Basic principles for effective merchandising

Merchandising is a strategic process that plays a key role in fast-moving consumer goods (FMCG) retail. For brands, distributors, and merchandising agencies, it is not just about arranging products on shelves—it is a tool for increasing sales, growing market share, and ensuring visibility in the competitive environment of retail chains.

Proper merchandising ensures that products are strategically placed, always available, and presented in a way that maximizes their exposure and appeal to consumers. Without effective control over this process, even the best products can go unnoticed or be misrepresented in retail outlets.

In this article, we will examine the key principles of effective merchandising, focusing on how brands and distributors can implement successful strategies for managing product presentation in retail chains. We will examine the role of merchandising teams, the importance of data and automation, and optimal methods for product positioning and planogram creation.

Whether you are a manufacturer, distributor, or merchandising agency, understanding and applying these principles will help you improve the effectiveness of your commercial operations and increase the impact of your brands at the point of sale.

Key objectives of effective merchandising

Merchandising is a key tool for managing products in retail chains, ensuring maximum visibility, proper execution of marketing campaigns, and effective inventory management. To be successful in the market, manufacturers, distributors, and merchandising agencies must implement strategies that not only position products effectively but also ensure their accessibility and attractiveness to consumers.

Increasing sales through strategic positioning

The position of a product in a retail outlet has a direct impact on its sales. Proper shelf placement and the use of high-traffic areas can increase visibility and purchases.

To achieve this, it is necessary to:

• Compliance with planograms and agreed distributions with retail chains.
• Monitoring of positioning through regular on-site checks.
• Flexibility in shifting products according to seasonal trends and consumer behavior.

Ensuring constant availability and preventing “out-of-stock” situations

A lack of product on the shelf means lost sales and a loss of market share. Companies that do not actively monitor their inventory are at risk of:

• Reduced recognition among customers who choose a competing product.
• Missed promotional opportunities when an item is unavailable during an active campaign.

To avoid these problems, companies should:

• They monitor inventory in real time through mobile merchandising management platforms.
• Report shortages immediately so that corrective action can be taken.
• They use demand forecasts to reduce the likelihood of shortages.

Control over the implementation of promotions and marketing activities

Promotions are a powerful tool for increasing sales, but only if they are done correctly.

Unfulfilled or poorly presented promotions can result in up to a 25% loss of expected additional sales. Companies should:

• They monitor the implementation of promotional offers against the marketing calendar.
• Ensure that POS materials (banners, racks, displays) are correctly positioned.
• They check whether promotional products are correctly labeled and positioned in areas with the highest traffic.

Competition monitoring and market data collection

Successful merchandising means not only optimizing your own products, but also analyzing the competitive environment.

Companies should monitor:

• The positioning and activities of competitors in retail chains.
• The pricing strategies of competing brands.
• The launch of new products and their promotional campaigns.

Why are stores not responsible for these tasks?

Retail outlets manage thousands of products from dozens of suppliers and do not have the resources to monitor each brand individually. If brands and distributors do not actively manage their merchandising, they risk:

• Loss of shelf space to more active competitors.
• Depletion of stock, leading to loss of customers.
• Poor execution of promotions, which reduces the effectiveness of campaigns.

That is why successful companies invest in active control over merchandising execution—through specialized field teams and monitoring technologies.

The role of field merchandising teams and agencies

Successful merchandising depends not only on a good strategy, but also on high-quality execution in retail outlets. This is where field merchandising teams and specialized agencies play a key role—they ensure that all standards are met, products are well positioned, and promotional activities are carried out correctly.

Key tasks of field merchandising teams

Let’s take a look below at the key tasks that merchandising teams must perform to ensure the proper implementation of the strategy in retail outlets.

Checking and correcting the layout

The floor plans and terms agreed with retail chains determine where and how products should be placed. Merchandising teams ensure that:

• The products are arranged according to the approved floor plans.
• There are no misplaced goods that could reduce brand visibility.
• The shelves are well stocked, and the products are upright and well displayed.

Even the best-designed strategies can fail if their actual implementation is not monitored.

Reporting shortages and errors in inventory and prices

One of the most common reasons for missed sales is out-of-stock situations or pricing errors. Merchandising teams:

• They monitor inventory and report shortages in real time.
• They check whether the prices on the labels correspond to the agreed commercial terms.
• They make adjustments or flag issues so that they can be addressed quickly.

This data is used not only for timely restocking, but also for optimizing logistics and forecasting demand.

Control of POS materials and displays

The brand’s presence in the store is not limited to its position on the shelf—advertising materials and promotional displays play a huge role in attracting customers’ attention. Field teams check:

• Whether the promotional areas have been constructed according to the instructions.
• Are the banners, racks, and advertising materials well positioned and in good condition?
• Are promotions clearly marked and properly communicated to customers?

Poor execution of promotional activities can reduce the impact of marketing campaigns, which directly affects sales.

Merchandising automation – what is it?

The digitization of merchandising is a key factor for effective management of field teams, optimization of performance in retail outlets, and provision of data for better business decisions. In the competitive FMCG environment, where products must always be available, correctly positioned, and presented according to the marketing strategy, the use of technology is no longer an advantage but a necessity.

What problems does automation solve?

