Discount Store Dilemma: The Hidden Cost of Poor Visual Merchandising
According to a recent study by One Door and GlobalData, discount retailers are losing about $31.8 billion annually due to poor visual merchandising standards.
(You can download the full report here.)
Overview
Key Shopper Insights
Discount shoppers prioritize low prices and quick access to trendy, discounted items. While store aesthetics are less important, effective in-store presentation influences return visits and larger purchases.
Top Merchandising Challenges for Discount Retailers
- Hard-to-Find Products: 41.5% of shoppers identified hard-to-find products as the top merchandising issue.
- Poor Display Management: 39.7% cited messy displays as their biggest frustration. 39.4% were annoyed by cluttered displays, while 31.7% pointed to disorganized displays.
- Boring Displays: 22.3% of shoppers were dissatisfied with uninspiring displays.
- Lack of Fixture Maintenance: Nearly 20% of shoppers expressed frustration with outdated or damaged fixtures.
Hard-to-find Products
Hard-to-find products are a major challenge for discount retailers, with 41.5% of surveyed shoppers identifying this as their top frustration.
Stores like TJMaxx, Marshalls, and Ross, known for their wide and ever-changing selection of overstock, discontinued items, and surplus inventory, often create a “treasure hunt” shopping experience.
While this approach appeals to budget-conscious consumers seeking quality bargains, it can also make navigating the store more difficult.
Shoppers may enjoy browsing, but if they struggle to find what they need, their patience runs out quickly.
In fact, 23% of consumers have left at least one discount store without making a purchase due to poor merchandising.
This is especially problematic in a competitive retail landscape where shoppers can easily find similar products at other discount stores or online.
For discount retailers, ensuring an organized and accessible shopping experience is critical to retaining customers and avoiding lost sales.
Poor Display Management
Messy, cluttered, and uninspiring displays are a significant source of frustration for many discount shoppers and bargain hunters.
In stores like Primark, H&M, and Forever 21, nearly 40% of shoppers identified messy displays as their biggest issue, followed closely by cluttered displays (39.4%) and disorganized displays (31.7%).
Another 22.3% of shoppers pointed to boring or uninspired displays as a key merchandising concern. These display challenges represent a unique problem for discount retailers.
Value-focused retailers rely on fast-fashion production models and ever-changing inventory to deliver trendy, affordable merchandise at competitive prices.
While this approach ensures fresh products on the shelves, it also increases the risk of poorly managed displays. The frequent turnover of stock can quickly lead to messy, cluttered, or disorganized store layouts if not handled carefully.
This is especially problematic for these retailers’ core audience, who are price-sensitive and younger shoppers. They expect convenience and visual appeal in their shopping experience.
Poor display management has a tangible impact on these retailers’ bottom line. Customers frustrated with displays often leave without making a purchase, costing discount stores an estimated $15 billion in lost sales annually.
Additionally, uninspiring or boring displays fail to engage trend-focused consumers, leading to another $1.5 billion in lost revenue each year.
By prioritizing thoughtful and consistent visual merchandising, discount retailers can overcome these challenges.
Streamlined and engaging displays improve customer satisfaction, foster brand loyalty, and ensure shoppers return for the deals and the positive store experience.
Worn-out Fixtures
Worn-out fixtures accounted for almost 20% of consumer frustrations.
In fact, 13.7 million shoppers walked out of at least one discount store due to worn-out fixtures, costing retailers $2 billion in lost sales.
The fast-paced nature of discount retail operations can place significant strain on store fixtures. Worn-out shelving, racks, and endcaps are common in these environments due to the frequent restocking and handling of merchandise.
Fixtures maintenance may be deprioritized, as retailers allocate resources toward securing inventory and maintaining low prices. Unfortunately, this wear and tear can negatively impact the shopping experience.
Value-focused shoppers may tolerate minimal hiccups in store design, but they still expect a functional and inviting shopping experience.
Worn-out fixtures can undermine this expectation by creating a perception of neglect or disorganization, potentially devaluing the overall shopping experience.
When fixtures appear outdated or damaged, it may lead shoppers to question the quality of the merchandise itself, which is especially risky in secondhand shopping environments.
For discount retailers, investing in well-maintained fixtures is about ensuring the functionality and efficiency that their customers rely on to discover great deals in a pleasant and organized space.
The Cost of Poor Merchandising: The $125 Billion Challenge
According to the study, almost half of all consumers who experience poor visual merchandising in discount stores are unlikely to return.
Discount retailers can no longer rely on their merchandise or store type as a justification for poor visual merchandising.
To gain insight into how imperative organized, functional, and visually engaging merchandising is for discount retailers, download GlobalData and One Door’s latest report, The Cost of Poor Merchandising.