Visual Merchandising and It’s Role in Retailing

Visual Merchandising and Its Role in Retailing:

To understand the key role played by Visual Merchandising in retailing, one has to look at the whole scenario with a macro view i.e. to study the entire spectrum of its existence about retail strategy and store design. We have studied earlier how retailing is consumer-centric. The retailer aims to satisfy the customer as well as make profits. Visual merchandising is a means used to attract customers, keep them in-store to make planned and impulse sales.

Definition of Retailing:

Retailing is derived from the French word “retailer” which means to cut a piece or to breakbulk. According to Kotler “Retailing includes all the activities involved in selling goods or services to the final consumer for personal, non-business use”. In Retailing the products and services are distributed to reach the final consumer in time for their proper utilization.

Introduction to Visual Merchandising:

The visual merchandiser is aware of the retail strategy and the company goals of the retailer to project the same in the store. Earlier retailers used advertising as the only media to attract customers to the store. Today each retailer creates a distinctive image based on its retail strategy. The retailers are trying to pull more and more consumers towards them by providing consumers the advantage of good price, quality, availability of the product, a good product mix, [i.e. which covers all segments e.g. kids, ladies, men’s, home furnishing, bed and bath, cosmetics, perfumes, and other accessories, etc.], a wide spectrum of brands [e.g. casual, formal and ethnic, domestic, international, etc.] along with good service.

Retail strategy- A mission statement for the retailer:

In visual merchandising, the visual merchandiser understands that changing lifestyles, growing middle-class family structure, living spaces, and rise in income levels are factors that have changed the consumer dynamics of a country which has also affected the strategy of the retailer.

Retail strategy:
Retail strategy is the vision of the retailer. It is according to this vision the company plans its function to achieve increased sales, build customer loyalty, build and implement the company’s goals. This strategy can be a price strategy, product strategy, placement strategy, or a promotional strategy.

Price strategy:
The retailer’s mission is price-driven the visual merchandiser displays products in a manner high lighting the price points so it becomes easier for the price-conscious customer to search for products of his taste at his price and make a sale. If the target consumer is the middle class, then the retailer may want to provide the consumers with quality goods but at an affordable price. The consumer goes home feeling that he got value for money. If the target consumer is elite class, then the retailer will provide goods that are of the higher price segment to please the consumer’s taste and requirements. Some consumers have a mindset that the higher the price betters the quality. The retailer has to take into consideration the competitor’s price for the same type of product before concluding the final price of his product.

Product Strategy:
The retailer’s mission is product-driven. The Visual merchandiser displays products dividing the space of the store into sections kids, women’s and men’s, etc. In each of the allotted space, the products are displayed to bring out the best features and make products accessible to the consumer and make a sale. Generally, the retailer’s stock 30:70, wherein 30% is their own brand and 70% is of the established brands. This 70% may be local or international brands that have already established their brand value. It becomes easy for the retailer to sell established brands and his own products also get sold along the way. Some retailers stock their own brand only. As they have better control over the clothing manufacturing factories, product quality, price, distribution, display, and promotion. The returns are higher and there is no interference in the retailers working. Since there are no intermediaries in between commissions are eliminated and the profit margins are higher. In this case, some benefits are passed on to the customer. The retailer provides a wide range of products that cater to all the segments of the population, keeping in mind their taste in the design element of the product and value perceived.

Placement Strategy:
In visual merchandising, the retailer strategy is placement driven. The visual merchandiser understands why the retailer has chosen to target, a particular section [e.g. kids] only or to provide products in all sections [ e.g. kids, women’s, men’s] or be a preferred supplier in the particular segment [e.g. women’s]. The visual merchandiser analyzes what the competitor’s brands that are already established in that category are offering. Studies in-depth competitors progress daily and keeping these benchmarks in mind creates an ambiance at the store that is updated as per international trends and better than the competitors, by providing the consumers and productive shopping experience and make a sale.

