Visual merchandising is a comparatively new career field in which has sprung up with the growing popularity of window and floor displays. Visual merchandisers main area of work is to create impossible window displays. They can find employment with fashion boutiques, shopping malls, euphoria etc. They are also engaged as shop floor mangers. They can also do freelancing on contract basis for windows displays in exhibitions, fares, and other places. Other career options under this head are production coordinator, quality control supervisor, fashion retailer, export manger etc. This paper discusses importance and potential for visual merchandising professionals.
CRITICAL ISSUES OF VISUAL MERCHANDISING
ROLE OF VISUAL MERCHANDISING
SCOPE FOR CAREER DEVELOPMENT
Selling a product (convenient/shopping/specialty) is incomplete without communicating its image. To build long term brand loyalty, in addition to the quality of the product, right image is very much needed. To attain this, many companies invest huge money the promotions. But many businesses neglect the retail front which is the face of the brands. In other words, the way the products are displayed at the retail shelves, the way the sales people communicate to the consumer etc. are the some of the issues, which if not handles well can be a great threat to the brands image. Visual merchandising is the art of presentation, which puts the merchandiser in focus. It educates the customers, creates desire and finally augments the selling process. This is an area where the Indian business people lack adequate knowledge and expertise. This inadequacy is best reflected in poor presentation/display and communication the various national and international exhibitions with phasing out of quantitative restrictions after the year 2004, the textile industry will have to compete purely on the competitive edge of the products and visual merchandising will be helpful for the projecting the uniqueness of the products and thereby increasing the market access and sales. It is high time that the Indian textile and clothing industry should understand and adopts the scientific and professional system of visual merchandising rather than the traditional practices of display of products and communication.
CRITICAL ISSUES OF VISUAL MERCHANDISING
Retailing them itself has transformed the way business is done and the so called merchandisers of disposition of store inventory. There are many ways and standard procedures to ignite sales, increase profits and maximize the net worth of the business. Visual merchandising helps in this respect. This calls for a concerted industry efforts to approximately value the importance of quality retail coverage such as self-integrity in store advertising, price verification, stock rotations, new item-cut and other related activities. To make effective the retail business one has to focus on the following critical issues of visual merchandising.
a) Graphics and signage: attention grabbing yet clear graphics by way to visually communicate the brand and these graphics when compiled with the right signage become the stalls complete instruction manual.
b) Trends and moot boards: This is misunderstood by many as mere decorations for the stall. The brand sources and moot boards convey the source, in fact the mere need of the product for the consumer to the buyer. A good trend story board display can exhibit a thought process nursing for the inspirations (research, to swatch development of the final usage of the product.
c) Space management: Most displays concentrate on the floor management of space. In order to create a complete desired ambience the ceiling space should also be given enough attention. Walls are not elastic space should be allocated to the available products as per the expectation of the customers to deliver best results. The major issues of space management are:
1. How do we want our ranges to look?
2. Hanging/stocked/customers etc.
3. What stock density do you want to achieve?
Generally, the more options/units you can hold for a given amount of space, the higher the potential returns. Space landing systems can be split into two types
Numeric and visuals: Numeric planning system simply allow users to account of space available and to calculate the ratios like returns on space. Visual systems allow users to create three dimensional walk through models of the stores and to preview the look of a store once ranging decisions have been made.
d) Dresiforms and mannequins: The dresiforms communicate the 3 dimensional form of the product. Along with the fit a good mannequin can also be customized to communicate a character, for example, special kids wear mannequins with caricatured faces convey the playful mood of the collections.
e) Synergy among the different stalls: A stall look should compliment the mood the whole fair too. So some visual elements from the fair, be it a color scheme or some material used should also be incorporated in the stall.
f) Out of the box thinking: With so many stalls around, it sometimes focus some stock value to grab the attention of the buyers. Innovative ideas in displaying the mannequins, swatches etc can invite many more people to the stall.
g) Merchandise planning: The first function of merchandising planning is making a strategic plan, which is normally for a five years or more and is used to set the critical success factors for merchandising in terms of sales, margins and stocks. Next in a channel sales budget to take into account the effect of the new channels, new stores, closures, and refits. In simple words merchandising planning is a systematic approach and aiming at maximizing return on investment, through planning sales and inventory in order to increase profitability. It does think by maximization sales potential and minimizing losses from marked down and stock cuts.
h) Range planning: Begin with assortment plan. In assortment plan, the goal of merchandise plan are divided into specific lines and such a way that the division results in the increase of overall marginal mix. Then a distributions planning in done. The link between available physical space and ranging done here is a key determinant of merchandising performance.
