Merchandisers can drive sales

July 21, 2023
/ SKUBlog
/ By Susan Sipos

Our industry has its own language and we are working to help people understand many of the terms we use. We do believe if we are talking the same language, we have a better chance of building prosperous relationships between suppliers and retailers.

This week we have a twist for you…one word with two meanings. Not only does the food and beverage industry have our own definitions to really confuse things this word can be defined two ways!

Merchandisers can be defined as:

1) A stand-alone unit that holds product for display. Often these racks can be positioned to deliver incremental sales.

2) A person who travels from store to store to ensure certain products are displayed properly and programs are implemented. Merchandisers can also be called reps and they can work for specific food and beverage companies or brokers.

Merchandisers can drive sales

The racks

The stand-alone racks can be very effective to deliver sales for your products. For some products they are the first point of entry into larger retailers. If the plan o gram is full and there are no changes planned for a while some suppliers will offer to pay for merchandisers and get the product into the store. Proof of sales will be enough to get into the plan o gram.

One great benefit of merchandisers is they can be moved around the store. They work very well for impulse items. The classic examples are hot dog and hamburger buns in the meat department on a sunny summer weekend. Consumers have already passed the bakery (in most Canadian store layouts) so if they decide to have a BBQ for supper when they are in the meat department, you can get them to buy the buns from the rack.

Merchandisers give suppliers more real estate to tell their story and focus attention on the benefits of your products. Signage on the shelf is hard to get and if you are paying for the rack take advantage of every inch to get the attention of your target market.

The people

Merchandisers can make a huge difference in the sales of your products. Often products get to the store but never get to the shelf. This is even more important for seasonal or short shelf-life products. A person focused on certain items will check to make sure they are where they are supposed to be, when they are supposed to be there.

Often suppliers will invest trade spend in promotions but be frustrated by lack lustre results. Merchandisers can check to ensure displays are built and products are priced properly. Retailers should do these things but they aren’t perfect and if you want to control more of your destiny this might be an investment you need to make.

Good merchandisers can also get more space for your products and get them into the right space. They need to build relationships with store employees and work to get their suggestions implemented. If we go back to our hot dog and hamburger buns merchandisers can suggest big displays by the front door going into a weekend with a good weather forecast. Stores should think about it but they do have different priorities like managing labour and shrink.

Merchandisers cost money

The racks

It can be a significant investment to put racks in stores. Like packaging the more you buy the cheaper the per unit cost will be. There are many options ranging from cardboard ‘shippers’ to more permanent wooden or metal racks. Investigate the choices and the more robust the rack the longer it will last. Stores are tough environments. Consumers run into everything with carts and then the night crew will come in with pallets. You will lose some racks.

Get the permission from retailers before you commit to a merchandiser program. Often it will be someone other than the category manager who will have to give you the go ahead. There can be a lot of debate about these in stores. Merchants like them because they drive sales and they can often generate some over and above money from the program. Store operations people like the stores to be ‘clean’ and easy to maintain. Merchandisers can get in the way. They can be caught up in a battle between the merchants and the operators. Usually, the supplier does not win. When you do get approval get it in writing and share this with stores.

The people

Having your own merchandisers or reps is expensive. The costs add up when you consider salary and expenses for the geography they must cover. Dense urban markets where people are home every night are much more cost effective than rural markets where they have to stay overnight and eat.

To ensure you get the best results make sure there are targets for sales and execution. Just checking in will not deliver the return you need. You can also partner with other suppliers to have people looking at a number of items and spread the cost amongst the different companies. Another option is to work with a broker who has a group of merchandisers dedicated to the stores. Often, they have established connections and you will pay a percentage of sales.

There a benefits and costs to merchandisers. Measure the results and determine if the racks or the people, or perhaps both are right for your business.

If you have any questions about merchandisers, you can always send me an email peter@skufood.com or call me at (902) 489-2900.

Peter

A regional item that still earns a spot on the shelf

When I was at Loblaw the company was still operated with 4 regions and there were some significant differences from west to east. When they started to collapse the regions, we had some big battles internally about some items and how we did things. Flour is sold in a different sized bag in Newfoundland, which is directly related to their recipe for bread which takes ‘1 bag’. That would not be the 10kg bag sold in other provinces.

It was only when I read this article did I realize Moon Mist ice cream is an east coast item. Not my favourite flavour but apparently popular with many out here. One unfortunate reality of national retailers is we will lose regional items. It is more efficient to have one plan o gram from coast to coast. Perhaps not better but more efficient. Hopefully there will always be room for Moon Mist and other regional items.