linear or cubic foot of shelf space. This will assist in measuring high margin/low volume products against low margin/high volume items, and large sized items against smaller sized items.
Aesthetics
The more appealing a display looks, the more product will move off the shelf. Following these suggestions will help deliver aesthetically pleasing displays:
- Displays must be faced and fronted – Turn all packages so labels face the customer. Pull packages toward the front of the case so the product is clearly visible and the display looks full.
- Displays must be orderly and clean – Keep displays orderly and clean at all times by removing leaking packages and regularly cleaning refrigeration cases.
- Displays must be free of damaged packages – A single damaged package can destroy the effectiveness of an entire display.
- Displays must be clearly signed and priced – Customers hesitate to purchase products without knowing the price.
- Displays must be set up and removed at the appropriate time – The department must be ready at store opening, and any seasonal or promotional items fully stocked.
- Display products must be accessible to customers – A display is not effective if the customer can’t reach the product. Successful self-service merchandising depends on easy accessibility.
- Displays must be correctly positioned – Strategically position displays to create impulse and related item sales.
- Displays should have a planned product mix – Carefully plan and monitor displays so they have a sufficient supply of merchandise and are properly grouped. New, seasonal or promotional merchandise should be displayed with high-profit products to maximize profitability.
Customer Convenience
Making the shopping experience as easy as possible for the customer increases customer satisfaction and return visits. Displaying products in groupings that make sense to the way a customer thinks while shopping is an important merchandising principle. Customer research, which may be as simple as questioning your customers, can help determine how the majority of customers think about their purchases in the meat department.
- Do most of your customers walk into the department thinking of the protein they want to buy (beef, pork etc.)? – Displays should be organized by protein.
- Do most of your customers shop with a particular cooking method in mind (grilling, simmering etc.)? – Displays should be organized by cooking method.
- Do the majority of your customers come into the department specifically looking for advertised specials? – Specials should be clearly signed (but with higher margined items displayed adjacently).
Research has shown that customers tend to make buying decisions within the display area that they can easily see. Customers can see approximately 12 linear feet. Try to keep your product grouping (protein, cooking method) vertically blocked within 12 feet of display.
Customers will also almost always look at eye level. Display your higher margined items at eye level.
Customer Demand
It’s been estimated that between 8 and 12% of retailed items in North America are out of stock at any given time. An out of stock item is a lost sale. Effective merchandising takes into account the sales volume of a product and ensures enough display space is assigned to it to ensure the product does not run out between scheduled re-stocking.
A simple method to calculate the amount of display space that should be given to a product is to take historic sales volumes of the product divided by stocking schedule.
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Merchandising for Profit
Effective merchandising decisions can only be made in conjunction with a clear understanding of product financial performance. Decisions on how much shelf space to devote to display of a product and which products to put in prime display locations (e.g. eye level) depend on understanding the margin contribution of each product. See Measuring Category Financial Performance for more information.
As discussed in the Pricing section of Category Management, the bulk of a store’s stock keeping units (skus) are not price sensitive and can be priced for profit. Products that are priced for profit should play a key role in merchandising decisions.
Understanding each product’s characteristics and its contribution to the store and department’s competitive positioning strategy will also help determine merchandising decisions.
Planograms
A planogram is a diagram of fixtures and products that illustrates where retail products should be displayed, usually on a shelf, in order to increase customer purchases. Planograms help map out where to display products even before the products reach the store. Planograms can be designed for and provided to any number of stores to ensure a consistent look, such as in a retail chain.
The purpose of a planogram is to communicate to others, including stock clerks, how to display merchandise to increase customer purchases. Because the goal of a planogram is to maximize profit per centimeter of shelf space, product financial performance needs to be taken into consideration.
Merchandising Principles
Successful merchandising is built on a strategy for providing maximum value to the customer at a profit, and the effective implementation of the strategy in the store. Merchandising is a team effort, from managers through to the employees who keep the shelves stocked. It is described as a standardized set of baseline criteria permeating throughout all areas of the store in an effort to project a positive visual image.
Visual Merchandising
Visual merchandising supports the store and the department’s competitive positioning strategy, carries through on the promises made through advertising, and assists customers in finding the products they’re looking for.
Visual merchandising includes signage, shelf strips, product labels, point of purchase materials and anything else that the customer sees when shopping in the department.
Product displays are also a form of visual merchandising – a block of the same product in a display that is full, evenly spaced and with labels facing the customer, creates a pleasing billboard effect.
General principles:
- All signage and labels must be clean and undamaged.
