With the retail industry constantly evolving, driven by technological advancements and changing consumer behaviors, businesses seek innovative strategies to stay ahead. Enter retail merchandising software, a game-changing tool designed to optimize product display, manage inventory efficiently, and enhance overall customer experience. In this blog post, we delve into the transformative potential of retail merchandising software, exploring its pivotal role in redefining merchandising strategies and driving revenue growth for retail businesses. So, if you’ve been wondering, “Can retail merchandising software help drive revenue?”. We’re here to tell you the answer is yes, absolutely.
What is retail merchandising?
Retail merchandising is the strategic art and science of presenting products in a retail store in a way that entices customers to make a purchase. It involves a range of strategies including product selection, display design, shelf stocking, and pricing, all orchestrated to maximize sales. From the strategic placement of products to updating displays, retail merchandising is all about understanding customer behavior and preferences and leveraging that knowledge to create an inviting and efficient shopping environment.
Some of the most common types of retail merchandise planning include:
Visual Merchandising: Involves the aesthetic presentation of products, using elements like lighting, color schemes, and layout to create visually appealing displays.
Planogram Merchandising: Involves the strategic placement of products on shelves and in-store layouts based on a detailed planogram to maximize sales and improve customer satisfaction.
Cross-Category Merchandising: Combines complementary products from different categories to encourage customers to make additional purchases.
Omnichannel Merchandising: Integrates merchandising strategies across various channels (in-store, ecommerce, etc.) to provide a comprehensive shopping experience.
Point-of-Sale (POS) Merchandising: Concentrates on displays and promotions at the checkout area or other high-traffic locations to encourage impulse purchases.
The link between merchandising planning and revenue
According to Investopedia, “Merchandising is critical for a retailer, as it can directly impact sales and customer retention. Whether a store has a physical presence, and/or an online presence, how the store presents itself and its products is crucial.”
Effective merchandising strategies draw customers into the store and guide their journey, directly impacting purchasing decisions. By thoughtfully arranging products, using appealing visual displays, and ensuring optimal product placement, retailers can create an environment that highlights the products’ best features. For instance, a well-merchandised store with clear signage and grouped product categories can make it easier for customers to find what they’re looking for, enhancing their satisfaction and likelihood of purchasing. Effective merchandising also maximizes exposure to high-margin items and promotions, increasing the chances of impulse buys and upsell opportunities.
Retail merchandising serves as a silent salesperson, subtly guiding and influencing customer behavior and preferences, driving sales, and creating a pleasant shopping experience. However, while traditional retail merchandising strategies have proven effective over time, they come with notable limitations. In addition to being time and resource-intensive, these strategies often incur higher labor and material costs due to their reliance on manual processes. Furthermore, they cannot typically offer personalized experiences to customers, a key component in today’s consumer market.
Enter retail merchandising software
Retail merchandising software is designed to streamline and enhance the process of retail execution and management. At its core, this type of software serves as a platform that simplifies and optimizes various aspects of store operations, making them more efficient and effective. Retail merchandising software solutions function by integrating various operational tasks, from inventory management to sales tracking, to transform retail management, making it more responsive and adaptable to changing market conditions.
Key features of some retail merchandising software include advanced inventory management. These systems ensure that stock levels are maintained optimally, striking the right balance between demand and supply. It effectively minimizes instances of overstocking, which can tie up capital unnecessarily, or stock shortages, which can lead to missed sales opportunities.
Sales tracking is another critical component, providing real-time data on sales performance, helping retailers make informed merchandising decisions. These systems allow for a comprehensive analysis of which products are selling well and which are not, enabling retailers to adjust their strategies accordingly.
The evolution of merchandising software reflects the broader trends in retail operations and store management. Initially, these software solutions were focused on basic operational functionalities. However, as the retail landscape has become more complex and competitive, software has evolved to become more comprehensive and configurable. This adaptability allows retailers to tailor the software to their specific needs, whether it’s for a small boutique or a large chain of stores.
The seamless integration of software solutions with modern retail practices has been instrumental in driving efficiency, improving customer experiences, and ultimately contributing to the overall success of retail businesses. In today’s retail environment, merchandising software is not just a tool but a critical component in the strategic toolkit of effective retail management.
