The Importance of Merchandising

FMCG products became regular goods that we consume every day,

from food to healthcare, hygiene etc And most people have their preferred
brands which they stick to for a period of time or maybe a lifetime, until they
decide to change, or something changes their mind and they switch to
another brand. The primary place where consumers meet these products is
the supermarket. Some people think of Supermarkets as a place where
products are shelfed and people visit to choose what they want, buy and
leave. Well as simple as it sounds, supermarkets are much more complicated
than that.
Since my internship took place at Columbus (Khalil Fattal & Sons), a
company that holds several SBUs (Strategic Business Units), the main focus
of my internship was planning and promoting sales by presenting a product
in the right place, at the right time, to the right shopper. In other words, my
main focus was merchandising. An article on ISPO news, an online business
magazine, mentions that 90 Percent Of All Purchasing Decisions Are Made
Subconsciously, and if theres something I learned through my internship,
its that merchandising is what triggers our subconscious. Good
merchandising goes from organized and skilled advertising, to the visual part
of merchandising that consists of using attractive displays and colors to
1

many other studies and reports that guide us in leaving the best impact on
consumers. As obvious as it sounds, merchandisers are the people
responsible for merchandising. However, throughout my internship I learned
that merchandising is the responsibility of every single person directly
working in the business, whether it was a salesperson, a manager, a
representative Mr. Naji Ibrahim, the Key Accounts manager at Fattal,
pointed out to us in a meeting that even though his job does not relate to
merchandising in any way, every time he sees products distributed by Fattal
that are not well presented on shelves, he feels the urge to fix them and
make them look nice.
Merchandisers at Fattal go through regular training that improve their
understanding about their job, and luckily we as interns, had the chance to
attend a few trainings on merchandising. First thing merchandisers focus on
are the in-store fundamentals, or What to look for when entering a store?
To start with, merchandisers should make sure that their brands are located
in the right category. In the category, they try to place their brands as close
as possible to the market leader in order to get maximum exposure. In
addition to the right placement, merchandisers seek chances to cross
merchandise complementary products together in order to create impulse
and increase sales.

To each band its share of shelf in the supermarket, thus merchandisers

focus on maintaining this share of shelf. Its usually based on market share
and share of sales, in other cases there could be a contract between the
distributor and the supermarket for a certain number of facings for the
product, merchandisers should make sure in their visits that their share of
shelf is maintained. When share of shelf is maintained, key positions should
not be wasted on non-leading products. The best place is usually left to the
most consumer appealing product. For example, Dettol has 2 kinds of
antiseptic, one for house use called Dettol Brown, and another for personal
care called Dettol Green. Dettol Brown is the most selling product of Dettol,
thus in its share of shelf, it is placed in the most strategic place, usually at
eye level. However Dettol Green is usually placed on a different level where
it is still visible but not so emphasized. It is also important to note that this
strategy is important because other competitor products try hard to appeal
to consumers in order to have them switch from a different product to their
own. This is why keeping our brand as appealing as possible helps maintain
our market share.
To make sure the share of shelf as appealing as possible, merchandiser
are required to implement a planogram where it is possible. Usually to each
brand its specific planogram, and planograms differ from one kind of
supermarket to another, so merchandisers try to fix their SKUs according to
the plans they have. However not all planograms fit, so here comes the role
of the merchandiser to make his own customized planogram that fits best.
3

Planograms are updated almost every year by the producing company to

include new products and SKUs, still in some cases merchandisers may have
to fix a shelf when planograms are not available, so they have to rationalize
the placement of SKUs per proportion of sales. In this case product of the
same brand are preferred to be placed vertically, since SKUs placed at eye
level are the most visible, placing products vertically gives the consumer a
chance to see all available SKUs of the same brand.
The representations of shelves reflect the image of the company, this
is why it is very important to keep our shelves tide and neat, or else
consumer will be hesitant to buy the product. A good looking shelf will
always be appealing to a consumer, even if they did not buy your product. In
addition, merchandisers should maintain the products general positioning,
usually this is the decision of the supermarkets management, yet
merchandisers should try their best not to change their products position
because users of that product may shift to another if they did not find it in its
place.
To every product its competitor, and the market is the best place to
know about competitor activities. Hence, merchandisers are responsible to
keep track of their competition and report their activities to the business
unit. Different kinds of competitive activities that should be reported are:
Change in share of shelf, Change in planogram, Change in price, New point
of sale, New launched product (or extension of range), New promotions and
New Point of Sale Material. Reporting these activities helps the business unit
4