- Every shelf should be labeled, even if the same product is displayed on more than one shelf.
- Shelf labels must match the product displayed.
- Advertised specials or promotional items should have signage that makes them easy to find.
- Signage and shelf labels must match the advertised product description.
- Coupons, recipes and other point of purchase materials must be kept tidy and neatly displayed.
In-store Signage
In-store signage offers an opportunity to communicate with the customer. The goal of signage is to make the customer’s shopping experience easier and encourage sales by putting the right information in the right place.
Signage should anticipate and answer customer questions. With planning and careful execution, a signage program can add to the store’s visual appeal and encourage sales and impulse buying.
Effective Positioning
Customers are used to looking for different types of messages at various heights in a store. There are three general signage locations – Level One – nearest the ceiling; Level Two – above eye level, usually from seven to nine feet from the floor; Level Three – six feet from the floor and lower.
Though the messaging carried may be different, for maximum impact all signage should have consistent and harmonious elements.
Level One – The area nearest the ceiling is suitable for permanent messaging visible from all parts of the store. Store directional messaging is most suited for this level, such as indicating the location of departments (Meat, Bakery, Dairy etc.).
Level Two – This area is used to display overhead signs or customer awareness banners. Overhead signs are most effective in enhancing marketing programs and overall store image. Overhead signs should relate to the merchandise being displayed beneath them. It’s important to ensure overhead signs are hung straight. Care should also be taken not to impede vision of other signs or areas of the store.
Level Three – Within eye and hand level is where customers examine merchandise and make purchasing decisions. Appropriate signs at this level are informative signs that talk about product features, benefits, and details such as price. These signs play a big role in reinforcing the motivation to buy. Level Three signs must relate to the displayed merchandise.
Don’t Overdo Signs
Too many signs can cause customers to tune out all the messaging. Overdone and poorly planned signage can result in a blur of mixed messaging and confused, unfulfilled customers. Keep signage relevant to the merchandise on display.
Sight Line Merchandising
Sight lines are straight lines of unobstructed vision. To maximize sight lines, displays should have even height profiles. When even height profiles are maintained throughout the store, customers get a clear view to all areas. This ensures that all merchandise is visible and that signage is clearly visible.
Promotional Merchandising
Promotional merchandising plays a key role in driving sales. Aggressive support of advertised products ensures both business and customer expectations are met. Clearly identify the promotional merchandise, make attractive displays, take advantage of tie-in opportunities and maintain a healthy level of gross margin on the overall product mix.
Plan Your Promotional Displays
Plan a structured approach to promotional set up. Understand the traffic flow of the meat department and prime merchandising display locations. Spread promotional products throughout the department to lead shoppers past all the products on display.
Be Familiar with Upcoming Promotions
High profile products as well as sale priced items may be advertised. Displays for each type of product need to be carefully planned. Displaying high profile products (e.g. prime rib roasts, steak and lobster packs) should be displayed near the front of the department where they are easily visible. Sale priced products are best displayed in a manner that requires customers to walk past adjacent displays, where similar but higher margined items (e.g. source grinds next to sale priced ground beef) can be displayed.
Promotional items in other departments should be considered for possible tie-in merchandising. For example, if the dairy department has a sale price on processed cheese slices, consider a display including cheese slices adjacent to ground beef patties, hamburger buns and condiments.
Seasonal Merchandising
The meat department, like other departments in the store, can tap into lucrative seasonal revenue by having the right products available at the right price at the right season, and by effectively merchandising those products.
Examples of seasonal marketing opportunities for the meat department include:
- New Years Eve and New Years Day – prime rib and other roasts
- Chinese New Year – stir fry strips
- Valentines Day – grilling steaks; steak and lobster packs
- Summer Holiday Weekends (Victoria Day, Canada Day, August Long Weekend) – grilling steaks; ground beef patties; beef ribs
- Back to school – ground beef and other quick and nutritious beef cuts
- Fall – pot roasts; stewing beef
- Christmas season – prime rib and other roasts
Be sure to draw attention to the seasonal aspect of the product on display through effective visual merchandising. Signage and other seasonal displays can be used to make the product display stand out. Canada Beef has available recipe booklets that will encourage seasonal usage – for example, Perfect Roast Beef with Christmas season and New Years displays, Cross Canada Beef Barbecue with Canada Day displays, or Dinner Made Easy with back to school displays.
Look for opportunities to cross-merchandise products from other departments with your seasonal displays.
Put a post-mortem of the seasonal activities in your 52-week file so that successful activities can be repeated and improved upon.