ROLE OF VISUAL MERCHANDISING
Visual merchandising is an artistic method to ensure that retailers merchandise moves off the shelves faster. It’s a tool to appeal to the visual sensory elements of the customer. Visual merchandising is an unknown skill which is fastly becoming popular nowadays with the introduction of self service in retail stores in recent years and the number of changes taking place in super market merchandising methods, there has been increased emphasis on the kind of store layout, store building, fixtures, and equipment, color displays, silent communication tools, window display and finally opinion building through in store displays which has taken the art of retailing the higher applications frames.
Customer expects to spend less time for shopping and prefers one step multi brand retail formats and hence significance of visual merchandising is on increase. As per the opinion of Hemendra Mathur, senior consultant of KSA technopark based on the third annual consumer outlook study that the consumer is getting time saved and the time spent on shoppin (both grocery and non grocery) has come down. Further the study reveals that are increase in the impulse and unplanned purchases in the certain categories. Visual merchandising helps in the increase of impulse buying.
The practice of a visual merchandising is negligible in durables and home textiles and in the apparel and foot wear it is 20%. Many people experience in organized retailing are of the opinion that innovative application for effective retail presents and brand buildings are being used aggressively by companies in retail merchandising. Brands like Reebok spent 25% of their advertising spent on point of sale merchandising. The brand managers of Reebok feel that 80% of the buyers are influenced by the 3 feet experience i.e, point of sales material and visual merchandising are more effective than outdoor displays and advertising.
Market analysis feel that most companies are unfortunately not spending as much time and money as they should on POS (point of sales) visual merchandising as a strategic tool for brand building, indiscriminately “displaying everything rather than displaying selectively and effectively to assist consumer in taking decisions.
Visual merchandising helps in:
a) Establishing a creative medium to present merchandise in 3 D environment, with which a long lasting impact and recall value.
b) Combining the creative, technical, and operational aspects of a product and the business.
c) Educating the customers about the product/services in an effective and creative or innovative manners.
d) Drawing the attention of the customer to enable him to purchase decisions in the short space of time and this augmenting the selling process.
SCOPE FOR CAREER DEVELOPMENT
Retail business analysts feel that the average spending on POS and merchandising displays is RS. 1000 per square foot in the organized retailing whole size is Rs. 14,000 crores of the total (both organized and unorganized is Rs. 11,00,000 crore. Further analysis reveal that the multi brand retail formats (hypermarket) are storing 35% growth rate per annum which is the storing indicator for the bright and huge scope. For the visual merchandising professionals who have experience in designing effective store layouts, color displays, the use of creative silent communication skill tools, creative window display, and in store displays. The curriculum of visual merchandising includes generally the following fields:
a). Creative art.
b). Specific application to retail.
c). Techno commercial planning and execution.
Students of management looking for employment can find opportunities in departmental stores, super markets, malls, and hyper markets as visual merchandiser. Further those who have entrepreneurial streak can look for event managers or interior designers professionals.
Make Money From Home With Merchandise at 90% Below Wholesale
Yes, that’s what I said… you can make money from home with brand new, untouched retail ready and packaged merchandise for up to 90% below wholesale.
You can sell this merchandise for substantial profits yourself, or to businesses that want new merchandise at a deeply reduced cost.
Let’s say that you have an online store or offline shop that sells boxed computer software. Or perhaps you want to sell inventory to other retailers and vendors.
Suppose you heard about a hot selling software that retails for $29.00 with a wholesale of $14.55.
A terrific profit maker, this item may become available at a deeply reduced cost.
There would nothing wrong with this merchandise when deeply discounted. We are not talking about returns, damaged, distressed or defective items. Every piece is brand new and ready to use.
