To the marketing concept of the 4Ps “Product, Price, Place, Promotion”, Merchandising added another one in the 50s.
Thus Charles Kepner stated that successful merchandising integrated the 5Bs: “The right product, in the right place, at the right time, at the right price, in the right quantity”.
Changes in markets and consumer behaviour then broadened its scope. Merchandising is designed to increase sales of products or brands and enhance the attractiveness of points of sale. Merchandising now generally encompasses product and brand assortment optimization, space allocation by product and brand, point-of-sale and traffic design, product promotion and point-of-sale communication.
Successfully planning the implementation of products at the point of sale is a key factor in increasing turnover for manufacturers and retailers in the FMCG sector.
Merchandising is an essential element of the sales performance of the brands.
For the retailer, it is a question of making the most of the sales space by optimizing its margin,
For the manufacturer, it is a question of being selected by the retailer from among the products in its range and selling as many products as possible.
It implies a good knowledge of the characteristics and peculiarities of the point of sale.
While the manufacturer brings its knowledge of the market and the various distribution channels, the retailer has knowledge of its local market, its customers and its network of sales outlets.
They often have to work together, with the same objective: the consumer.
In a synthetic way, the implementation of the products is carried out according to two approaches:
Permanent merchandising focused on the organization of space in the store,
Seasonal merchandising, focused on the implementation of temporary sales operations (Christmas, Easter, Summer, Back to School, Halloween…) and their adaptation to different points of sale, regions…
The product of the sub-family, the family, the department… is valued at its best.
It is therefore not only a question of putting it in the right place, but also of mixing products of varying profitability, with the aim of constantly improving the productivity of each square metre, or shelf space of the point of sale.
In mass retailing, merchandising results are generally assessed by looking at sales per m² or per linear metre.