What’s Your Merchandise Point of View?

Differentiate your brand and attract more business.
by : 

Andrea Hill

August 1, 2014
What’s Your Merchandise Point of View?

No one walking into Walmart would mistake it for Target. You may be looking for a brand of paper towel or hair color found in either store, but you know which store you’re in the second the sliding doors open. You may think this is the result of layout and lighting (and to a point, it is), but mostly it’s due to their unique Merchandise Point of View.

If you were blindfolded and led deep between the clothing racks of a Younkers department store, you may not know immediately where you are once you take off the blindfold, but you would definitely know you aren’t in Neiman Marcus. Similarly, while both Radio Shack and Best Buy sell computer cables, their merchandise points of view are decidedly different.

Behind every successful retailer is a clearly defined merchandise point of view. Struggling retailers may struggle for many reasons, but nearly all of them share one trait: the failure to define their merchandise point of view.

What is a merchandise point of view?

Your merchandise point of view is your declaration of identity to consumers. It is what your store is all about. It screams, “Come in if you like these things and move along if you prefer the things at another shop because that’s just not what we’re into here.” A merchandise point of view both includes and excludes, because to be successful, you don’t need every customer—you just need the right customer.

A retail store’s merchandise point of view often starts with what the owner of the store loves and values, but it’s only sustainable if the owner quickly determines which customers those things matter to and whether there are enough of those customers or not.

Strong retailers define their best customers. They know what their customers wear, how they spend their time, how they spend their money, how they align themselves within society, and what matters to them. Strong retailers know how to keep their customers engaged, and they do this with many elements, including excellent sales staff, desirable environment, promotion, and marketing. But, the most powerful way to keep customers engaged is to keep bringing them new and interesting products that appeal to them. The best way to accomplish this is through a crystal-clear merchandise point of view.

How do you develop a merchandise point of view?

Imagine approaching a magnificent home in the country along a manicured, winding drive. The exterior of the house suggests Tudor influences, from the construction to the landscaping. However, when you enter the foyer you are shocked by the scene before your eyes: green shag carpeting, Danish Modern hallway tables, and dime-store lamps. You turn toward the formal living room and are met by an ultra-modern room decorated entirely in blacks, whites, and grays with cool, tile flooring. At this point you may be laughing but also completely disappointed in the lack of vision demonstrated by the homeowner. This is precisely what happens to consumers when a store’s sales approach, service messages, promotional elements, and merchandise selection are out of sync with one another.

It starts with your strategy

Every element of your marketing strategy—from your sales plans to your brand to your marketing programs to your merchandise point of view—must flow from your overall business strategy. When your marketing elements are fully integrated, you benefit from augmented consumer awareness and attachment. Why? Because consistency matters when it comes to making a lasting impression and building trust.

The primary role of your business strategy is to define your differentiation and competitive advantage. If you do not have a strategic plan that articulates your differentiation and competitive advantage, a simplified approach is to ask yourself the following questions:

  • What are our core business values?
  • What about this business matters so much to me/us? Why are we excited by it?
  • Why should this business matter to others? Why should they be excited by it?
  • What makes us different?

Once you have developed answers to these questions you can create your talking points—your elevator speech, main marketing messages, and primary merchandising thought processes.

One exercise I lead retail clients through, which you can easily do yourself, is to create a word cloud of concepts related to your core values and exciting differences. With this strategy in mind and our answers to the questions above in front of us, we brainstorm a list of 25-30 words that all express and embody the brand. Next, we rank or rate the words to indicate relative importance. A terrific, free tool you can use to turn your words into an image can be found at Wordle.net.

Words are powerful, and with this simple tool at your finger-tips, you can bounce every idea you have for your store—from store design and layout to merchandise selection and presentation—against your words to make sure every choice you make for your retail store is harmonious and resonant.

Next, ask yourself:

  • Which customers do we want? Specifically, given the answers to the previous set of questions, who are the consumers most likely to be attracted to my business? To whom will my products and services be meaningful? The answers to these questions will enable you to create a profile of your targeted customers.
  • Which types of products matter to our targeted customers?
  • How do I want my customers to feel when they walk into my store?
  • Which adjectives do I want customers to associate with my store?
  • What is the unique story or experience of our store, and how do we express it through words, colors, lighting, communications, customer relationships, design features, and so on?

Let’s play this out using our original examples of Walmart and Target:

Which customers do we want?
Walmart: Extremely budget-conscious consumers who will give us the lion’s share of their spending after housing and utilities.
Target: Value-minded consumers who want to pay competitive prices for necessities but are willing to pay a small premium for discretionary products.

