2022 Visual merchandising trends in retail store chains

29 November, 2021

We live in challenging times.

On the one hand, unexpected situations like the pandemic affect how we live and work. On the other, the technological advancements help us adjust to the New Normal.

The same applies to the retail store sector which the last couple of years has been hit hard by lockdowns, occupancy and distancing restrictions. These setbacks intensified the downsizing of brick-and-mortar retail
stores and pushed even the non-tech savvy consumers to e-commerce.

Is this then the demise of Physical Retail? Well, it may be but only for those retailers that will miss the digital forest! The rest will re-think of the purpose of the Physical Store and invest in customer experience. The new generation of retail employees and consumers represents a fertile ground for the adoption of new technologies. Any such technology when selected should contribute to one and single retailer’s goal: to improve and eventually offer unprecedented customer experience (CX).

What CX means for common people is different for each one and may be any of the following: Augmented and Virtual Reality, variety of displayed products, easy access to product-related info, Pick-and-Go shopping or anything else that makes us enjoy visiting and buying from the Physical Store.

One can easily understand that digitalization is important for any enhancement like those just mentioned. What may not be so obvious is that a strong prerequisite for consumer facing digitization is the automation of the retail back-office processes such as organizational and per-store inventory management, category and space management based on modern systems that allow real time interaction, provide performance and in-store analytics, KPI monitoring, workforce management and many more.

Technology has given today’s retailers the opportunity to solve long existing automation problems once and for all. These solutions have formed new trends in the retail industry and set new standards on what is functional and acceptable. Let’s have a look at the most important of them.

Retail Digital Twins for localized efficiency

For years, the category managers have been coming up with planograms that it wasn’t sure at which level they will be executed. Will the store personnel read all relevant e-mails? Will they understand every instruction? The truth is that most in-store teams don’t have the expertise to decipher complex planograms and implement the proposed changes, without deviations. Even more so, when we talk about generalized plans, that need to be realized in stores with different space arrangements and customer demographics.

Retail store digital twins have given an answer to the above. Through identical twin store representations, they provide a realistic overview of the individual physical stores. Moreover, specific store information such as BIM (building information modeling) files, pictures or pdf files are stored in a common system, together with all corresponding realograms, planograms and space plans. This “localized” information helps the category managers to create fully tailored planograms, which are easier to be followed by non-expert in-store employees and implemented without significant deviations. Thus, minimizing the planogram audit time and maximizing the sales potential per store.

Fully integrated, cloud-based platforms for higher reliability

In most retail chain companies, stored information is scattered across multiple systems, making it difficult to be updated without mistakes, or to be found quickly. As users need to manually deal with the data or transfer them to a different location to be processed, precious time is being wasted and errors are most likely to happen. Moreover, last minute category management changes may not be updated promptly in all systems or this information may slip through and never be followed. This promotes disconnection between collaborating departments and doesn’t allow the visual merchandising team to track performance of their plans or analyze execution performance patterns. And more importantly, it limits the profitability of marketing campaigns.

The solution to this inefficiency is cloud-based planogram platforms, fully integrated into the pre-existing corporate systems. Data can be securely stored in locations where anybody can access them with ease and confidence, minimizing the risk of data corruption and unifying communications between headquarters and stores under a single workstream. By having this information available on the shop floor in their tablet or even their mobile phone, in-store employees can save time from not having to run at the back room to review visual merchandising instructions. This collaborative planogram execution and workflow optimization increases productivity, can save labor time up to 50% and make better use of physical space by 15%.

Artificial intelligence for maximized performance

Even nowadays, the majority of retailers make little combined use of their data and run analytics with limited scope. This prohibits them from leveraging lessons of the past, into building more successful future category management and marketing strategies.

The introduction of artificial intelligence algorithms in the retail management platforms gives the opportunity for deeper analysis of merchandising data and automatic decision making on product assortment, SKU (stock keeping unit) forecast per store or warehouse and inventory replenishment. Furthermore, ideal and alternative planograms per furniture can be automatically generated, that will need minimal editing by the experts, before releasing them for implementation.

A more efficient stock and shelf replenishment procedure can be translated into better space management and increased profitability, either by marketing more product lines or leasing smaller physical stores.

Additionally, as more information is stored and processed on customer’s purchases, sales forecasting and planning can be more precise, while opportunities arise for more personalized and localized marketing. Customers living in different communities, have different needs and buying patterns. Localized merchandising helps retail chains to develop better connection with their customers and maximize their profits through educated product assortment.

Heatmaps & e-label use for targeted profitability

Another modern feature that can prove a game changer, is the ability to analyze the combined data of sales, profit and customer journey in each shopping area to draw vibrant heatmaps. This can be further associated with e-label (pricing) systems, for better info-point management.

This functionality can help the visual merchandising team to develop specific space planning performance KPIs (key performance indicators) and assess their planogram performance in detail. They can maximize profitability per square meter by increasing space management cost savings and margins associated with every display position.

Paperless functions and sustainability

Another trend that becomes increasingly popular is the costumer sensitivity towards environmental issues, which can be also translated in retail businesses running their functions on consuming as little paper as possible.

As shown above, the digital category and space management platforms give the ability for seemingly paperless visual merchandising processes and can allow retail brands to develop another significant touch point with their customers.

If any of the above seem appealing to you and need more information on how your retail business can be benefited today, by leveraging the visual merchandising processes of the future, you can book now your 30-minute free consultation call with one of Yodiwo’s experts.