But once discounted it will be available to those who know where to look for it at up to 90% off wholesale… or more!
That makes our example of the boxed software that retails for $29.00 potentially available at $1.45 or less.
Don’t fall of your chair. We worked a deal exactly like this, EXCEPT that we did not pay even $1.45 a piece for the software. We paid much less and sold all of them to a retailer. This retailer placed display ads in the Sunday newspaper as customers flocked to their stores to buy every piece.
Now, you may be asking how you can find merchandise like this to resell for handsome profits to retailers and vendors or individually in your own retail business online or offline.
First, you have to learn:
What is this Merchandise?
The merchandise we have been discussing is nothing more than unwanted or leftover merchandise. Warehouses in every state and city are teeming with it, ready for the retail stores… but without a home.
Some reasons why retail merchandise may become available at such deep discounts..
1) Overproduction – a company may have produced more than their regular customers could buy.
2) Change in Packaging– A seller may update box or packaging designs or graphics, rendering the previous packaging design obsolete.
The item inside may be exactly the same..but since the packaging is no longer used, the merchandise MUST be sold to make way for the new packaging design.
3) Product Updates – a product may undergo a revision. Software programs are updated, cosmetic lines may add or subtract an ingredient, a new material may be used in production, the item may be improved in any a number of ways.
4) Change of Season– Items that are all the craze during the summer may not be as hot a seller in the fall. Smart buyers stock up and sell them at a sale price or hold them till the following summer. Either way, the profit potential can make any entrepreneur smile and ask for more.
This merchandise is perfectly usable and in fact highly desirable to retailers and their customers who want to buy that item at discount
In fact, there are retailers that buy this type of merchandise on a daily basis. And vendors of all kinds that make it a point to search for sources of retail ready discounted merchandise that they can sell to hungry, cash ready buyers.
I know this to be true because for more than a decade we sourced, and sold all kinds of leftover, deeply discounted merchandise on a retail basis and by the truckload.
Some types of merchandise we worked with includes:
- retail software
- computer games
- paper goods
- plastic ware
- leather goods
- greeting cards
- potato chips
- computer accessories
- office supplies
- holiday decorations
- canned food
- canned drinks
- pet supplies
- soy milk
- sporting goods
- garden supplies
- home decor
- hair care products
- skincare products
- camping equipment
- BBQ supplies
and too much more to mention here.
Walk into any store and make a list of the things you see… at some time or another it is highly likely that the items you note or something similar will be part of an inventory of leftover, deeply discounted merchandise.
I am going to let you in on a little secret. 96.3 % of the people who decide to jump into this business FAIL… because they don’t know one simple rule.
What is it?
You MUST know how to find the merchandise.
Once you do, you can sell the merchandise piecemeal online or offline or by the truckload, no matter where you live.
Hint: Stay away from sites selling this type of merchandise on the internet. The profits have already been devoured once the item is listed.
Source your merchandise properly and you may well be on your way to a lifetime of success and freedom.
The Secret of Effective Online Merchandising – All About Behavioral Merchandising
Behavioral merchandising is the art and science of using customer behavior to place, promote and display products in order to maximize retail sales revenue. In an online retail context, examples includes using data on where visitors come from, what they search for, what they click on and what they buy, to drive as relevant product promotions to each visitor at every point of interaction as possible.
Example applications include features such as “people who, like you, came here from… searching for… usually ended up buying…” and “customers who bought this item also bought…”.
Behavioral merchandising was originally made famous by Amazon.com, but has evolved much further. Today, it is practiced at online retailers everywhere on the globe – companies whose turnover can be anything from $1 million to $1 billion and beyond.
The popularity of behavioral merchandising stems from the fact that it has been proven to be up to 300% more effective than customer segmentation in impacting sales per visitor through raising conversion rates and average order values.
Behavioral merchandising offers a personalized shopping experience for visitors that is highly relevant, trustworthy, and that adapts to changing customer preferences automatically. The automation aspect also means it offers retailers an opportunity to cut costs of manual merchandising, while at the same time achieving better results.
What is merchandising?
