How Visual Merchandising Can Help Boost Supermarket Spending

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How Visual Merchandising Can Help Boost Supermarket Spending

By Karl McKeever - 09/09/2009
Visual merchandising (VM) is an indispensable retail discipline, consisting of a series of practical selling tools that are used to influence what and how much consumers buy. Successful retailers -- supermarkets in particular -- can employ effective and integrated VM practices as part of the retail experience and overall brand delivery, to successfully maximize sales and profits in-store -- essentially, it’s a silent selling service of sales-driving levers and tools.

VM specifically involves store and product presentation, including wide-ranging and interconnected disciplines of space management, display, promotional activity and seasonal events. VM makes shopping easier for customers, saving them time and hassle, while providing inspiration and ideas on what to buy. For retailers, good VM maximizes the value of store space and develops stronger commercial performance, at product line, category or store level.

Store Layout
Making the most of the available floor space is vital to achieve increased product volumes, productivity, conversion rates and transaction values. When this is planned correctly, customers are attracted to certain areas of the store and encouraged to purchase the goods alongside.

Supermarkets prioritize the location of certain items that are on promotion to increase sales. There is currently a trend of placing bargain offers and ready-to-eat snacks on the central islands, directly opposite the entrance or “dwell zone,” which makes sure that shoppers immediately spot them. Whether customers are entering the store in a hurry to pick up flowers, newspapers or cigarettes, or embarking on the full weekly shop, these items will catch the eye and provide a quick impulse reaction.

There are certainly some outdated theories when it comes to supermarket layout -- one of them being that fruit and vegetables should always be the first section that the consumer arrives at. In reality, the biggest superstores don’t necessarily position it first anymore; impulse and discretionary items such as clothing and general merchandise goods often share priority at the entrance.

However, fruit and vegetables still tend to be one of the “first of the fresh,” being closely associated with meat and dairy items for quick and easy meal planning. This can be partly linked to the fact that retailers recognize their responsibility to promote healthy eating, and therefore use large points of sale and spacious aisles for customers to feel obliged to walk through and automatically pick up some groceries.

In a way, there’s an element of guilt if shoppers sweep past the nutritious food items and go straight to a different section, and supermarkets are aware of this. Fresh foods are also often high in margin yield, making them profitable items to sell, provided they are quickly sold and not lost as waste -- another reason for keeping them highly visible to consumers.

Another break from tradition can be found at checkout, where many supermarkets are less keen to be associated with promoting confectionary lines. Although this can again be linked to pleasing the health-conscious consumer, it’s also a shrewd move by the supermarkets, which have chosen to replace them with leaflets for more lucrative services, including banking products and high-margin-yielding women’s magazines. The premise is that if a customers pick one up while waiting in line, she’ll probably be likely to add it to her own shopping cart.

Shelf Psychology
Shelf psychology is crucial to influencing consumers. Supermarkets use all kinds of techniques to seduce people regarding what and how much they buy. Here, data analysis of cost and selling price, profit margin, rate of sales and associated data plays a big part in where products sit on the shelf.

Products placed on shelves at eye level will generally sell fastest, whereas bottom shelves are slower because they’re less visible. This means the position of every line can be planned with almost forensic detail based on the brand, price, popularity and how much effort people will be required to make simply to put a product in a cart.

It’s for this reason that some of the most popular and frequently purchased goods can end up at the bottom of a display, when arguably, they’re placed in the least favorable space. The retailers will then use the prime space to promote special offers or their own brand lines, which often carry a higher margin and are less easy to compare like-for-like on price.

The most profitable impulse buys and special offers are placed on end caps. Supermarkets are designed to ensure customers pass as many ends as possible to increase further sales. This highly valuable space is often sponsored by the manufacturers and brands positioned there, which are keen to ensure their product offers are promoted in the most visible positions. The cost of this opportunity will be reflected in the deal that stores strike with their suppliers to occupy this space.

Sales Techniques
There is a variety of other sales techniques employed by supermarkets to increase the average customer spend. By strategically placing similar products adjacent to each other, multiple sales and higher transaction values are encouraged.

All-inclusive solutions such as recipes and meal suggestions will inform, inspire and ultimately influence customer purchases, too. High-margin meal combinations are often suggested to the consumer. They appeal to shoppers, as they appear to be a great timesaving option, while at the same time they increase revenue for the supermarket -- a subtle example of retailers spending customers’ money for them!

At the opposite end of the VM scale are clip strips. These innocuous-looking bits of hanging plastic strips are used to create additional selling space by literally hanging off the shelves. By suspending these devices alongside other goods, stores can generate enormous additional revenues that really rake in the cash.

Think of strainers next to the teabags or rubber gloves with the dishwashing detergents. In fact, some stores don’t even bother to make “perfect partner” relationships between what’s on the shelf and what hangs alongside -- my favorite recent example being corkscrews hanging within the washing powder aisle.

In the United Kingdom, one new trend to appear in recent months is the £1 deal. Whole “round pound” price points are generally more appealing to shoppers, so this is a clever way of luring the consumer into buying new items, which may have otherwise remained on the shelf. Everything from multipack chips to jars of jam is being promoted in this way to make an appealing value offer to the consumer -- one that’s hard to resist.

Digital vs. Traditional
There has been a great deal of discussion about the increased use of digital media in retail. In terms of its usage in supermarkets, the majority of us in the sector feel that it’s somewhat of an industry-only phenomenon -- that is to say, that the industry wants shoppers to embrace digital media, but in reality, traditional static cardboard point-of-sale material still seems to work best -- and that there’s an element of customers “trusting what they know” in this, too.

More traditional point of sale remains highly noticeable, which is a paradox, given that moving images have been proved to attract the eye better. However, the nature of digital media is so transient that it fails to hold people’s attention in quite the same way as hanging and on-shelf POS materials.

This isn’t to say that digital media should be consigned to the retail scrapheap. It could well become more widely used in future, but only after supermarkets have given more thought to the best way to use it. There is also, of course, the factor of cost, which has already proved prohibitive for some retailers. As payback isn’t realistic for most modest stores, it could be considered an unnecessary expense, particularly given the current economic climate.

For more inspiration and examples of best practice when it comes to VM in supermarkets, take a look at Sainsbury’s and Tesco (Local) in the United Kingdom, as well as Carrefour in the United Arab Emirates, Whole Foods Market in the United States and Waitrose in Dubai. All of these supermarkets employ some of the techniques mentioned above, and are reaping the benefits in terms of traffic and sales.

Karl McKeever, brand director of the United Kingdom’s leading visual merchandising and brand delivery consultancy, Visual Thinking, has worked with top high-street retailers and international brands, including food retailers ranging from Sainsbury’s and Iceland to Marks & Spencer and Tesco. For more information on brand delivery, visual merchandising and store presentation, contact Visual Thinking at +44 (0)116 278 6176 or visit