Innovations in merchandising

Retail VR, merchandising, innovations in merchandising, virtual reality, augmented reality
Antoine Charneau - 23/06/2022

Context

A quick look at the basics of merchandising

Before we look at the various innovations, we will look at the basics of merchandising basics.

According to the Institut Français du Merchandising (now the Institut du Commerce) merchandising is "a set of studies and application techniques, implemented separately or jointly by distributors and producers, in order to d'increase the profitability of the point of sale and the sale of products, by constantly adapting the range to the needs of the market and by the appropriate presentation of goods".

The main objective is to maximise sales or margins, by driving the consumer to purchase from the sales channel. Merchandising optimisation is based on quantitative analyses of sales and financial results (turnover, margins, panel data, etc.). It is also based on highlighting the offer and on taking into account the behaviour of visitors in the point of sale (route, consumption habits, speed of traffic, behaviour and visual capacities, etc.).

macro merchandising

Macro and micro merchandising

The macro merchandising is the optimisation of the customer journey. This process corresponds to the layout of categories and the installation of shelving in the shop. To do this, it is a question of setting up the universes around the main customer traffic routes (entrance and central aisle). The universes bring together several categories which include complementary and substitute products. The macro merchandising also takes into account other parameters such as aisle width, footfall and gondola height.

 

The micro merchandising is the optimisation of the shelves. This process consists of putting the right product, the right range and the right assortment in front of the customers on the shelves. It is about changing the arrangement of the different products on the shelves according to the needs of the customers and the characteristics of the markets.

These two aspects planned in parallel allow a retailer to know how to organise his shop in an optimal way and generate maximum turnover or margin. They also serve to provide the ideal assortment of products on the shelf. This can be linked to visual merchandising. It consists of optimising the presentation of products, the satisfaction of customers or visitors and staff. And of course, to promote sales.

micro merchandising

E-merchandising

It is simply an extension of physical merchandising adapted to the web. In the same way, e-merchandising seeks to optimise the conversion rate and develop the average basket. To do this, it is a question of taking the rules we have seen and adapting them to the codes of the web. However, it will have to deal with new problems:

  • Optimise natural referencing on search engines: through the development of keywords from its site or by paying.
  • Optimise the speed of your site: the slower it is, the more visitors you will lose. On this subject, 40% of customers abandon a website that takes more than 3 seconds to load.
  • Imagining a consumer journey and highlighting certain products using behavioural marketing and cookies.
  • Develop benchmarking tools.
  • Couple and adapt the e-commerce site to a mobile application: according to Techjury, around 75% of consumers will buy on mobile in 2021.

Developing a new channel means acquiring and retaining new customers. By 2021, online retail sales have reached 4.9 trillion according to Statista. In France, the sector will total 129.1 billion euros in 2021, an increase of 15% compared to the previous year. The Statista report of 2021 shows that 48.5 million French people will buy on the internet in 2021. Furthermore, the average shopping basket amounted to about €60.

The sales strategy has now evolved for many brands through the shift from multichannel to omnichannel. We are entering the era of total commerceWe are entering the era of total commerce, where the focus is on selling by all available means, on all possible channels.

 

e-merchandising

Innovations in merchandising

Augmented reality for merchandising merchandising

The first of the innovations in merchandising is augmented reality. Now widespread, it allows the integration of virtual elements in 3D (in real time) within a real environment. This technology continues to change the game in more and more different sectors: sales, health, local authority support, marketing. According to Bigcommerce 38% of B2B buyers are looking for augmented reality solutions. And rightly so, as this technology could improve operational efficiency.

On the consumer side, 82% of visitors to a product page activate the 3D view and the conversion rate of products including 3D is 40% higher than those that do not use it according to Cappasity. As a result of an augmented reality campaigncampaign, Asus saw 10 times the engagement of its usual campaigns.

At present, augmented reality can remove some of the obstacles in retail and allow :

  • To be more aware of: the space that an operation or animation can take up at the point of sale.
  • Mastering the sales pitch: especially technical aspects such as prices, margins or volumes.
  • Engage the customer more quickly: reassure by adding an extra step in the buying process.
Equipped with a smartphone, sales representatives with the Instore Activation will be able to project a realistic visualisation of proposed concepts and and fittings directly into the point of sale of both B2C and B2B customers.

 

Retail VR, augmented reality
Planogram layout test using the Instore Activation application

Virtual reality for merchandising

The second innovation in merchandising is virtual reality. To understand consumer choice effectively, it is necessary to set up shopper or consumer research. Traditionally, these studies are expensive and time-consuming. Moreover, they are limited from a geographical point of view and can only reach a limited number of targets.

The health crisis has been a major factor in theadoption and dissemination of virtual reality. It has proven to be particularly effective and is now used in many fields. many fields.

In the field of shopper research3D offers many advantages, and is a real breakthrough innovation that allows :

  • Reduce considerably the time needed to set up a study (and therefore its cost). 
  • Reach a wider target more quickly.
  • Conducting several studies at the same time.
  • Cover a larger geographical area (national/international).

Consumers are looking for new experiences. According to Esteban Kolsky, "72% of customers will share a positive experience with six or more people."


Virtual reality can also be used to analyse the shopping experience in the shop or to test new layouts. Thanks to the digital twin of a 3D shop, Retail Staging makes it easier to define your layout strategy.

Retail VR, virtual shop, merchandising, virtual reality
Virtual Store

The VR showroom at the service of merchandising

The third innovation in merchandising is the virtual showroom. A virtual showroom in 360° makes it possible to offer a physical experience in digital.

The use of a digital twin allows for a complete rethinking of the customer's journey in the shop, in order to offer a different and immersive experience. It is a further step in improving the layout of the store and merchandising in general. Indeed, you can create a immersive shopping experience within a virtual showroom. You can guide the customer to the products they like, direct them to additional purchases, and still give them a great deal of freedom to act, responding to their need for autonomy. This experience can also serve as a link with physical shops. Two figures to remember: 60% of those who have already bought via a virtual shop want to do so again; 70% of consumers who have visited a virtual shop have transformed their purchases.

virtual shop
La Nouvelle Cave virtual shop (click on the image to access)

How will merchandising innovations evolve?

The advent of Web 3.0, and more particularly the metaverse (a persistent virtual space accessible through an avatar), foreshadows the revolution that is shaking up retail. And for good reason, 60% of young and future consumers think that brands should the metaverse to sell. Merchandising, and more generally the retail sector, must now take into account these new opportunities and the consumer behaviours associated with them: NFT, cryptocurrency, D2A.

9 success factors for merchandising

In 1963, Charles Kepner outlined a set of five rules for optimising merchandising in his book Modern Supermarket Operations :

  • The right product
  • The right price
  • The right place
  • The right time
  • The right amount

Nowadays, these processes can be taken even further. In our view, the arrival of new means, as we have seen earlier in the article, offers further rules for maximising merchandising:

  • The right information: an XXL product sheet, with photos, videos, QR codes.
  • The right presentation: a fully customisable and modular 3D world.
  • The right atmosphere: conveying the brand's image to customers.
  • The right availability: selling online and connected to your Shopify inventory.

Innovations in the shopping experience go beyond Charles Kepner's postulates and start a revolution in merchandising, and more generally in retail.

Don't miss out, the virtual commerce (v-commerce) is the future of commerce!