What’s New in Retail Merchandising Strategies

What’s New in Retail Merchandising Strategies

September 14, 2022
Phil Lempert
Business SkillsRetail Industry Insights

By RDBA CEO Phil Lempert

The pandemic has changed retail forever and included in these changes are merchandising strategies. Today’s shopper wants to spend less time in the store, has less choices on the shelves, and is faced with a continuing rise in prices. A marketer’s dream . . .NOT!

So how are retailers and brands effectively merchandising their products and services within this environment? It’s time to throw out the old merchandising playbook and reimagine what merchandising is in 2022. It all starts with the shopper and getting to know them -- how, when and where they want to shop, how they want to absorb information, what are their influences, and how you can surprise and delight them on every shopping trip.

Retailers and brands are testing new merchandising tools driven by AI, the Metaverse, TikTok, and Twitch. The dilemma is finding which of these new merchandising tools is can empower your shoppers with the health and wellness messages that are the most important. According to SafebettingSites.com, brands will spend 19% more money per internet user on mobile social media in 2022; an average of $36.37 per person globally, and here in the U.S., $226 per customer! The total spend is even more staggering. Companies are predicted to spend over $226 billion on social media ads alone in 2022.

As we are introduced to these new ideas and tools, the merchandising possibilities can be overwhelming. Some may feel in order to do our jobs well, we must try EVERYTHING. Don’t! The new merchandising IS the Wild West, and just like those generations before us who headed West, we don’t know what’s coming around the bend. Focus on the one or two merchandising techniques that best matches the profile of the shoppers you want to reach. Remember that there is no one technique that will reach all shoppers – those disappeared in the 1960s.

Here's just a couple thought starters to get you thinking about what can be done with great merchandising:

  • Instacart has tapped Lizzo for their new brand campaign "The world is your cart.” It's an interesting merchandising move, designed to attract generation Z. But beware the pitfalls. Generation Z’s top spending priority, according to Piper-Sandler, is food, taking 23% of their wallet, their greatest share of spending a month. Forty-nine percent consume, or are willing to try plant-based meat, and they prefer healthy eating, more organic, and more natural foods that are free of additives.  Piper-Sandler’s survey also found that the average teen spends about 12 hours a week on social media. It’s smart of Instacart to try to use Lizzo to build a relationship with this audience, making Instacart hip for millennials and Gen Z. As Celia Van Wickel, the senior director of digital commerce at Cantar points out, Instacart has 22.5 thousand followers and Lizzo 25.2 million on TikTok. But here’s the disconnect and the pitfall. On Lizzo’s My Cart, designed to have her followers just click on Instacart and purchase the same shopping list, you’ll find Ben and Jerry's ice cream, Takkis, Smuckers Uncrustables, Oreos Skittles, Impossible Foods (to connect with her Vegan diet), lemons, limes, bananas, purified water, Perrier, and Coca-Cola. Good idea, but bad execution where it really matters – in the shopping cart as her cart doesn’t align with Gen Z’s food interests.
  • Grocery loans are making headlines. It started during the 1929 Great Depression when grocers would keep a notebook and write down what customers bought but couldn’t pay for just then. The practice continued in poorer neighborhoods where shopkeepers would do the same and their customers would settle at the end of the month when they were paid or received public assistance checks. Fast forward to 2022 and there's a supermarket in England called Iceland Foods bringing the practice to the headlines and the masses. To help their shoppers cope with high food prices, they're offering short term loans that come to about $30 - $120 U.S. dollars per transaction; people pay them back once a week. It’s merchandising that tells the shopper the chain cares about them and “we are in this together.” I’m not suggesting your chain starts this type of program, but what can you do as a retail dietitian with your programs to help shoppers stave off inflation and make you ‘the good guy’? Maybe a free consult? Or diabetes test?
  • Walmart+ has been struggling. In June, Numerator released the results of the Walmart+ promotion, and what they found was a wakeup call for the retailer. It was the first members only sale to compete with Amazon Prime Days and while they found that the deals on Walmart+ were better than those on Amazon, only 33% of Walmart+ shoppers even were aware of the sale. Compare this to 94% of Amazon shoppers aware of the their event and you can see why Walmart is on a mission to quickly provide more and more benefits to their Walmart+ members. They’ve introduced Walmart Rewards where members earn points, a free six-month Spotify and Paramount+ streaming subscription, early access to special promotions, events, and deals. Each week they are adding benefits. This is smart merchandising. The chain knows it is far behind the number of Amazon Prime Members (which now tops 200 million) as compared to just 11 million Walmart+ members. Watch how Walmart adds more and more benefits between now and the holiday shopping season to lure those Amazon shoppers to click on Walmart+.
  • Aldi teases and remains one of the best retail merchandisers as they promote their “Holiday Find,” reminding you along the way that they could run out of supply before you even get to the store. Aldi has such a social media subculture of shoppers; the Aldi Aisle of Shame Facebook group is really popular. On Facebook they have 2.8 million followers, and they merchandise, excite, and create envy very well.

The purpose of merchandising is to sell, no question, but if you can create a buzz and get your target consumer talking and thinking about you and your products the sale is just around that bend!