These aren’t your daddy’s vending techniques.

By STAFF at VendingMarketWatch.com

Everything in merchandising is deliberate, from the flow of the store to the placement of dry goods on a shelf; and it is an essential element to success of the product sale. In fact, for decades the retail industry has been studying and developing merchandising techniques to attract and ultimately encourage customers to purchase more products.

“Very few micro market operators have really spent an intense amount of time focusing on their merchandising techniques in their micro markets,” said Chris Stave, vice president of Unified Strategies Group (USG), a U.S. purchasing cooperative servicing independently owned vending, office coffee, micro market and food service companies. “But what they need to understand is that there can be a substantial amount of lift in micro market sales simply by merchandising effectively.

In order to do that, operators need to think like retailers when installing micro markets, as well as utilize their technology to monitor consumer behavior and reset their markets to eliminate slow-moving product and revitalize the consumer experience.

Think like a retailer

The first way to get more from micro market merchandising is to think like a retailer. Just like in retail, placement of items in a micro market is extremely important, and being able to place prime items in areas where the consumer is going to go first is ideal.

Last May USG began a first-of-its-kind project—a roadmap, so to speak—to answer these questions on the best merchandising practices in micro markets. The company, with the expertise of nine industry manufacturers, is analyzing data from 3,500 micro markets, to scientifically determine which piece of equipment should come first, second and third in a micro market, where the kiosk should be placed and the differences between vertical and horizontal category placement. “In a micro market, like retail, you want to know what the destination products are and what the impulse products are,” said Stave. “A destination product you maybe want to put at the beginning of the market and impulse products near the checkout.” USG’s comprehensive report is due out later this year.

Others in the industry have been using retail as a jumping off point to merchandise in micro markets, too, like Kevin Searcy, operator and president of deORO Markets in Odessa, TX. “It is easy for an operator to put a market against a wall like a bank of vending machines, but that’s what we’re trying to avoid,” he said. “We encourage operators to design their space in an L or U shape to enclose the customer into the market and bring the customers into a shopping experience.”

Use what’s there

To merchandise a market, operators should first determine the consumers’ shopping patterns. An operation can do this by using tools it has, such as video surveillance which can give insight into how customers travel in the micro market space.

Searcy began developing theft management software that would monitor and track customer behavior in a market. “But then we realized that it wouldn’t be a viable option for theft monitoring because of different variables, and so we thought, ‘What else can we use this for?’” His team quickly realized that the software was a great tool to see what was going on in the market.

Stave admits that few operators have attempted to use the surveillance video for a marketing purpose, but recommends it as a viable option to determine customer behavior in a market. Video mining revealed to Stave that the consumer is spending a vast amount of time in front of the food coolers. While customers are brand loyal in beverages and spend only seconds in front of the beverage cooler, their time in front of the food cooler is much more drawn out.

An operator can also use video to see where a customer isn’t going, which may be more valuable. “Perhaps there isn’t a cooler getting used in a market, and an operator might not know why,” said Searcy. “It would be very easy to watch foot traffic to see where customers are traveling.” This might even allow an operator to cut back on equipment or even redesign the space.

Reset the micro market

A micro market reset—cleaning out the space and redesigning product layout—can help a location look fresh and positively impact the consumer shopping experience. “We found that resets oftentimes freed up one or two shelves without taking away items,” said Stave. “There actually was the potential to add five or 10 more items.”

What happens over time is that items get misplaced or an item that doesn’t sell well has too many facings. Although the market may be pulling in good numbers, he says, there is product that isn’t moving, and that has to go. “There is a lot of low hanging fruit, so to speak,” said Stave. “An operator might not know that they could be turning another product more quickly. Really it comes down to using your data to place the right products in the right place within the market.”

Operators should continuously look at consumer trends and be sure to offer the right mix of products such as healthy and gluten-free, as well as indulgent, to add to the micro market space.

As for the future of micro market merchandising, both Searcy and Stave agree that it’s an area that needs more research. It may also give operators the opportunity to partner with manufacturers to place their items in prime locations. Operators will need to move beyond the micro market land grab and focus on ways to get the most out of the markets they operate, and effective merchandising can help do that.