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Good merchandising - basic tips for success

Numark

Merchandising

Further advice
More specific advice on merchandising will appear in the next issue of Retail Round-up.

Good merchandising often comes down to “common sense and good housekeeping”, according to Numark’s retail services manager Steve Voyse. But how do pharmacists, often confined largely to the dispensary, know the best way to lay out their merchandise?

Product placement

“The main thing is to have the right products in the right places,” Mr Voyse says. He advises “creating some theatre” in-store.

A common mistake is trying to cram too much stock into one area, says Mr Voyse. This can lead to products slipping behind other products or facing the customer side-on which can make it hard for the customer to find what they are looking for. Brand leaders can warrant two or three of the same product displayed in a row, he adds.

“Gondola ends are great hotspots and should be used to their full potential, with strong products double- or triple-faced. They are often full of rubbish with pharmacists losing out on impulse buys,” he explains.

At Numark, members are offered data on top selling lines, collected by electronic point of sale (EPoS) systems. The better performing products in each category are identified, and information is provided about which products are moving up or down the “best sellers” list, allowing for new or discontinued products, current advertising campaigns and seasonality.

Space allocation

Numark’s merchandising service works out space allocation according to core ranges, provides planograms and can use an individual store’s EPoS to provide a bespoke service. This data may surprise pharmacists.

“Fifteen years ago hair care and baby care products were the biggest sellers in pharmacy,” explains Mr Voyse. “These sectors have been lost to the grocers. But many people are still over-allocating these products and under-allocating P and GSL products in their merchandising.”

He adds that pharmacists could learn a lot from a trip to their local supermarket or other large multiple, seeing how gondola ends are designated to promotions, for example.

Tricks of the trade

A good shop front

Raj Nutan, pharmacy business manager at the National Pharmacy Association says: “In a typical pharmacy, 20 per cent of turnover comes from front of shop sales. A good front shop encourages new customers and can extend prescription business.”

Mr Nutan also advises pharmacists to look into their shops from the outside to see what potential customers can see from the street. Any visible shelving is a prime target for offers such as “buy one get one free”, as long as these attractions are changed regularly. Such tactics, using gondola ends, are often used by large multiples to entice customers into a store, he says.

Pharmacists who do not have much time for merchandising may consider delegating this task to the more senior pharmacy staff.

Merchandising forms one of the elements in the NPA’s “Essential Retail Skills” course for counter assistants.

Raj Nutan, pharmacy business manager at the National Pharmacy Association, agrees that independents can learn merchandising tricks from the larger operators.

Cross-merchandising A sales technique often used by the multiples is “cross merchandising” to encourage impulse buys — for example, displaying analgesics alongside feminine care, in addition to having them in the counter medicines section.

For pharmacies in particular, “flagging” on shelves can be useful, to show that larger pack sizes of analgesics or restricted products are available behind the counter, for example.

Seasonality Certain products can also be promoted depending on the time of year, such as nicotine replacement therapy at New Year, or this month as the smoking ban comes into effect.

Other ideas include “back to school” promotions at the end of the summer or weight loss products after Christmas.

Knowing your customer According to Mr Nutan the key to good merchandising is simply understanding what your customers want. “There is no point in devoting six modules to baby care if your main customers are young professionals,” he says.

“The launch of the patient survey (Pharmaceutical Journal 2007;278:338) could be an ideal opportunity to find out whether customers like the products you stock,” Mr Nutan suggests.

Health care must form a key part of the stock since consumers are likely to come to the pharmacy for first aid, vitamins, minerals and supplements, family planning items and foot care. Toiletries and makeup sales should be driven by demographics and margins, he adds.

Analyse your sales According to Mr Nutan, EPoS in any pharmacy allows profitability per shelf to be worked out. Larger operators calculate their productivity per square meter. While Mr Nutan appreciates that community pharmacies often keep “favourite” products for their regular customers, he does not see the need to use shelf space for these if they are not profitable.

Citation: Retail Round-up URI: 10006860

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