Re-Merchandising

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When to Re-Merchandise

Re-merchandising is not a process that allows flopping about in the marketplace to see what you can get. It is a deliberate, planned and carefully researched approach to changing your product position to obtain market share in a defined and identified market niche or sub-niche. For example, let’s say you sell tools for amateur woodworking and you want to move into industrial tools for professional woodworking. The whole point-of-view, applications, pricing, service, product lines, durability, shipping and installation concerns, and a thousand other elements are different. In fact, the only commonality is that these are woodworking tools. Yes...this is a new business.

But, let’s say that, at Christmas, the spouses of woodworkers are looking to purchase gifts. Now, the point-of-view changes for a season and it may prove fruitful to re-merchandise the products for gift-givers for just that season. This might include bundles, expansions to existing products, suggestive selling, consultive selling, price incentives, or any number of other re-merchandised product approaches. The merchandising could also be combined with circulation tactics and targeted specifically to spouses...or...directly to the woodworker with a special merchandising appeal to, “Circle what you really want this year, leave this catalog where your spouse will find it, and we’ll do the rest!”

The Moment of Merchandising Truth

The Master Merchandisers are able to Roto-Rooter their way through the blockages. They can create a merchandising approach for as many niche markets as the product will support, and all from a different merchandising or positioning point-of-view. The slavish handcuffing to one merchandising point-of-view for all-time and all-buyers simply assures that only a fraction of the total market ever purchases the product. The Master Merchandiser is a chameleon, able to blend with a hundred micro-markets for any given product or line of products. You may understand your product, but when you understand your product through the mind of dozens of different buyers—that is the moment you begin to achieve mastery of merchandising; that is the moment of truth in merchandising execution.

One of my primary tests of a merchandising candidate is to show the person a product and give them all the information necessary and then to ask them to create for me at least five thumbnail merchandising approaches for that product for five separate markets—in an hour. I am looking for imaginative people who can think on their feet and innovate quickly and skillfully and who are not bound by rigid preconceptions and imaginary merchandising rules.

The Hierarchy of Re-Merchandising

The greatest opportunity-laden potential for re-merchandising is to create new applications for new potential buyers. If you are selling olive oil, remember, it can be used to easily and cheaply remove the residue of adhesive labels. Arm & Hammer have found hundreds and hundreds of applications for soda bicarbonate and have expanded the market for their flagship product exponentially.

The next exciting potential after applications in the existing market is to re-merchandise to reach new markets, or my “concentric tree-ring” approach. If you are doing products to hog farmers, think about products to chicken farmers.

The third potential for re-merchandising is to create a merchandising presence based on a position other than the one you are known for. If you are the selection leader, add the service leader. If you have the fastest fulfillment, add the slowest. If you are full service, create a limited service alternative. All of these re-merchandising, re-positioning approaches may have different price points or shipping and handling costs.

The fourth potential is often the trickiest: price. If you are the price leader (most expensive), create a mirror of the business that is the low price, strip-down market player. This re-merchandising approach usually attempts to getting a piece of the market at all prices. The resulting ‘brands’ often have different, totally unrelated names, locations, and creative, sometimes different channel emphases. For example, the high price catalog may feature similar products in a low-price, web only channel strategy.

Of course, one of the most ambitious re-merchandising approaches is international expansion. What works in the U.S. may or may not work in Portugal, depending on the product, the application, the position, the price, the service demands and the market nuances. Often, very different merchandising creative work must be accomplished. The U.S. style of copywriting is not a universal standard, nor are the layout and design elements.

Summary

Re-merchandising is a constant evolution and must be ongoing to assure validity of product relevance and positioning. Merchandising demands an expanded point-of-view, not the mono-vision of the product originator, which all too often results in the straight-jacket of “more of the same.”

Re-merchandising—as well as initial merchandising—begins with a solid, intentional understanding of positioning. What do you want to be to the market and the customer, and what is it that the market and the customer want you to be? Any other beginning point must be seen as arrogance leading to The Merchant’s Fallacy.

All re-merchandising is deliberate and based on knowledge and analytics. Floundering in search of a direction is best left to the invertebrates.

Copyright © 2006 by Donald R. Libey. All rights reserved. May not be reproduced by any means without permission of the author. Contact Libey LLC; www.libey.com or call 877-903-9448.

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