Which types of products matter to our targeted customers?
Walmart: Basics in every category. Products that enable them to stretch their budget.
Target: A few steps up from basics in every category. Things they could live without, but why live without them if you can afford them?

Which adjectives do I want customers to associate with my store?
Walmart: Inexpensive. Affordable. Thrifty. Best value. Full-service.
Target: Retail therapy. Hip. Smart.

How do I want my customers to feel when they walk in my store?
Walmart: As if they are getting absolutely the most for their money. As if they can afford the things they need to buy today.
Target: As if they are about to have some fun shopping. As if they will find some interesting or exciting surprises they weren’t thinking about purchasing and they can afford.

What is the unique story or experience of my store, and how do we express it through colors, lighting, communications, customer relationships, design features, etc.
Walmart: The Walmart story is that they will do everything they can to provide the lowest prices for customers. The stores are open and clean, but don’t invest in unnecessary touches that would cost unnecessary dollars. Everything in the store shouts “efficiency” and “economy.”
Target: The Target story is to make the shopping experience for the basics more interesting and fun while also providing excellent value. Their stores feature bright colors and interesting displays to catch attention. Everything in the store shouts “cheap chic.”

Who are the customers most likely to be attracted to my business? To whom will my products and services be most meaningful?
Walmart: Low to low-middle income consumers. Consumers who are extremely frugal.
Target: Consumers who also frequent higher-end department stores but realize they can stretch their dollar further without sacrificing experience.

When both Walmart and Target stick to their core values and customer focus, they do very well. Every notable failure, from Walmart attempting to offer fashion clothing to Target’s launch in Canada (a billion-dollar, supply-chain fiasco), can be traced back to failure to conform to their own values and defined customer experience.

Failure to define is worse than failure to be consistent

What happens when a retailer fails to do the work of articulating its core values and differentiation and relating those values to a particular type of customer and customer experience? Staying with our examples of Walmart and Target, the alternative is K-Mart. Neither here nor there, consumers could never clearly attach to a reason to shop at K-Mart, other than to take advantage of an advertised price promotion. Without a defined customer base, K-Mart has always struggled to generate customer loyalty. They are the lifestyle store that’s not the coolest, and the budget store that’s not the cheapest.

Putting your plan into action

Once you ask and answer the questions about your differentiation and competitive advantage, you are ready to do a store audit. For each item on the following checklist, ask and answer the question, “Does this harmonize with and advance my store’s unique story?”

  • Entrance
  • Layout
  • Atmospherics (lighting, scents, design elements, music, cleanliness)
  • Color palette
  • Displays
  • Sales information (posters, shelf talkers, brochures, Duratrans, etc.)
  • Sales and support staff (everything from attire to personality to presentation and training)
  • Purchasing experience (speed and simplicity of actual point of sale)

Next, do this audit on every category and item of merchandise you offer. If your merchandise point of view has been poorly or too broadly defined in the past, you likely have an eclectic lineup of products that are under-performing. You probably also have a core group of products that turns consistently. At the beginning of this process, you will focus on strengthening that core group of products and cutting your losses on the under-performers. From this point forward, compare every product opportunity to your merchandise point of view. Ask and answer, “Does this product harmonize with and advance my store’s unique story?”

One of the biggest challenges every retailer faces is deciding which product risks to take and which to walk away from. The default position is to view ourselves as the targeted customer and make choices based solely on personal tastes. If you’ve been retailing for two or more years and you’re still in business, your product instincts are probably pretty good, but it takes more than pretty good to produce the profits that allow you to sleep peacefully at night year after year. Your merchandise point of view will guide you to take the risks that are most likely to delight and surprise your customers and cement their loyalty to you. You’ll still make mistakes, but they will be fewer and you will understand and correct them faster.

This marriage of merchandise, experience, and physical (or graphical) space is the merchandise point of view, and like all marriages, it requires constant nurturing and attention to blossom and be sustained. To ensure you stay on track, create a one-page summary of your questions and answers. Distribute it to your employees and discuss with them how you intend to reinforce your merchandise point of view in everything you do. Make your merchandise point-of-view summary part of every meeting. Conduct weekly merchandise point of view walk-throughs to find and correct inconsistencies. Reward your staff for identifying and correcting any aspect of your store that does not harmonize with and advance your store’s unique story. This constant engagement with your store’s defining elements will enable you to stay true to your core while ensuring you evolve in a consistent and compelling manner.

So, what’s your merchandise point of view? If you can’t answer this question, it’s time to get cracking!

Andrea Hill is a management and strategy expert and CEO at Hill Management Group specializing in preparing companies for growth. She is the author of The How-to-Hire Handbook for Small Business Owners.