CHICAGO, Oct. 9, 2008 – As consumers continue to tighten their belts, consumer packaged goods (CPG) manufacturers and retailers have re-invigorated merchandising activity in hopes of boosting sales volume. Yet, too often, merchandising strategies rely heavily—and sometimes entirely—on price reductions. According to the latest IRI study, “Times & Trends: Merchandising Trends 2008,” industry leaders must consider new, innovative approaches involving updated positioning and product mixes and solution-based merchandising that generate enhanced shopper loyalty while concurrently reducing the reliance on lowering prices.
New merchandising approaches are especially important as consumers reduce the number of store trips, which in turn is decreasing the opportunities manufacturers and retailers have to reach them. Innovators realize that the store is more than a step in the distribution chain from manufacturer to shopper. It is a stage upon which manufacturers and retailers can define products, tell stories and create unique experiences.
“Simply lowering prices doesn’t fit with a product’s complete value proposition,” says IRI Innovation and Consulting President Thom Blischok. “In fact, just one percent of product categories that utilized price reductions as the sole merchandising tactic earned a sales lift of 100 percent or more. Contrast this with 86 percent of product categories that enjoyed a sales lift of 100 percent or more with a feature and display combined strategy—a merchandising tactic that allows the manufacturer and retailer to define that product, tell a story and create an experience.”
The IRI study recommends the following merchandising tactics for retailers and manufacturers:
- Explore opportunities to reduce reliance on price reductions by focusing on an affordable product mix and positioning and solution merchandising
- Adopt broader, more innovative merchandising programs; aggressively test pre-launch and track consumer response to enable mid-program modifications or builds
- Develop region and store-specific, highly targeted merchandising strategies to maximize relevance and response for high-priority categories and segments
- Drive private label trial/adoption with merchandising strategies that feature products and solutions which are highly relevant to the stores’ key consumer segments
“As merchandising is re-born, the key to success is balance: too little merchandising is opportunity lost, while too much leads to clutter and a high probability that shoppers will completely tune out the noise,” adds Blischok. “Total merchandising levels may be less than in days gone by, but moving forward, it is the quality of merchandising and targeting, not quantity, that will define the most effective players.”
About the Report
The Times & Trends report, “Times & Trends: Merchandising Trends 2008,” is available from IRI, the leading global leading provider of consumer, shopper, and retail market intelligence and insights for the consumer packaged goods (CPG), retail and healthcare industries. This thought-provoking study integrates findings from multiple sources, including IRI Shopper Insights™, IRI In-Store Solution Suite™, IRI Controlled Testing™.
To download the Times & Trends study, visit: http://usa.infores.com/Insights/Publications/TimesTrends/tabid/106/Default.aspx.
About Information Resources, Inc.
IRI is the world’s leading provider of consumer, shopper, and retail market intelligence and insights supporting 95 percent of the FORTUNE Global 500 consumer packaged goods (CPG), retail and healthcare companies. Only IRI offers the unique combination of integrated market information, automated and predictive analytics, innovative enabling technologies, and domain expertise. With IRI, leading retailers and manufacturers are able to quickly discover breakthrough insights driving smarter decisions and actions across the enterprise for breakthrough results. Companies around the world depend on IRI for improved productivity, stronger brands, and dramatic revenue growth. For more information, visit http://us.infores.com.
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