“Merchandising means maximizing merchandise sales using product selection, product design, product packaging, product pricing, and product display that stimulates consumers to spend more. This includes disciplines in pricing and discounting, physical presentation of products and displays, and the decisions about which products should be presented to which customers at what time.”
An Established Practice
To explain behavioral merchandising it is beneficial to first look at its roots.
Merchandising is a relatively old practice used by retail stores to increase sales. Some well-known examples of traditional merchandising include placing and promoting – Candy by the check-outs – Children’s yogurt at the eye level of children – Milk at the back of the store
Predictably, merchandising has migrated into electronic sales and is today a natural part of every major e-commerce site. As in the traditional sense, electronic merchandising is about maximizing the conversion rate and the average order value through displaying the right products in the right way to the right individuals.
Why Merchandising Matters
We have established that retail merchandising is the art of increasing sales, in other words maximizing sales revenue from a given audience of visitors to a retail outlet. To understand the importance of merchandising, we must also put it in relation to advertising, which is basically the art and process of driving an audience of visitors to the outlet in the first place.
A retail outlet will typically want to spend a given amount of money on advertising to drive as much relevant traffic as possible to the outlet – maximizing the performance metric cost-per-visitor or cost-per-click as it is often referred to.
The retail outlet will then want to practice the best possible merchandising in order to convert this traffic into as many buying customers as possible – maximizing the performance metric conversion rate. To generate as much value out of the traffic generated the retail outlet want to make each visitor to buy as much as possible – maximizing the performance metric average order value.
In short, the success of the retailer’s efforts in maximizing cost-per-visitor, conversion rate and average order value will more or less define the sales revenue generated by the outlet. Adding the cost-of-goods-sold margin or average product margin completes the model to define the operating profit that the outlet will generate.
It becomes clear that there are basically four levers that the manager of a retail outlet can pull to try to maximize profits. Unfortunately not all the four levers are under the retailer’s control.
The ultimate aim of advertising, merchandising and purchasing combined is to maximize the operating profit of the retailer. Four key performance metrics that define the success of this process – Cost Per Click, Conversion Rate, Average Order Value, and Cost of Goods Sold margin. But only the Conversion Rate and Average Order Value metrics, which together quantify the success of the merchandising process, are directly under the retailer’s control. ‘ In an online environment much of the traffic is purchased along a CPC-model. CPC is the cost-per click or cost-per-visitor paid to a media company for each visitor driven to the e-commerce site. The CPC-prices are relatively perfectly priced through supply and demand. The retailer must simply pay what the market demands for advertising.
The gross margin for products sold is primarily dependent on the success of the other levers, i.e. on the volume bought by the retailer – so it cannot be pulled independently. This leaves the retailer with two levers that are in his control to maximize: the “conversion rate” and the “average order value”. Together they quantify the success of the retailer’s merchandising process.
In other words, merchandising offers the two levers for profitability that is uniquely in the control of any given retailer to maximize the revenue in order to deliver better financial results than the competition.
Three Methods Of Merchandising
Electronic merchandising can be divided into three methods: mass-, segmented- and personalized merchandising,
Each of the methods can be found also in “offline” retail merchandising – Mass merchandising: The approach that by necessity is used in stores, as the store assortment is the same for every visitor. – Segmented merchandising: The approach typically used by mail order companies, in which separate catalogues are constructed to match the expected interests of a certain user demography (e.g., region, age, gender) or product category. – Personalized merchandising: Shopping assistants or “personal shoppers” who guide the visitor through the store highlighting and recommending items based on their understanding of the user’s profile and needs.
The mass and segmented approaches are typically top-down approaches; one or a small group of people (employees of the retailer) creates and manually administrates the merchandising.
Personalized merchandising is almost inherently a bottom-up approach as it is impossible or exceedingly expensive for the retailer to manually create personalization for each and every customer or product. Bottom-up meaning a web 2.0-like approach, in which all visitors contribute to the merchandising either explicitly (by submitting ratings, reviews, listings etc) or implicitly (by the data they provide through their actions taken on the site)
Explicit contributions are typically made intentionally by a smaller sub-set of all visitors – according to usability expert Jakob Nielsen, as little as 1 out of every 100 users on a typical social site. All visitors, on the other hand, inherently make implicit contributions – intentionally or not. Combined, these user generated contributions can be mined as a collective and form the basis for behavioral merchandising. ‘ What is behavioral merchandising?