Retail merchandising software to enhance revenue generation
At InContext, our focus on customer behavior analytics offers in-depth insights into consumer buying patterns and preferences, which are critical for brands and retailers looking to align their offerings with customer expectations. Understanding customer behavior helps in tailoring not just the product selection and placement, but also ensuring marketing strategies resonate with the right audiences.
Our incorporation of cutting-edge technologies like virtual reality (VR) and augmented reality (AR) took retail merchandising to new heights. By leveraging a virtual environment, retail merchandising helps more effectively showcase products, conduct market research, and even train staff more effectively.
When it comes to results, we believe the proof is in the data. And we’ve got plenty of it to back up our claims. Some of our groundbreaking retail merchandising tools include:
VR to Align & Validate Strategies
InContext’s ShopperMX virtual store platform enhances sales through research and strategic development confirmation. This platform stands at the forefront of our enterprise merchandising solutions, enabling retail teams to utilize a digital twin of any store environment. With an impressive 91% correlation to real-world shopper behavior, this retail merchandising tool allows for first-hand visualization and planning within a virtual setting, which maximizes ROI and drives revenue growth.
Aligning with deep insights often results in significant growth, like identifying that horizontal blocks in their shelf arrangement would lead to a potential 40 million dollars in revenue for one manufacturing company. By blending research gained within a virtual environment, we can identify growth opportunities and provide a roadmap for retailers to effectively capitalize on them, ensuring their strategies are market-responsive.
Predictive Shopper Behavior AI
The acquisition of fast, accurate shopper insights is pivotal for making better, more informed decisions. By leveraging InContext’s extensive customer data set of over 2 million virtual shopping trips, brands and retailers can start with a detailed view of how consumers will respond to their product or planogram, enabling highly accurate predictions about future shopping trends.
With the industry’s largest data set of virtual shopper behavior, our retail merchandising AI solution is exceptional at converting potential ideas into revenue drivers. It’s worth noting that virtual results are evident in the real world, such as a drug store experiencing a remarkable 31% increase in private label sales or a manufacturing company that saw store sell-in boost by 19% and compliance by 24% after testing them in virtual environments first.
AR for Retail Execution
Another InContext solution harnesses the power of augmented reality (AR) with ShopperMX GO. This technology overlays 3D AR images onto real-world store environments, using mobile devices to quickly and accurately visualize points of interruption. By presenting these enhancements clearly and interactively, retailers can readily understand and adopt proposed changes, leading to a faster and more confident “yes” in decision-making processes.
Not only that, but our AR app can measure the space and pull up displays that are sure to fit, eliminating returns and fitment issues. SMX GO helps validate planograms quickly, ensuring that every inch of store space is optimized for maximum sales potential. A compelling example of this technology’s impact is seen in a beverage manufacturer’s case. By utilizing SMX GO, they achieved an incremental revenue increase of $2,600 per additional display across 50 large format stores, culminating in a total impact of approximately $130,000. This significant revenue boost underscores the potential of AR technology in transforming retail spaces, making InContext’s SMX GO a vital tool in driving sales and increasing store revenue.
Cost savings focus
Working with InContext extends beyond just increasing revenue; it’s also about the substantial savings in costs and resources. By providing actionable plans before implementation, we help clients make informed decisions without expensive and time-consuming physical testing and resource allocation. This preemptive approach not only saves significant time but also conserves resources, ensuring that investments are made wisely and efficiently.
A notable example of this is seen with a manufacturer who saved over $100,000 on a product launch. This saving illustrates the dual benefit of our services – not only boosting revenue through enhanced sales strategies but also reducing expenses through smarter, data-driven planning and virtual testing.
Partner with InContext
In the dynamic retail realm, leveraging the advances of retail merchandising software can be a game-changer in driving revenue. Our platform, capable of marrying the latest trends with rich data analytics, offers a comprehensive solution to the challenges of traditional merchandising.
At InContext, we’re here to offer expert guidance and data-driven strategies tailored to the unique dynamics of your business. Our deep understanding of shopper behavior and commitment to delivering actionable insights positions us as a reliable partner in navigating the retail landscape. If you’re ready to embrace the future of retail with confidence, contact InContext today, where we transform insights into action and lasting success.
