How to maintain merchandising standards and a perfect store thanks to AI [VIDEO]

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Store display and the merchandising standards that define it are one of the basic means of influencing customers in the store. A consumer entering a supermarket with a shopping list usually has one goal – to leave as quickly as possible with 100% of the products checked off. Missing even one item means one thing – frustration. Purchasing a less desirable substitute or having to go to another store does not create a positive shopping experience. This is a simple way of decreasing loyalty to a brand or store. Fortunately, we have a good recipe for bringing the store shelf closer to perfection.

1. Since self-service stores began to dominate the market, the availability of goods for consumers has become a key value in retail.
2. Over the decades, the trade has developed a number of methods, the common denominator of which is helping customers find, select and purchase goods that will meet their needs.
3. These methods, called merchandising, are constantly evolving and improving. We are currently in the implementation phase of artificial intelligence, which supports product display management, among other things, by quickly obtaining precise information on the implementation of merchandising standards.
4. Typically, verification of compliance with the perfect store standard is based on manual tests, subjectivity and declarative nature of reports.
5. AI process support accelerates and makes research more credible, providing a solid basis for conscious sales management.

The first merchandising standards were human

Those were the days! When the customer entered the store, the salesman, bowing from the waist, asked from the doorway, “What can I get you, dear lady?!” The customer presented a shopping list, and the seller completed the order, packed it, counted it, recommended new products, negotiated discounts and ordered missing products.

Towards self-service

This state of affairs persisted for many dozens, or actually hundreds of years. However, in the 1930s, the evolution towards consumer self-service began – the first self-service stores began to appear. In the 1950s, the expansion of supermarkets intensified in the USA and Europe. Counters were increasingly replaced by cash registers, and shelves with goods that customers reached for on their own were becoming more and more common (you can read about it in this article). Stores as we know them today are the result of optimizing customer service costs and striving to maximize the use of retail space.

The consumer has become lonely

The weakening of the seller’s advisory and customer service relationship has continued to worsen in recent years. On the one hand, we are increasingly using the e-commerce channel when purchasing subsequent product categories, on the other hand, stationary stores are consistently reducing staff, leaving consumers to play the role of cashiers at self-service checkouts.

Left alone in the store, the consumer is doomed to make purchasing decisions on his own, based on his preferences, habits and likes. Therefore, a highly educated customer who knows what he needs and how much he is willing to pay for it is confronted with the store display. The store shelf becomes a forum for non-verbal communication between brands and consumers. It becomes an impersonal marketplace, a discourse without feedback that is reluctant to give second chances.

Merchandising standards – advisor to a lonley customer

All of the above and many other reasons have prompted the retail industry to invest in the appearance of stores. We are particularly interested in the area of working with display. The goal here is, on the one hand, to meet the needs of customers and, on the other hand, to ensure optimal profit for all parties to the trade exchange. The principles of positioning goods, product groups, categories, brands, promotions, prices, and special displays, taking into account the industry and topography of stores are called merchandising. It is a series of rules aimed at reconciling the interests of sellers, producers, and consumers. Sets of specific merchandising rules are called merchandising standards. This includes, for example, arranging goods in good-looking, visible blocks, positioning well-rotating products at eye level, placing them close to the competition, adding packaging variants, displaying promotional prices, etc.

Suffice it to say that the set of optimal standards for a particular retail outlet is called a perfect store in the industry. This is a parameter most often expressed in one indicator, which results from the calculation of indirect indicators (e.g. shelf share plus appropriate product availability (oSA – on Shelf Availability) plus correct facing for individual SKUs).

So much theory. The everyday experiences of merchandisers (people responsible for maintaining store display standards) and sales representatives show us the naked truth about shelf standards. In practice, the standards of an ideal store are often extremely difficult to maintain (because the goods do not arrive, because the shelf turns out to be too short, because the person responsible for the shelf does not always read the instructions to the end, because the labels with new prices were not printed on time, and so on ). On the other hand, we still have challenges related to reliable verification of compliance with standards. The human factor can often fail here, despite goodwill, and shelf research reports are full of data that have only a loose connection with reality.

Merchandising standards in the age of AI

Fortunately, we live in the 21st century, an era in which artificial intelligence has moved beyond the retail aisles and is starting to find its place in other areas of everyday life in stores. AI turns out to be the missing link in the process of verifying perfect store merchandising standards. The use of neural networks for learning and image recognition ensures a quick, automatic and precise audit of the store shelf, which can be performed by any employee, not necessarily an experienced salesperson.

Using photos of shelves with products taken in the store, sales representatives, merchandisers, sellers, auditors, and their superiors can instantly see the condition of the display and get an answer to the question of how many of the stores in operation meet merchandising and perfect store standards.

The examination itself does not have to end the activity in the store. On the contrary, it can trigger a number of tasks – from improving the appearance of the shelf to ordering missing products. Regional managers will be able to conduct reliable and regular shelf inspections using artificial intelligence to determine what actions to take to reduce irregularities and combat supply gaps. It will advise sales managers at what level to set targets for field employees.

A sphere once reserved for science fiction has now become the domain of commerce. By implementing automatic display audits, all parties to trade exchange will win, i.e. properly stocked stores where satisfied consumers will buy brands of well-displayed producers.

If you are interested in how artificial intelligence can help your business reach the perfect level, contact us. We will help you evaluate implementation options and recommend the best solution.

Read also:

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