Behavioral merchandising (“BEM”) means using customer contributed behavioral data to automatically achieve a credible and efficient merchandising. BEM was made famous through Amazon’s implementation of “those who bought this also bought”, but has evolved to be much more than that. One might call BEM the combination or intersection of retail merchandising and social networks. In effect, BEM in an online retail context means turning an e-commerce site into a social network focused on creating a pleasant, socially interactive and interesting personal shopping experience for visitors.
As mentioned previously, there are two types of BEM; implicit and explicit. With implicit BEM the actions that are taken by customers – click patterns, searches done, products purchased – are analyzed and used to create the merchandising. Explicit BEM is when customers explicitly say something about a product, for example submitting a review or recommending a product to a friend.
– Those who bought this also – Recommendations based on the product currently being viewed. – Based on all your previous interactions with us, our community of users thinks you’re looking for… – Recommendations to an individual customer. – Based on the contents of your shopping cart, our community of users thinks you might want to add one of the following items… – Recommendations based on the content of the basket. – Based on the way you’ve navigated our site so far, our community of users thinks you’re looking for… – Recommendations based on clicks made on a site. – Those who searched for… selected…. – Recommended search results. – Those like you who came here from… searching for… usually ended up buying… – Adaptive landing pages based on the search phrase used on an external search engine such as Google, which site a visitor arrived from, and visitor data such as browser, operating system and language.
Explicit – Ratings & reviews – Share this product with a friend, e.g., by email, link or to a social network – Customer-created product lists
Social Network Service “A social network service uses software to build online social networks for communities of people who share interests and activities or who are interested in exploring the interests and activities of others.” Source: Wikipedia
The Value Of Behavioral Merchandising
The ultimate rationale for BEM lies of course in the superior contribution to financial success that it brings to retailers in comparison to the other available approaches to merchandising. Studies have shown that measured as revenue-per-visitor (i.e., the combined contribution to conversion rate and average order value) the contribution of BEM is up to 300% greater than the contribution that a segmented merchandising approach will give.
The primary explanations to the superior results delivered by BEM lies primarily in that BEM is: – Relevant: Because all customers combined are always more likely to collectively possess greater knowledge about all products as well as the way they are purchased and consumed than a limited team of professional merchandisers. BEM gives each individual visitor a more personally relevant shopping experience, helping each one to find precisely the products or promotions that is most relevant to them in each given situation. FIGURE 3 – COMPARING BEHAVIORAL MERCHANDISING WITH OTHER APPROACHES Personalized merchandising using behavioral methods has proven by far the most effective In studies conducted by Avail at customers, behavioral merchandising has generated up to 300% better results than segmented merchandising by being more relevant, trustworthy and adaptive.
– Trustworthy: BEM is ultimately generated by peer consumers, as opposed to by marketing professionals which is the case in all other approaches, and thus creates trust. Research clearly shows that consumers are much more likely to trust peers than professional marketers, in particular online.
– Adaptive: Because BEM can be made to take into account the collective behavior of all visitors in real-time, it can respond to quickly changing – and sometimes fickle – preferences of visitors and consumers and it can apply that response in real-time from one interaction to another by the same visitor during a visit to the outlet.
Apart from the superior contribution to revenue-per-visitor, BEM has several other advantages over other approaches, including the fact that it can be made highly or completely automated, requiring no on-going human administration or maintenance and so reducing the cost of merchandising operations, even for very large product ranges and very large groups of visitors.
Getting Started With Behavioral Merchandising
In the infancy of behavioral merchandising, e-commerce retailers were often forced by necessity to create their own software, as 3rd party solutions were either unavailable or not mature enough to be practically useful.
However, due to the sophisticated algorithm development necessary, as well as the general cost and organizational impact of large-scale software development, more and more retailers are abandoning in-house developed solutions for cost-effective and proven online merchandising platforms from established vendors such as Avail Intelligence.