Effective Merchandising

Effective merchandising is no longer solely about racking up bottles within a physical space. It’s about embracing how online opportunities and mobile technology can draw customers into your store, and then engaging them with a personalized shopping experience. However, that’s easier said than done. Mobility has changed the rules, and the omnipresence of the Omni Consumer (a term IBM coined to describe the empowered, more-connected-than-ever Millennials), means that today’s merchandising techniques are on the move.

In a market driven by deep discounting, especially in a down economy, many liquor store managers are sticking with traditional merchandising techniques to sustain revenues. Those stores looking to stand out will want to check out the high-tech visual alternatives, and most importantly, the integration of physical and digital systems to create a frictionless shopping experience online, on site, and back-of-house.

For Edmonton-based Liquor Stores N.A. Ltd., North America’s largest publicly traded liquor retailer, the last 18 months have focused on brightening and modernizing outlets as well as upgrading the chain’s information technology systems. “In 2015 we launched our e-commerce platform in Edmonton and have continued to expand the geographic radius in order to serve more customers,” says Jason Fremstad, SVP, Merchandising. “The great part about our e-commerce program is that we are able to offer our customers a much wider selection than what is available in their neighbourhood outlet, and when a customer orders from our site they can pick up from their local store.”

The company has also just launched a partnership with Drizly, an American liquor-delivery app that anticipates being able to fill most orders within an hour. Already operating in 18 cities across the US, Drizly chose Edmonton as its first foray into Canada because of the success of other service delivery apps like JUST EAT and Uber. “To date, the program has been very successful and we are looking forward to expanding the service to other regions,” Fremstad notes.

Foster a Mobile Advantage

A study by MasterCard found that 8 out of 10 consumers now use a computer, smartphone, tablet, or in-store technology while shopping. Success in any retail endeavour means harnessing mobility, and in the liquor industry – where an outlet’s customer base is largely local – proximity marketing will be crucial. Find a way to offer downloadable flyers and coupons on your website, connect with customers via their smartphone to direct them to promotional specials, and use SMS messaging to merchandise old stock.

8 out of 10 consumers now use a computer, smartphone, tablet, or in-store technology while shopping.

“We are fast approaching a place where mobile technology will offer retailers a channel that will create a perfect synergy between payments, loyalty, marketing, and advertising,” says Jon Worley, CEO of a leading proximity marketing firm. “The mobile device is becoming an essential part of a customer’s shopping journey across the board.”

Technologies like QR codes and Bluetooth Low Energy (BLE) beacons, sensors that are embedded digital touch points like shelves, signs, and product displays, help customize a shopper’s experience and provide an opportunity to engage with customers via their smartphones. Karen Spear, a director of shopper marketing, comments, “Interactivity is the new visual merchandising and has many different applications in the retail space. It can add value to a customer’s shopping experience through entertainment and education, encourage the decision-making process, and demystify more complex categories.”

Mobility is also impacting click-and-collect initiatives such as having the store send out notifications whenever an order is ready for pick up. One enterprising outlet is even testing a new car-hop service. The customer texts or calls their arrival, an employee meets them outside and delivers their order directly to the trunk of their car.

Digital Depth Displays

Physical and digital integration means rethinking traditional sales strategies, or at the very least, augmenting displays with new visual merchandising techniques and concepts. On this front, the buzzwords for 2016 are depth deception.

Inbuilt monitors, LED screens, and almost frenetic levels of digital content are becoming visual merchandising staples to broadcast in-store advertising messages. Table displays can now engage shoppers with cocktail recipes at the swipe of a finger, while kiosks with touch-screen computers can function as interactive sales tools, allowing customers to learn more about products and services and even place orders.

Look also for wall displays with cubbyholes that contain LCD panels showing digital images of various products. Static displays will start to take on new life with images that can change to offer special sales, promotional features, or a particular brand. Images can even change throughout the day according to who shops at what time.

Table displays can now engage shoppers with cocktail recipes at the swipe of a finger

Worley explains, “As technology broadens marketing and merchandising techniques, it’s important to know your customers both online and offline. Analyzing them together will give you a more comprehensive picture of your customer’s shopping habits and tailor on-site merchandising accordingly.”

Retail is Detail

Trending technology aside, several traditional merchandising concepts are always worth reviewing (see sidebar), especially in a weak economy. “There are a lot of unpredictable buying patterns out there at the moment, but as with other downturns, it’s the tried and true that seem to stay the course,” says Rod Archibald, an industry veteran with a wines and spirits agency. “It’s a question of keeping it clean, and keeping it simple. Just making sure neck tags have up-to-date scores (and not from 2014), or a quality quote associated with the product can freshen up a display. Removing outdated information and offering time-limited discounts really help to move old product.”

Archibald often adds Twitter, Pinterest, and Facebook handles to shelf-talkers, inviting customers to comment on social media. “These vehicles let us gauge attitudes towards a particular product beyond just sales numbers,” he continues. “Not only do they enable us to engage customers with specials, promotions, and events, but keeping an eye on posted comments can guide displays and help us make products more appealing.”

Other tried-and-true merchandising strategies include the following:

• The power of end-of-aisle locations is no longer anecdotal. An observational study has shown that alcohol sales can increase significantly: beer (up to 23%), wine (up to 33%), and spirits (up by as much as 46%). This is prime space for high-demand, seasonal, impulse, or promotional items. A common end-cap technique is grouping together related items to encourage add-on sales.
• Micro-merchandising can still steal the show in an otherwise mundane middle section of a long aisle; make it intriguing enough to have customers stop in their tracks. Display the most profitable items between belt and eye level.
• Theme displays, especially as a method of cross-merchandising to tie in with a community or seasonal events, will always earn customer support.
• Partner products help push sales too, as in upscale olives near martini mixes, cocoa beans around Kahlua, or truffles as part of a craft beer tasting.
• Décor stimulates buying. Showcasing vintage objects and creative artwork encourages people to stay longer in your store.
• Category displays, a store-within-a-store as well as pop-up walls that feature just one or a minimal amount of brands create interest. Use the “good, better, best” approach so the shopper has a choice of quality. Double and mass facing a single product vertically, horizontally, or as an eye-catching waterfall are proven winners.

The Eyes Have It!

If the art of silent selling is to appeal to as many customer senses as possible, then knowing your customer is essential to that equation. So here’s a peek into a future that top fashion houses are test-marketing as the first of many retailing sectors. Using cameras behind their eyes, mannequins are recording a customer’s every nuance, using facial recognition technology to gather data about the people who stop to view displays. According to the Association for Retail Environments, the information determines how long people look at the display as well as their gender, race, and age. These mannequins are taking customer profiling to a whole new level of merchandising, and watch out, they could be coming to a store near you!