<B>The Retail Mix</B>

Belén Sandoval. Professor. Instituto de Empresa

24 November 2005

A shop is successful when retailers and distributors follow a merchandising plan that optimises the shopping experience of the customer and thus assures his future loyalty.

Retailing is undergoing far-reaching changes as a result of intense competition. The desire to maximise profit requires each business to have up-to-date knowledge of the retail industry. This knowledge enables retailers to anticipate the future and to adapt effectively to changing consumer tastes.

The design and personality of a shop, together with its product presentation (merchandising), will have an important influence on consumer behaviour and, consequently, on the motivation of shoppers to buy.

Consumers form their opinions about a shop even before they step foot on its premises. The messages and signals emitted by the retailer help shape consumer opinions. Indeed, before they begin to buy, consumers already have formed expectations about what is on offer at the shop of their choice. For this reason, it is extremely important for a retailer to develop a good communication plan that bolsters both consumer expectations and their first impression of the brand image.

Shaping expectations

But, how does one project the personality of a shop from outside the shop? Retailers communicate specifically with consumers through visual images and manufacturers do the same through the packaging of their products. Designers and manufacturers face the task of influencing consumer reactions to a product by shaping expectations of the retail outlet even before the customer enters the shop. Retailers and manufacturers manage consumer perceptions and expectations through the images they provide of the retail outlet, thereby enabling customers to decide whether they want to enter a shop or not.

In short, optimum management of the point-of-sale by the manufacturer and by the distributor is essential. Manufacturers achieve this with their commercial and merchandising policies. Distributors do the same by marketing their shops.

Manufacturers are becoming increasingly concerned with the point-of-sale for their product. Most are devising merchandising policies-- in accordance with their brand image and market position-- that have the following objectives:

::Attracting shoppers to the retail outlet.
::Increasing the number of visits by interested consumers.
::Creating the appropriate atmosphere for quality customer service.
::Bringing the product to market quickly.
::Developing the relationship between product demand and the distributor.
::Multiplying the effects of a campaign inside and outside the point-of-sale;
::Taking maximum advantage of campaigns that enhance brand image
::Managing the shop efficiently
::Increasingly product profitability
::Bringing the product to life through packaging, thus attracting the attention of the buyer-consumer and increasing product rotation.

All of this must be achieved while minimizing the costs of product placement in the shop.

In an effort to attract customers, create customer loyalty and maximise the market potential of each shop, distributors adopt merchandising techniques aimed at optimizing the following characteristics of their retail outlets:

::Shop location
::Shop traffic and circulation
::Customer numbers and quality
::Profitability per customer
::Inventory management

To conclude, RETAIL begins with efforts to attract the consumer-customer and ends with the optimum management of their buying experiences and sensations. The ultimate goal is to maximize consumer enjoyment and increase their desire to repeat the experience.


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