IN-STORE MERCHANDISING is all about consumers, no one else. While it’s true that others are affected by the tactics of in-store merchandising — store owners who reap the profits from the high-caliber implementation of a good plan, store associates who work in an environment where customers are happy — the entire concentration of in-store merchandising should be on the consumer.

Why this focus? How about a paraphrase of the old bromide, “The end justifies the means.”

Definitely, absolutely true, and laudable in this case. The end is a happy customer who not only finds, easily, what he has come into the store to buy, but also other items of use to him.

The simple fact that in the automotive aftermarket 70 percent of the final buying decisions are made in-store is the best argument for good in-store merchandising.

Stimulate while they’re in store Compound that simple fact with the knowledge that 65 percent of those 70 percent of shoppers can be stimulated to make an add-on purchase, and ignoring the latest proven tactics of in-store merchandising is indefensible. Mr. and Ms. Retailer, if you could make an additional 50 cents on every person who walks into your store, what would that mean to you in total dollars in a year? Given those statistics about in-store buying decisions from the Point-of-Purchase Advertising Institute, Inc. (POPAI) (see graph pg. 39), it’s important for everyone involved with in-store merchandising to understand how consumers shop. Once you understand shopping patterns and methods, tactics for effective in-store merchandising can follow.

An art defined: What is in-store marketing/merchandising? It’s the art and science of creating a knowledge-based, actionable solution leading to a profitable environment, based on the realities of how shopping is done — where products, consumers, and money converge — where 100 percent of the cash changes hands.

Tactics include more than the use of planogramming to determine where on a shelf, within a section, in a product category display, one certain SKU should go to optimize its sales and margin. Tactics include fixtures, signage, shelf strips, interactive in-store advertising media such as application look-up tools, color schemes, and coordinating your out-of-store advertising and promotional messages with what you say in-store.

Solve the complex puzzle

Retailers can design and control only a certain amount of how they display their inventory. Their numerous suppliers ship an incoming product mix which is a combination of packaging, shapes and sizes of special promotion fixtures, diverse color schemes well-thought-out to build brand awareness.

The challenge is to take the various components of merchandise mix and devise a store which pleases the customer because it answers the question in her mind as she enters the store, “What’s here, and where is it?”

How is this done? The best-merchandised store is the result of a successful partnership between a store’s management and its suppliers.

We lag behind

This “successful partnership” concept is new to the automotive aftermarket. Although for nearly two decades retailers and suppliers in other market segments (grocery is the leading example) have cooperated with each other in trusting partnerships to achieve the financial benefits garnered from category management, our aftermarket is just reaching this business-friendship circle.

Category management principles require complete sharing of sales and margin statistics from retail operations with their lead suppliers who assume the responsibility of planning what should be on the shelves, and in what quantity. This helps the store obtain maximum financial results.

That planning is best done by using today’s ultra-sophisticated, business results-oriented planogramming software. Category management creates a contented shopper who returns time and time again, happily ignorant of the great effort store owners and their suppliers expend to make his shopping experiences pleasant and productive.

With sales information available, and knowledge of shopping habits and patterns clear, in-store merchandising can be planned and executed to improve store results. Do it, and they will buy.

You know what? The mere act of doing it (i.e., fixturing and merchandising upgrades) stimulates sales! Consumer studies of in-store purchases, conducted every year for the past ten, haven’t varied by more than two points during the entire decade. The baseline numbers are very consistent.

Do your research

The research results translate to, “Build your in-store merchandising program, and they will come — and buy. They’ll buy more — time and time again.”

It’s similar to a classic management experiment during World War II when employees who received attention from management increased productivity. While management did nothing specific to improve working conditions other than pay attention to that group and ignore the “control” group, the mere act of implementing in-store merchandising change creates sales.

Exact execution is profitable

The degree of increased performance is related to the level of execution and location. That’s why a store chain which remodels chain-wide obtains better results in some stores than in others: the level of execution varies from one store to another.

For example, the placement of a stand-alone merchandiser in the back corner of the store rather than near the checkout counter will cost sales.

It’s a deviation easy to miss when store management looks only at the numbers and doesn’t conduct a store-by-store onsite analysis of the execution of the fixturing and merchandising plan to discover why differing results exist.

Asking the right first question

“What should it cost?” Generally, that’s a retailer’s first question. It shouldn’t be. The correct initial question is, “Can I increase my profit and sales, and what do I need to spend to get those increases?” Investment in merchandising is repaid from increased profitability results.

Next question? “Won’t all this new fixturing and signage create clutter in my store?” Retailers who plan their walk patterns and signage with consumer behavior uppermost in the planning will not risk a cluttered result.

Actually, the aftermarket has it easy in this regard. Think about the challenge of avoiding clutter and overwhelming the shopper with too much signage, which an 80,000 SKU supermarket or 150,000 SKU mass merchandiser faces. Drug stores have it pretty easy in this regard since they have to merchandise only 50,000 SKUs, and some of that sits behind the prescription counter, much like our specific-application hard parts.

No matter whether a store is a supermarket, mass merchandiser, home improvement store, drug store, or auto parts retailer, the consumer is the same person, with the same mindset, same attitude, same demographics in a neighborhood. He and she are stimulated to buy more by well-implemented in-store merchandising programs.

That’s my case for well-planned and excellently executed in-store merchandising and marketing.

In-store buying decisions

Anyone who questions whether or not in-store displays influence consumers to buy should consider this information from the Point-Of-Purchase Advertising Institute. According to POPAI’s most recent survey of Consumer Buying Habits, 53 percent of consumers shopping at mass merchandisers make Unplanned purchases, buying items without planning to buy them before entering the store. Three percent Substitute items, planning to buy a specific brand or type of item, but buying another item or brand instead. Another 18 percent Generally Planned to buy a particular item, but did not have a brand in mind, and 26 percent Specifically Planned to buy a particular item and brand. The consumer is not a difficult person to figure out when it comes to shopping. Studies on his or her buying habits are on-going. By researching you can figure out your consumers.

Stephen J. Alexander, president of Automotive In-Store Marketing, is a member of Aftermarket Business’ Retail Advisory Board. To reach him at his Sanibel Island, Florida headquarters, call 239-395-9203, or e-mail, salexander@autoinstore.com.

COPYRIGHT NOTICE:"Reprinted with permission from Aftermarket Business, Merchandising Supplement, October, 1999, page 38-39. Copyright by Advanstar Communications, Inc. Advanstar Communications, Inc. retains all rights to this material." To subscribe to Aftermarket Business, call 1-218-723-9477 or email fulfill@superfill.com.