The retailer may employ a marketing agency to do this research on the classification of the population and decide who his target consumer is. Explained below is how a retailer will conclude its target consumer. Every retailer before starting his own brand does extensive research on the demographic trend of the population of the country where the brand is to be launched.

The objective is to conclude what segment of the population, gender, income group, etc. he wants to target and analyze the feasibility of the venture. As per the latest population census available classify them as.

  • The breakup of the population urban and rural wise – further bifurcation of the male and female population.
  • This research is essential to conclude which market to target. There is definitely a market in the urban sector but the rural sector is a fast-growing market. The retailer will complete his expansion plan by establishing stores in phases, phase I is ‘A’ cities, phase II is ‘B’ cities, phase III is ‘C’ cities, and so on.
  • The breakup of the population varies on the age and gender-wise- i.e. of kids, youth, middle age, old population further bifurcation male and female population-wise.
  • This research is essential to conclude what is the ratio of the population and how many and types of brands to establish to cover the target consumer.
  • The level of literacy-bifurcation state wise. The literacy rate is equated to employment.
  • This research is essential to know the total spending power of a particular area so that the products offered are instead of the spending power.
  • The level of literacy gender-wise bifurcation of the male and female population.
  • This research is essential to know the ratio of the spending power so that the retailer can conclude how many brands to establish gender-wise. The household income – bifurcation city wise, state wise.
  • This research is essential to know the spending income per home, how much is spent by each family on essential and luxury products.

For example:
After analyzing this data [of the target consumer] the retailer may conclude how many brands per segment he wants to launch. The retailer may conclude to establish 22 brands as given below:

The Kids Population:
To establish 3 brands, as the population of this segment is not high and the general mentality is to buy fewer clothes for children as they are ever-growing.

The Women Population:
To establish 9 brands, increased economic independence of women and the increase in literacy rate has led to increasing in their spending power. Women also like more to have a large spectrum to choose from.

Men population:
To establish 4 brands to cover the population.

Youth Population:
To establish 6 brands of youth brands as the youth population have the spending power and are willing to experiment with fashion. It large segment that will have economic potential.

These brands are further classified into casual, formal, ethnic, fusion, etc. The retailer will set up his store in an area accessible to his target customer. The visual merchandiser understands as per the brand allocation that the retailers preferred category is first is women’s, second youth, third men’s, and fourth kids. The visual merchandiser will highlight segments, allocate space, plan and execute merchandise display, and allocate this budget according to this preference.

Promotional Strategy:
The retailer strategy is also promotional driven. The visual merchandiser plans and executes all these promotional programs. The loyal customers represent 20% of the retailer’s base and contribute 50% of its total sales, this becomes a big segment for a retailer to continuously tap to generate sales. The promotional strategy is planned and executed by identifying the valued customer by a collection of data from various avenues and understanding their requirements in terms of product style, price, and quality, etc. To increase the consumer base and retain them, customer service and loyalty programs, advertising, in-store sales programs, and discounts are carried. Festive programmers and contribution to the social cause are also carried out.

The objective of Visual Merchandising:

It is through visual merchandising that an image is created as per the retailer’s strategy and the same image is replicated in all the stores by the visual merchandiser by using elements of layouts, ambiance, and atmosphere in such a way that the entire shopping experience is an enjoyable for the consumer and sales are executed. In short, the role of visual merchandising is placing the goods in the store in such a way that it is made accessible, attractive to the customer for procuring sale.

Store:
The store is the workplace of a visual merchandiser . A store is a place that reflects the strategy and image of the retailer. It is a culmination of all his efforts. It is here that the consumers see the products and decides to buy. From the customer feedback received from the store, products are designed, purchased, produced, and distributed. The sales team in the store act in the interest of the customer and accordance with the environmental and corporate social responsibility norms and objectives lay down by the retail company. The store complies with all the laws of the city/country it is located in.

Store design:
The visual merchandiser’s function is to plan the store design according to the image of the retailer. The objective of a good store design is to provide space for the consumer to move, the fixture should be flexible [movable] and cost should be controlled. The store design and image of ‘BARISTA’ are created to match their targeted consumer [15-60 yrs] whereas ‘COFFEE CAFÉ DAY’ store design and image match their target customer youth [14-29yrs].

