Appliance Retailer’s longest standing writer, retail trainer Bob Johnson, died suddenly last week. To honour his incredible contribution to the industry in general and our publication specifically, this week we will be presenting a special series called The Best of Bob. Each day we’ll publish a standout piece from his remarkable 20 years of service columns for Appliance Retailer.

We often hear of retailers being described as ‘merchants’ — those who merchandise — but what does this actually mean? Trust Bob to explain! Here he is from 2010…

The Simple Art of Merchandising

Every store will have some stock that just won’t be sold without some help. Here are some tips on how to make the most of merchandising to get them moving.

By Bob Johnson

Back when I was 15 years old, my first lesson in merchandising came along and whacked me in the side of the head. Trouble is, I didn’t find out just what it was that I had learnt until some years later. Merchants may have been applying merchandising skills for thousands of years, but I had never heard my boss, or anyone else, even mention the word.

Tale of the Tiles

Here’s what happened: I was in my first job in retail as a junior in the floor-coverings section of a large department store. We had packets and packets of floor tiles in stock that were (a) smaller than the industry standard size, and (b) only available in a couple of really drab shades of brown or green.

They were horrible, and we never seemed to sell any, despite their bargain price of only 10 cents each. It was my job to keep these hundreds of tiles tidy, so I would stack them and restack them every day, because customers would rifle through them, ripping open ever more packets in a desperate attempt to find a decent colour, which simply didn’t exist.

One day, the store manager offered our department free space in a double-page newspaper advertisement featuring items that would all be placed at $1, so it was agreed that we would advertise these wretched floor tiles at “10 for $1”,

Well, the day the ad hit the paper I couldn’t believe what happened. Customers didn’t just buy them, they were almost fighting over them, pushing, pulling and grabbing, to get at them!

Within a few days, there were only a few tiles left. Same tiles, same price (even with my poor maths I knew 10 for $1 was the same as 10c each); perhaps you can see why I was confused. Of course, I eventually learnt that part of the reason those tiles suddenly sold was that the customers’ value perception had changed. The strong theme of the advertisement — everything $1 — had obviously grabbed the readers’ attention, and then our tiles at 10 for $1 seemed like excellent value for money.

Since then, as a retailer, I’ve had a lot of fun exploring merchandising principles in my stores and, as a trainer, helping other retailers improve the merchandising and display in their own stores.

Art vs Science

Merchandising is not a science. The rules are not chiselled in stone. Merchandising is more of an art because, while there are implicit rules, they are often bent, or even broken, to achieve visually striking effects.

Retailers should not, however, get too carried away with the art aspect. The main purpose of visual merchandising is to increase sales: art for art’s sake belongs in a gallery. So if your window display wins first prize in a display competition, congratulations. But did it sell anything?

I recall having a chat some years ago with an industry mate, the late Ross Whitelaw (Leading Edge, Dick Smith), and he summed up merchandising this way: “It’s the art of exposing goods to the danger of being sold”. Simple and true.

Nothing my old store manager did in promoting the tiles was devious or untrue: it was just a simple way of luring customers to a perceived bargain.

Cars, Cards and Cookies

Consider some other examples of merchandising that I’ve come across: I picked up two packets of chocolate biscuits in a supermarket because they were two for $4. Seemed like good value to me, but a week later I saw the same biscuits in my local convenience store for $1.78 a packet.

One retailer I was working with had reduced some Matchbox cars to $2 each. I suggested the manager put them into a promotional dump bin at 5 for $10. They quickly sold out — and guess how many most people bought?

In another case, I bought an SD card the other day displayed in a dump bin at $8 each. The RRP sticker on the item was around $40, so I wondered how many I would have bought if they had been merchandised at 3 for $25. With around eight pieces of electronic equipment in our home that use SD cards, I may have bought three – perhaps even six!

My main point: whether you’re trying to sell cars, cards, cookies or consumer electronics, merchandising is the art of exposing goods to the danger of being sold. Thanks for that tip, Ross!

Great stuff there from Bob! ‘The art of exposing goods to the danger of being sold’ was one of Bob’s great expressions. Another one I always liked was, ‘If a customer seems to like a product, ask them if they would like to buy it. And then be quiet: whoever speaks next keeps the product!’. 

Here are the links to all five entries in the Best of Bob:

Nothing happens in retailing unless you make it happen
Selling on price only… it’s been nice knowing you
You don’t have to be better… …just try being different!
The Simple Art of Merchandising
The Big Four customer objections — and how to handle them

(Commentary by Patrick Avenell. Additional research by Damon Apter.)