The Practical Manager
Merchandising—it is one of the keys to success at retail. Sure, you have to have a good location, a great staff, competitive prices, the right product mix and effective marketing to succeed. But you also have to have a good merchandising strategy. Your customers have to be able to find what they want to buy. You also need to take advantage of impulse buys. These are areas where merchandising comes into play. My goal in this column is not to focus on special-buy merchandise, where people are buying items that are new, seasonal or at a discount—or all three. Though those items are quite deserving of attention and thought, a store should explore how to effectively use a combination of end caps, signage and floor displays to maximize potential everyday sales.
I am also not going to focus on grocery merchandising. Putting breakfast cereal with breakfast cereal and soups with other soups is a logical and proven method of merchandising. What I want to focus on is merchandising your supplements section.
The supplements section is one of the dwindling areas where natural food stores still hold a distinct competitive advantage. Many conventional grocery stores have and are doing quite well with natural and organic food items. A number are making strong progress in the body care arena as well. But very few have made the supplements section a destination area in their stores.
Supplements sales are very attractive—most items have a higher retail price than grocery items, along with a significantly higher profit margin. However, the investment in them is higher, the turns are lower and the risk is greater. Supplements also require more staff involvement—you need more people on the floor that are trained in supplements sales. In sum, you make more from the sale of supplements, and it costs you more, but this actually gives you an advantage over conventional stores that can't be bothered. To protect and even build upon this advantage, merchandising your supplements wisely is essential.
There are two main schools of thought in merchandising supplements. The first is to group them by item: putting like products, such as vitamin C, together. The second is to put all items from the same brand next to each other.
A variation is to have special sections of products that seem different, but would be purchased together. Common sections could include Immune Health, Women's and Men's Health and Brain Function. This is a great idea, but be sure you merchandise these sections with signs and keep your staff aware of where they are and what they contain.
While many stores are very successful merchandising supplements by item, I am a big proponent of merchandising them by brand because:
- A "brand-blocked" section looks good. When a group of products has the same bottle and label style, it is very appealing—and that makes an impact on your customer.
- We have many "stealth brands"—core brands in our industry whose manufacturers refuse to sell their supplements in channels other than natural foods stores. They rely on you to introduce these brands to your customers. In turn, the manufacturers provide you with sales tools—staff training, discount programs, co-op funds and more. Blocking these brands can help your customers find the manufacturers that are loyal to you.
- You don't want to help purchases "go low." A concern with merchandising by item is that all items are seen as "equal," so the lowest-priced supplement is the one that is purchased. This doesn't help your customers get the best potency for their needs or money. It also doesn't help you grow sales.
No matter what strategy you use for merchandising your supplements, remember to keep them neat and in order. Be consistent in your approach and continually look for new ways to keep your customers aware of great products.
Bill Crawford, director of retail custom programs at New Hope Natural Media, spent 12 years on the management team of a major natural products chain. Contact him at [email protected].
Natural Foods Merchandiser volume XXVII/number 12/p. 20