The hardware sector is one of the most innovative in the building and construction industry with new features, improvements and innovations reaching the market each week. Despite this, many merchants still use outdated techniques when displaying their products in store. John Mackin, general manager of TIMco in Ireland, takes a closer look at the latest innovations and what merchants can do to maximise their merchandising.
Customers entering a builders merchant or hardware store are often confronted with a sensory overload of differing products, smells and auditory announcements, as well as a barrage of visual media from signage to packaging and display advertisements. So what can be done to ensure customers are not overloaded and can easily find the products they are after?
Typical shopping trip
In a typical 20-minute shopping trip, research suggests that customers only read between eight and 10 written messages and that in the majority of cases, products are purchased by recognised colours, packaging or imagery.
The research also suggests that customers are inefficient in the way they move around the store, and on average spend only 20-30% of their time actually acquiring their desired products. The remaining time is spent either looking at or browsing other items and this is when they are most susceptible to display media influences. These influences can lead to impulse shopping, which in turn accounts for around 40% of sales.
The challenge for retailers is how best to display the hundreds of individual products. One method that is still widely used is the product ‘pick n mix’ bin system. A broad range of products from low value nuts, bolts and washers through to more expensive or specialist anchors are simply placed in the bins for customers to literally pick and mix those that they need.
Although the system may be beneficial to product sales reps who can simply top up the bins if they’re looking a little low, it’s proving to be an increasingly unworkable option for merchants due to issues with stock management, product migration or leakage, to name a few. Once products have been tipped into the bins they lose their traceability, making it nearly impossible to investigate any quality control or product coding issues. This can compromise merchants if they are required to provide the relevant Declaration of Performance Certificates or more product detail regarding a product’s specification.
Stock control issues
The bin system’s main criticism is that it offers poor stock control as buying loose items does not allow for barcodes and the benefits that such systems offer in automating stock controls. Additionally, bins hold high levels of stock, which in turn ties up cashflow and restricts the opportunity to invest in new products or other high turnover items.
There are also issues with product migration, where discarded products are returned to the wrong bin, causing issues for other buyers. Let’s not forget that products purchased ‘loose’ need packaging to transport them and also safe and secure storage when not being used. Research suggests that popular and clearly displayed items can even be used to help draw customers into new or less popular areas of the shop, a useful tactic when considering that on average only 25% of the store is ‘shopped’ by a customer.
Just as the products offered have innovated, now is the time for merchants to look at new ways to manage stock as well as sell and merchandise products. The first action, however, has to be to make the bold move and start by binning the bins.
MAKE IT EASY FOR YOUR CUSTOMER… AND SALES WILL GROW
Current studies show that unplanned purchases make up between 46% and 70% of total purchases; visual displays and merchandising play a key role in this as they facilitate the customer’s shopping experience. Put simply, when customers can shop easily sales are impacted positively; if a store is cluttered and messy, sales will significantly drop. By providing a pleasant shopping experience customers will show loyalty and repeat shopping will occur.
When customers can shop easily sales are impacted positively; if a store is cluttered and messy, sales will significantly drop.
Merchandising incorporates a lot more than attractive displays; it is the effective use of products, display fixtures, space, colour, lighting and signage to encourage customers to buy. It has the potential to not only increase sales, but also increase shop floor productivity by improving organisation and allowing more customers to ‘self-serve’.
Visual displays can be described as a ‘silent salesperson’, which when used effectively will propagate sales through visual appeal. Seasonal merchandising is a major factor in the hardware industry when it comes to targeting DIY customers.
Bins hold high levels of stock, which in turn ties up cashflow and restricts the opportunity to invest in new products or other high turnover items.