October/November, 2003

From the Editor

Effective Deli Merchandising

This issue features the annual DELI BUSINESS Masters of Merchandising compendium. It is a grand assortment of priceless information given by companies that are working hard to earn retailers’ business by not merely shipping product but also by helping retailers increase sales of that product.

Despite the efforts of these “Masters,” there are still many, on both the buy and sell side, who neglect to study merchandising. The mistake many manufacturers and more than a few retailers are making is that, because we live in the age of self-service supermarkets, they believe the product must be able to “sell itself.” Yet the product itself offers little to explain how it is best presented and positioned to consumers.

The late, great Max Brunk, a professor in the Agricultural Economics Department at Cornell University, taught us that there was too much art and not enough science in merchandising. He urged continuous study of what really works and did a series of studies of effective merchandising, focusing heavily on meat and produce. The lessons he taught, though, are highly likely to apply to the deli as well:

1) In a self-service case, sales of food items do not occur randomly. Shoppers tend to purchase what other shoppers are buying. In other words, 30 shoppers may pass by the self-service cheese case without anyone purchasing the mozzarella and dried tomato salad. Then one consumer picks it up, and you may see five sell in a row, then another lull. There are many possible explanations of this, including consumer insecurity as to the quality or value of the product and consumers’ lack of trust in their own ability to ascertain what is tasty or fresh. Perhaps they reason that someone else knows something they don’t.

The effective merchandising response would be to try to reassure consumers as to product quality. As simple a merchandising tool as opening a package and offering free samples can often be enough to jump-start this dynamic.

2) In test after test, it has been found that you can reduce the time period between the set up of a display and the first purchase by removing a few items from an otherwise full display. Yes, those carefully laid out rows of pre-sliced cheeses and meats that fill the shelves are all reducing sales.

Professor Brunk tried this on items from Maxwell House coffee to Kleenex tissues, plus loads of meat and produce items. It always works. The dynamic at work is not so much consumer hesitation to disturb a pretty display as a preference for purchasing what other are buying – call it the herd instinct and use it to your advantage.

3) Make sure your rotation policy is consistent with consumer behavior. Everyone learns as a novice in the perishables arena to rotate by putting the new stock in back and the old inventory in front. But consumers are not all so dumb. In other departments, roughly a third of consumers pick from the back. Professor Brunk liked to tell the story of a successful florist who would put all his old stock back in the cooler and all his new inventory up front in the store because he found that most of his customers headed straight for the cooler as they were certain that is where the freshest flowers were stored.

4) Products get a boost in sales when workers are seen unpacking cartons and when shipping cartons are open in front of the display. As simple a strategy as leaving an open shipping carton near a display – thus, implying it had just been unpacked – can boost sales. It is important to note that this whole effect is related to consumer expectations and not to actual product quality.

Professor Brunk found that you could take chicken out of the meat and poultry case, bring it into the back room, put it in a shipping carton, take it out to the exact same place in the case where you started, and sales will perk up as the chicken is put back on display. This phenomenon brings attention to questions like whether building big displays, which may be the most efficient use of labor, actually is less efficient in its ratio of sales to labor than having smaller displays that require more frequent restocking.

5) Eye level is overrated for displays. Consumers commonly cast their eyes around waist level and, quite conveniently, that is where their hands are ready to pick up products.

6) Offering more varieties of an item, such as bulk and packaged, or different types of potato salad, can serve to increase the sales of the primary seller. One of the risks of simple-minded interpretations of category management is that it leads retailers to simply stop selling low-volume items. But the best way to increase sales of Red Delicious apples is to merchandise it with other varieties. The best way to increase sales of bagged apples is to also offer a bulk display.

All the stores that don’t offer service deli salads may want to restudy the question. Perhaps a full-service option attracts a different consumer to the store, but that consumer may still buy pre-packaged. Car manufacturers find a great way to increase sales of min-vans is to have sexy red sports cars for sale.  DB