When choosing a merchandising company, the price can seem like the most important factor. Everyone is concerned about the bottom line, and saving on merchandising costs can be a tempting solution. There are many other factors to consider when hiring a merchandising company, and you might be surprised at the hidden costs associated with hiring a budget firm.
One of the most obvious factors to look at is whether or not the merchandising company covers the geographic area where your stores are located. You’ll want to ask what other stores in the area they are currently working with currently and in the past. If they are not currently operating in all of your areas, how do they plan to cover the holes? Will they hire all new people, or can they relocate an experienced team or team lead? Even if the merchandising company is operating in your area, they might still need to hire all new staff to cover your stores if they are already booked with other companies in the area. It is important to know whether or not they plan on staffing your locations with new people, or experienced people. Experienced merchandisers will get jobs done faster with fewer mistakes, which saves you profit down the line.
Merchandising Team Size
Another important factor in choosing a merchandising company is team size. Large teams can merchandise many categories at once, and do so relatively quickly. There are potential downsides to large teams as well. Unless the teams are coming overnight to merchandise your stores, having 30 or more people working on the shelves in many different sections can be off-putting to your customers. More people mean more clutter and less shopping convenience for your customers, so it is important to weigh the time of day these large teams can work against how much time it takes them to complete the resets. Also, while four people can certainly complete a particular section’s reset faster than one person, they won’t necessarily do it as accurately. When one person looks at the whole set from top to bottom, they are more likely to catch mistakes If the planogram has a certain item in two different places, for instance, one person would see and catch that mistake. However, several people who are splitting up one planogram might not be able to make the connection.
Smaller teams can be ideal for targeting specific areas in the store without making customers feel uncomfortable. One or two merchandisers per section reset can keep the aisles neat and clear. Smaller teams are also more likely to preserve your planogram integrity because each team member is taking ownership of the whole planogram instead of splitting it up into small pieces. While small teams have a lot of advantages, they only work if they are experienced. Small teams of inexperienced people can be like having the “blind leading the blind.” In many cases, one or two experienced merchandisers can finish a set in the same time it takes four inexperienced merchandisers, but one inexperienced merchandiser on their own will be slow and not completely accurate.
Fast and open communication is essential to managing a category reset across all of your stores. How fast can you expect the merchandising company to report broken or missing retail fixtures, spacing issues, and completed stores? If existing fixtures are damaged, or new branded fixtures did not arrive at the store, you’ll want to know how quickly these issues can be reported. You’ll also want to know what the expected turnaround time will be for the teams to go back to the store to complete the installation once the new fixtures have arrived. In addition, the merchandising company should have a plan to communicate any schedule adjustments to you, and directly to the store in question. Other things to think about would be if you will have one consistent contact at the organization, or if you will need to interact with multiple people. Having one, dedicated contact is preferable so you don’t have to worry about an initiative getting lost in the pipeline.
Communication on the store level is equally important. The merchandising company will need to have a comprehensive policy about how it communicates in the stores. This communication can be as simple as knowing how to label out of date product (or not on file, or out of stocks) and where to put it so it can be handled properly by the stores. Each team should walk with the relevant manager after the sets are complete so the manager can check the work and see that everything has been put in its place. At this time, the merchandising team should communicate any damaged or missing fixtures, and have a plan to follow up and let the store know when they will be back to install replacement fixtures.
Scope of Service
Every merchandising company strives to set your store to planogram, but there are a few other things they should be doing to make sure each set reaches maximum profitability. One of the most important things your merchandisers can do is properly rotate dates on dated product. Product rotation is obviously important on food and grocery items, but may be even more valuable on slower-moving, higher priced items, as in the Health and Beauty sections. Properly rotating dates on these types of products can potentially save hundreds of dollars in each section in each store, depending on the price point and inventory level. Because of potential profit loss, date rotation should be a must-have service from any merchandising company you hire.
Cleaning is another important service that your merchandising company should provide. If they are moving product around and taking it off the shelf to rotate the dates, there should be no impediment to cleaning the shelving and fixtures underneath. Cleaning and dusting not only makes your store look more inviting, it improves the life of your retail fixtures as well. Dust and dirt can clog up moving parts on pushers, and some liquid product spills can eat through the coating on metal shelving if left for too long.
While 3rd party merchandisers are not technically part of your store team, customers probably won’t make the distinction. As such, your merchandising company should act as an extension of your company. A company that will walk your customer to the product they need, or find someone on your staff who can assist is ideal. Your customer can get consistent service no matter who they ask for help.
Will your merchandisers be marking down product that is no longer in the set? For many stores, this is a matter of preference, but having the merchandising company handle markdowns can free up store employees for working with customers. Make sure the company you choose has a clear set of policies on how to mark down product properly, and whether or not it is okay for merchandisers to purchase the product they have marked down.
On the corporate level, help with logistics can help free up your time. Does the merchandising company have someone who can work with you to make sure supplies and new retail fixtures get to the store in time for the team’s arrival? Some companies will even have a representative go to your warehouse to sort, package, and send the needed supplies. This frees up your warehouse staff to go about their regular work. The merchandising representative has a vested interest in getting everything to the right store promptly, so it’s one less thing for you to worry about.
From these few examples, you can see that hiring the least expensive company may not be saving you any money in the long run. A good merchandising company can increase profit in your stores even between category resets. Experienced small or large teams that properly rotate product, clean the sections, mark down out-of-set product, and help with logistics can save you money in all aspects of the reset. Take these services into consideration when deciding whether or not a merchandising company is right for your stores.
What other factors do you look for in a merchandising company? Have you worked with a merchandising company you really love? Tell us in the comments!