know how the competition is thinking and avoid losing market share. Thus,
competitor reports are expected to be submitted monthly to the brand
manager or trade marketing manager for analysis and market studies. I had
the chance to conduct and deliver a competitor report in one of my market
visits. On that day, I had to visit a few key supermarkets in order to take note
of New Products or Promotions by competitor brands. I also had to register
the country of origin of each SKU, its volume, price, and description. In
addition to that, I had to take note of competitor prices and enter them into
an excel sheet that had all the prices of SKUs that are important to the
business unit in every month for the past year. This excel sheet is
represented by graphs that show the price change of each SKU with time,
usually monthly or quarterly.
Since Point of Sale Material was mentioned, it is important to point out
that POSM is a very important additive to your shelf to attract consumers.
POSM can range from Shelf Talkers to Posters, to Roll-up banners to Hangers.
POSM has proven to create impulse and to increase sales, since 33% of sales
are made on impulse, it is important to have POSM on different points in the
supermarket. Impulse sales are made with zero intention to purchase, the
process is pretty simple, its enough for the consumer to see the product, like
it, reach it and buy it. At Reckit Benckiser, one of the most selling product
with the highest revenue is the hand sanitizer by Dettol. About 90% of hand
sanitizer sales are made on impulse, by hanging hand sanitizer belts next to
snacks, diapers, feminine hygiene products and tissues. Throughout my
5

market visits, I used to notice that the shelf where hand sanitizers are
positioned has a few SKU sold, whereas impulse belts around the
supermarket were almost empty. Even though Dettols hand sanitizers are
the priciest among that category, they are the most selling brand in this
section thanks to impulse merchandising. Another POSM strategy that is
applied by Reckit Benckiser to their products on shelves is the neck-tags.
Neck-tags are small printed cardboards that are hanged on soap bottles
necks delivering a certain message or information to the reader, which in this
case is the supermarket customer. Dettol has recently added to its brand
claim that it now kills 100% of the bacteria (after it was only 99.99%), and
they emphasize on the fact that Dettol kills H1N1 virus, which was spreading
again in Lebanon in the late 2015. This information was printed on yellow
flashy neck-tags, and the marketing team asked merchandisers to hang the
neck-tags on every single soap bottle in the market by Dettol. This POSM
really made Dettols SKUs to stand out on the shelves and speak to the
consumers, it also delivered an important fact about Dettol being able to kill
a certain virus that was threatening our lives.
Merchandisers also take care of stocks in supermarkets, they keep
track of the availability of their products in the supermarkets warehouse in
order to minimize Out Of Stock situations. In that case, merchandisers
communicate with the sales team to take action in minimizing Out Of Stock
situations because lost sales are considered lost sales forever. Once
consumers dont find the product by the brand theyre used to, very few will
6

go and look for it elsewhere, most of them will switch to another brand, and
if they switched they may never go back to the initial product. Hence, it is
very important to ensure the availability of all SKUs in all of the stores all of
the time to benefit from a 100% of sales opportunity.
Some merchandising tactics can also be applied in order to improve
sales, these tactics are not as essential as the fundamentals tackled
previously, though they are effective and merchandisers may want to
consider them to excel in their job. And since merchandisers cannot freely
adjust their products position without the consent of the supermarket, these
tactics depend on how well the supermarket coordinates with merchandisers.
One of these tactics is Product Facings, the more facings you have of the
same SKU, the higher the sales index, of course having more facings requires
more share of shelf which isnt available all of the time. Another tactic would
be the bay where the product is placed. A supermarket aisle is divided into 3
bays: beginning, middle and end. All bays are obviously visible, but the
middle bay is proven to be the most effective since it is the first bay to be
spotted by the moving consumer. Also, the selection of bays depends on how
the supermarket divided its aisles. What the merchandiser can do is ask the
management if modifications are possible or keep track if any changes have
happened to the bays.
In some supermarkets (and most hypermarkets) you can find specific
locations called Multiple Touch Points where non-primary stands are placed
such as pyramids, dump bins, etc With Reckit Benckiser, selected
7