Traditional merchandising management methods—paper reports, manual data entry, and periodic physical checks—lead to a lack of transparency, delays in adjustments, and lost sales. Automation solves the following key problems:

Insufficient visibility of performance

Many brands and distributors have no real idea whether the agreed merchandising standards are being adhered to in stores. This lack of visibility can lead to:

• Improperly arranged products that reduce sales.
• Non-compliance with the agreed exposure and promotion areas.
• Delayed corrections for errors in execution.

The solution – Use real-time monitoring software that allows:

• Digital verification of performance through photos and reports from retail outlets.
• Automated comparison of actual performance with predefined standards.
• Fast communication between field teams and managers to correct mistakes immediately.

Difficulties in controlling large field teams

National distributors and merchandising agencies manage hundreds, even thousands, of field representatives. Without an effective task management and communication system, the following issues arise:

• Lack of accountability – there is no clear control over who performs the tasks and when.
• Slow response to problems in stores.
• Inability to centrally collect information on product performance.

The solution – Automated team management through merchandising software that provides:

• Centralized system for task distribution and progress tracking.
• Clear KPIs for measuring the effectiveness of field teams.
• Real-time interactive communication that minimizes delays and errors.

Slow data reporting and inefficient decision-making

When reports and audits are processed manually, this leads to:

• Delays in correcting errors, which reduces the effectiveness of merchandising campaigns.
• Lack of up-to-date data on availability, promotions, and competition.
• Missed opportunities for optimization that could improve sales.

The solution – Use of software for digitized collection and real-time performance tracking, which allows:

• Centralized collection of information from retail outlets – data on positioning, availability, and promotion execution, reported directly by field teams via mobile devices.
• Photo documentation and performance verification – field teams upload photos of completed tasks, ensuring transparency and quick control over brand standards.
• Fast reporting and communication – data is sent immediately to central teams, enabling a rapid response to deviations from standards.
• Digital performance reports – access to standardized reports that help managers analyze task completion and team performance.

The concept of the “Golden Triangle” in modern merchandising

The “golden triangle” is one of the most effective concepts in merchandising, helping brands and distributors ensure that their products receive maximum visibility and attract customers’ attention. It is based on the analysis of the areas with the highest customer traffic in retail outlets, which allows for optimal distribution of product positioning.

While retail chains strive to optimize these areas to increase average purchase value, for brands and distributors this is a key opportunity to increase sales and strengthen brand presence in stores.

What are the main areas of the “Golden Triangle”?

To achieve maximum impact on customer decisions, brands and distributors must ensure that their products are positioned in key high-traffic areas:

The area around the entrance – first impression and customer flow direction

• This is the first point of contact with customers, making it an ideal place for high-margin products or new product launches.
• Placing attractive displays, promotional racks, and branded areas in this part of the store can direct customer flow and increase the likelihood of purchase.
• Introducing seasonal or limited offers in this area can create a sense of urgency and exclusivity.

The central aisles – the main area for seasonal products and promotions

• The central aisles are the main routes for customers when moving around the store and provide an opportunity to increase product exposure.
• The placement of promotional racks, themed displays, and temporary stands here increases visibility and encourages purchases.
• Brands can negotiate additional displays in this area to enhance the visibility of their products.

The checkout area – encouraging impulse purchases

• Small, easy-to-pick-up products that customers can add to their purchases at the last minute have a high impulse purchase rate.
• Placing energy drinks, chocolates, batteries, chewing gum, and other fast-moving consumer goods in this area increases sales volume without requiring a pre-planned decision from the customer.
• Using promotional offers such as “buy 2, pay for 1” or discounted prices for products in this zone can increase sales conversion.

Conclusion

Effective merchandising is critical to the success of brands, distributors, and merchandising agencies in retail chains. It is not simply a process of arranging products, but a strategic approach to maximizing sales, ensuring constant brand presence, and optimizing in-store performance.

The basic principles of merchandising discussed in this article emphasize the importance of:

• Controlled product positioning – to ensure visibility and accessibility for customers.
• Monitoring inventory levels and preventing out-of-stock situations – so you don’t miss out on sales.
• Monitoring and managing field merchandising teams to ensure standards are met.
• Digitization and the use of technology – to improve transparency and efficiency in process management.

The implementation of merchandising management software solutions, such as Movemar, enables companies to automate key processes, receive real-time data, and make informed decisions that improve store performance.

To remain competitive, brands and distributors must invest in active merchandising execution control, leverage data for optimization, and ensure their products receive the attention they deserve at the point of sale.

Companies that apply these principles will not only be able to improve their performance in retail chains, but also build a stronger brand presence and sustainable sales growth.

This article is the first part of the series “All About Merchandising,“ in which we examine key aspects and strategies for successful merchandising in the fast-moving consumer goods (FMCG) sectors. 

In the next post—Types of Merchandising: Strategies for Brands, distributors, and merchandising agencies, we will look at the different types of merchandising that can be applied by brands, distributors, and merchandising agencies to improve the effectiveness of their strategies and achieve better results in retail outlets. 

This publication is part of “Merchandising: A Complete Guide to Modern Retail” – a comprehensive resource covering all key aspects of merchandising: from strategies and techniques to standards, training, and software solutions.
📖 Read the main article here: Merchandising: A Complete Guide to Modern Retail