The exterior of store design and Interior of store design:
The exterior elements of the store design draw the customer to the store. The exterior element is the combination of the location, parking, and ease of access, frontage, and display space, health, and safety provisions. The interior element of the store design is a function of the fixtures flooring, ceiling, lighting, and signage used to create a look. The layout is meant to aid the movement and the flow of customers.

Store layout:
The retailer and visual merchandiser conclude which layout best suits their purpose of effective utilization of space and achieve maximum productivity and exposing the customer to all the products in the store. Five layouts are available to choose from that are typically used in-store design. They are known as 1] The Grid Layout, 2] The Loop (Racetrack) Layout. 3] The Herringbone Layout, 4] The Spine layout and 5] The Free Flow Layout. Store operation:
The visual merchandiser’s success in retailing requires putting the right product, at the right place and at the right time to meet the customer’s requirements and increase sales and control costs. Store operations involve executing the front and back operation. Service provided like security and parking to aid the customers in the store.

Ambiance and Atmosphere:
The visual merchandisers use the elements of light, color, scent, sound, touch to create an exciting ambiance to satisfy the customer and to get them to repeat their visits thereby increasing sales and creating loyal customers.

Signage:
The visual merchandisers use the elements of signs and graphics to provide information and to add personality, beauty, and romance to a store’s image. The purpose of different signage used by the visual merchandiser is explained below:

  • Location signage – it is used to indicate the location of the product.
  • Category signage –it is used to highlight a product.
  • Promotional signage – it is used to promote special offers.
  • Point of sale signage – it is used to highlight interest the customers.
  • Lifestyle images signage – it creates moods by displaying pictures of people and places.
  • Print signage – developed at the corporate office and installed by employees.
  • Digital signage – the visual content is displayed on the monitors or flat-paneled screens delivered digitally through a centrally managed network.
  • End of cap –are displays used end of the aisle for higher-margin impulse buying.
  • Promotional aisle – are displays used for products being promoted i.e. seasonal merchandise or sales.
  • Walls –are used to displaying products.
  • Windows – they are displays used to pull the customers and convey a visual message of the type of merchandise.
  • Cash wraps/point of sale –they are places where impulse items like magazines, batteries, etc are displayed. It can be in each department or centralized checkout.

Fixtures:
1] Straight rack 2] Rounder 3] Gondola 4] Four-way racks Planogram:
A Planogram is a diagram that visually communicates the location of the merchandise and props that are fit into a store for proper visibility and price points. The visual merchandiser uses a planogram to use space effectively and economically as space equals cost. The visual merchandiser provides enough shelf space given to all products. The products are placed in a way that is accessible, signage and fixtures are used to locate the products easily. The visual merchandiser assures that there is enough stock of the product on display. The visual merchandiser collects data of the sales of each product, segment, and the cost and returns received per inch, thereby conclude the profitability and justifiability of space allocation. To be successful in the art of being a visual merchandiser it is essential to understand the retail strategy of the retailer, his reason for establishing the number of brands and thereby covering segments also why certain segments are prioritized. The use of various elements like a store, store design, and planogram to enhance the image of the retailer, create an atmosphere and ambiance with effective accessibility, space utilization, and flexibility that entice the consumer to come again and again to procure sales.

Speech from the writer:
If anyone reading this article very attentively then can easily answer the following questions in the interview:

  1. What is retailing?
  2. What is the definition of retailing?
  3. What is in visual merchandising?
  4. Describe the retail strategy in visual merchandising.
  5. Describe the price strategy in visual merchandising.
  6. Describe the product strategy in visual merchandising.
  7. Describe the placement strategy in visual merchandising.
  8. Describe the promotional strategy in visual merchandising.
  9. Describe the objective of visual merchandising.

Sangita Rawal
Consultant and Merchandising Manager
Mumbai, India
Email: [email protected]

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