Merchandising: best practices for perfect shelf presentation

A product that isn't on the shelf doesn't get bought. Sounds obvious. Yet our audits show: in 25 to 35 percent of all stores, placement is off. The product is in the wrong spot, sold out, the price tag is missing or the display is damaged. Every one of those gaps costs you revenue.

Merchandising isn't a glamorous discipline. No roadshow, no event, no Instagram story. But it's the foundation your entire retail revenue rests on.

Why merchandising decides your revenue

Here are the numbers that show the difference: a product at eye level sells 35 percent better than in the bend zone. A one-day out-of-stock costs you not just that day's revenue, but customers who reach for the competition and don't come back. A clean, complete display sells 20 to 40 percent better than a half-empty or damaged one.

And yet many brands neglect merchandising. Because it's unsexy. Because it sounds like "stocking shelves". Because the budget would rather flow into the next campaign than store visits. That's an expensive mistake.

Do the maths: you have 200 stores in Switzerland. In 30 percent, placement is off. That's 60 stores selling 15 to 30 percent below their potential. If each store turns over CHF 500 per month, you lose CHF 4'500 to CHF 9'000 in revenue per month. CHF 54'000 to CHF 108'000 per year. For a problem you can solve with a merchandising programme costing CHF 25'000 a year.

The perfect shelf placement

Shelf position is the single most important factor for sales. Here are the five rules of optimal placement:

Rule 1: eye level is buy level. The zone between 120 and 160 cm is the "golden zone". Products here are bought 35 percent more often than in the bend zone (below 80 cm) and 25 percent more often than in the stretch zone (above 180 cm). Negotiate this placement with the retailer.

Rule 2: block, don't scatter. Your products should stand together as a block, not scattered across the shelf. A block creates brand presence and aids orientation. At least 3 facings side by side are needed to be noticed.

Rule 3: to the right of the market leader. If you're not the market leader, stand to their right. The eye moves from left to right. Whoever stands to the right of the known brand benefits from the attention flow. This is demonstrably true.

Rule 4: respect the planogram. Coop and Migros work with planograms: defined shelf images that prescribe which product goes where. If the merchandiser doesn't know or ignores the planogram, the placement will be corrected on the next visit from the category manager. Know and respect the planogram, and use the wiggle room within it.

Rule 5: enforce FIFO consistently. First In, First Out. Older stock to the front, new to the back. Sounds obvious, but isn't done in 20 percent of stores. The result: expired goods on the shelf, returns and lost trust.

Avoiding out-of-stock: securing availability

Out-of-stock (OOS) is the number one revenue killer. If your product isn't on the shelf, the customer buys an alternative. And often they stay with the alternative.

The numbers are unambiguous: the average OOS rate in Swiss retail is 5 to 8 percent. For promotional products even 10 to 15 percent, because the surge in sales outpaces reordering. Every percentage point of OOS costs you around 1 percent of annual revenue.

The most common causes of OOS: the product is in the warehouse but not on the shelf (shelf gap). The order was triggered too late. The store reduced inventory (space optimisation). The product was misshelved (phantom inventory).

What you can do about it:

• Regular store visits. A merchandiser checks stock and refills. Ideally weekly in the top stores.
• Pre-promotion alignment. Before every promotion, check store stock and order ahead if needed. Nothing is more frustrating than a tasting with no product on the shelf.
• OOS tracking. Through real-time reporting via kyoX, our merchandisers document shelf state on every visit. You see in real time which stores have problems.
• Direct store communication. A good merchandiser knows the store manager personally and can raise ordering issues directly.

Displays and secondary placements

A display outside the home shelf is like a second chance to be seen. Secondary placements lift sales by 30 to 100 percent, depending on location and design.

The main display types in Swiss retail:

• End-cap: the front of the shelf. Premium placement. CHF 500 to CHF 2'000 per week per store. Uplift: 200 to 400 percent.
• Floor stand: standalone display in the aisle. Eye-catching but needs space. CHF 300 to CHF 800 per unit (one-off). Uplift: 100 to 200 percent.
• Checkout area: the impulse buy zone. For small, cheap products. Extremely limited surface, high demand. Uplift: 300 to 500 percent.
• Counter display: small display on the till or counter. For small products and trial sizes. CHF 50 to CHF 150 per unit. Uplift: 50 to 100 percent.

The key to success: displays need to be maintained. A display that's half-empty and crooked after three days does more harm than good. Without regular merchandising visits, every display deteriorates. Plan upkeep effort from the start.

The merchandising audit: how to find the gaps

Before you launch a merchandising programme, you need a baseline. A merchandising audit shows you where the problems lie and how big the potential is.

What an audit includes: visit to a representative sample (e.g. 20 stores). Check of placement, availability, price tags, display state and cleanliness. Photo documentation for every product and store. Comparison with the planogram and contractual agreements. Concrete recommendations and prioritisation.

An audit result from one of our current studies:

Criterion	Stores in order	Stores with deviation
Correct placement (per planogram)	68%	32%
Product available (no OOS)	91%	9%
Price tag present and correct	78%	22%
Display set up and maintained	55%	45%
FIFO respected	72%	28%

These numbers show: even for established brands there's significant optimisation potential. Especially with displays (45 percent deviation) and price labelling (22 percent deviation), revenue is on the table.

Building a merchandising programme

A one-off audit gives you a snapshot. Sustained success comes from a running merchandising programme. Here's how to build it:

Step 1: prioritise stores. Not every store needs the same attention. Rank stores by revenue potential into A, B and C stores. A stores (top 20 percent) get weekly visits. B stores bi-weekly. C stores monthly.

Step 2: define KPIs. What do you want to measure? OOS rate, planogram compliance, display state, facing count. Set target values and measure progress. Without KPIs, merchandising is flying blind.

Step 3: train merchandisers. Your merchandiser has to know your product, understand the planogram and master the reporting tool. A good merchandiser is also a communicator who talks to store managers as equals.

Step 4: set up reporting. Every store visit is documented: photos, stock counts, actions. Through a dashboard like real-time reporting via kyoX you see the status of every store in real time. You spot patterns (which stores are chronically out of stock?) and can intervene precisely.

Step 5: optimise continuously. After 3 months you have enough data to adjust visit frequencies, identify problem stores and calculate ROI. Merchandising isn't a project, it's a programme.

Typical costs: a national merchandising programme for 200 stores with weekly to bi-weekly visits costs CHF 20'000 to CHF 35'000 per month. With an average revenue uplift of 15 to 30 percent, the programme pays for itself in most cases within the first quarter.

Want to know how your products are being presented? Let's talk about your project and we'll run a no-obligation merchandising audit for you.