The growing significance of customer-centric merchandising

Putting customers at the heart of product placement

The dynamic nature of retailing means that those operational within the industry are constantly required to innovate and evolve so that they can continue to attract customers.

However, it’s not solely about attracting customers – from a retailer perspective, ‘they are not all created equal’.¹ It’s about attracting the right ones, the shoppers that make up a retailer’s target audience.

These shoppers are most likely to:

• Provide the highest returns
• Shop with the largest baskets
• Be the most loyal to a particular brand or retailer

With competition across the retail landscape continuing to tighten, catching the eye of the right shopper with the optimum assortment is vital.

Retailers need to adopt a more data-driven approach to in-store merchandising to improve the likelihood of each individual store serving the needs of their most regular customers.

This approach focuses on centring product ranges around the requirements of shoppers, demonstrating an acute awareness of their needs and preferences with a view to eliminating the threat of shopper migration and driving a sustainable uplift in customer satisfaction levels.

In implementing a merchandising strategy which is wholly customer-centric in nature, grocery retailers commit to understanding their customer groups. This involves learning about the preferences of different demographic groups, discovering which products and product ranges have resonance in particular stores, and recognising those that don’t – ultimately reaping the rewards of their strategic foresight.

Research led by Washington State University found that retailers could boost profitability² by engaging with data-driven approaches to in-store merchandising, whilst analysts at Gartner believe that retail is transforming by way of a ‘seismic shift toward a new merchandising model in which customers, not products, are at the center of merchandising processes’³.

As competition among grocery retailers tightens – and shoppers become increasingly more vigilant about where their grocery dollars are spent – knowing how to appeal to your target shoppers is key to sustainable sales development.

Customer loyalty, often difficult to attain, can be alarmingly easy to lose. Best-practice processes for achieving on-shelf availability (OSA) and promotional compliance are imperative to keeping shoppers satisfied. Our cloud-based PromoInsight and AvailabilityInsight solutions enable retailers to optimize promotion implementation, improve OSA ratings in-store and drive profitability, allowing both merchants and their shoppers to benefit. 

Learn more about the ways in which Retail Insight can enable your stores to reach their full potential and master a customer-centric approach to merchandising here.

References

¹ https://www.forbes.com/sites/walterloeb/2023/06/28/why-the-customers-must-come-first/?sh=13ad93682358 
² https://news.wsu.edu/press-release/2023/02/08/new-way-to-rearrange-store-products-could-boost-impulse-buying/ 
³ Gartner, Retailers Must Drive Customer-Centric Merchandising With an AI Core, 2023