Hypermarkets are chosen, and are given the name Perfect Store. These
perfect stores have periodical pyramids in their MTP, which are constructed
by merchandisers, and usually contain promotions and offers. There are 5
kinds of displays, ranging from P1 to P5. Each Pn has a planogram and a list
of SKUs that should be displayed on it, for example P1 should have every
Dettol Original displayed, from antiseptic to soap, to triggers. P3 for instance
contains SKUs from AirWick, Vanish and PiffPaff. Merchandisers are the ones
responsible for fixing these displays and making sure they are always filled,
since having goods in MTP is not for free, the space is rented for a certain
number of weeks. It is very important to have goods in MTPs to make sure
the consumer is exposed to the products promoted and to not miss a chance
of him grabbing the product and putting it in his basket.
Expiry tracking is another important task of merchandisers that
business units really rely on. It is important for different reasons: first, some
products are better used before their expiry date to maintain the same
quality and effectiveness, so getting rid of expired products prevents
problems with consumers who may not be satisfied with the product they
bought. Another reason is to avoid problems with the ministry of health,
which conducts periodical checkups. Also, expiry tracking helps calculating
the life of the product on the shelf. If theres a big number of expired SKUs
this means the product is not selling much or maybe the supermarket has an
extra stock of that specific SKU. When filling out shelves, products with the
nearest expiry date should be placed upfront in order to be sold first,
8

merchandisers should make sure this is always the case to avoid having
expired SKUs. Moreover, a report should be filled out that shows all products
with less than 3 months oh shelf life remaining. Salespeople also review
which products have expired and are near expiry so they minimize the sale
of that SKU in the next transaction. They also relate it to Out Of Stock
situations, so they can increase what went out of stock and decrease what
hasnt been moving off the shelf. Furthermore, Visibility Scorecards are
reports that show the percentage of display of the business units brand as
well as the percentages of display of the competitions brands in every store.
These scorecards help follow up in who is leading the market and if the brand
is constant in its visibility or if it is changing. Nonetheless, Marketing
Intelligence Reports (or MIR) are also required from the merchandisers. MIR
includes information and data about promotions, initiatives, POSM,
activations and above the line campaigns as well as the competitor report
itself. All these reports that are provided by the merchandisers to the
marketing team are crucial for studying the market. They form a huge chunk
of the data that the marketing team works with. In other words,
merchandisers in the field are the main source of data and information for
the marketing team to do their studies and analysis, otherwise marketing
strategies cannot be established.

A merchandisers work is essential for a business to keep running and

growing. As simple as this job sounds, it is one of the most important and
meticulous tasks in a company. Merchandisers are the guardians of products
in the market, they follow up with the SKUs to make sure that someday
someone will look at that product, grab it and buy it. Merchandising should
be taken very seriously in the business, business units need to recognize that
it is important and crucial for every brand, and accept that is necessary for
the expansion and continuity of the business.

10

References

Emblin, Ruth W. "90 Percent Of All Purchasing Decisions Are Made

Subconsciously." ISPO News. ISPO, n.d. Web. 20 Aug. 2016.
Ibrahim, Naji. Key Accounts Operations Manager, "Merchandising For
Success". Presentation. 20 July 2016.
Semaan, Nisrine. Merchandiser at Reckit Benckiser, Columbus, Fattal,
Personal Communication, 06 Aug. 2016
Reckit Benckiser. (2015). 2014-2015 Reckit Benckiser Merchandising
Catalogue. Retrieved from Columbus Offices, Fattal, Jisr El Wati,
Lebanon.

11