Shelf Shock & Aisle Anxiety: How Poor Visual Merchandising Hurts Needs-Based Retailers
According to a recent study by One Door and GlobalData, needs-based retailers are losing about $29.8 billion annually due to poor visual merchandising standards.
(You can download the full report here.)
Overview
Key Shopper Insights
Needs-based retailers are defined as those that sell everyday products like food, groceries, and household goods, such as cleaning products, bedding, and pet supplies.
Familiar retailers for this segment include massive supermarket chains, such as Walmart and Target, and regional grocers, including Kroger, Albertsons, and Safeway.
Most shoppers at needs-based stores go in with a purpose. This differs from the casual shopping experiences of mid-market or luxury stores where customers prefer to browse without intention.
(Though, those segments have their own poor visual merchandising challenges.)
Two types of consumers frequent needs-based stores:
- Those who are doing weekly grocery shopping with specific, multi-item lists
- Those who are quickly grabbing an essential product and leaving
Top Merchandising Challenges for Needs-Based Retailers
- Hard-to-Find Products: 45.8% of shoppers identified hard-to-find products as the top merchandising issue.
- Poor Display Management: 39.2% cited messy displays as their biggest frustration. 36.1% were annoyed by cluttered displays, while 26.9% pointed to disorganized displays.
- Boring Displays: 24.2% of shoppers were dissatisfied with uninspiring displays.
- Confusing Signage: About 18% of shoppers expressed frustration with confusing signs.
Hard-to-find Products
Hard-to-find products stand out as the single largest merchandising issue across all retail segments.
For needs-based retailers, however, it’s particularly troublesome. These retailers cater to shoppers with specific, recurring needs — like a basic weekly grocery list.
These shoppers rarely browse. They come shopping with a clear purpose.
They tend to be either:
- Brand evangelists, who consistently purchase their favorite brand, or…
- Price conscious, who prioritize affordability and often opt for generic store brands as alternatives
Regardless of their purchase motivation, these shoppers share a common, deep expectation: Finding their preferred products quickly and easily.
Many are even so familiar with their local store that they curate their grocery list based on the store layout, optimizing for time.
Imagine how frustrating it would be to write a list, head to the usual aisle, and find that the product isn’t where they expect.
That would immediately dampen the shopping experience, and it might even make shoppers avoid buying the product at all.
According to the report, 26.6 million consumers abandoned a needs-based retailer in the last year as a direct result of hard-to-find products.
Many shoppers opted to forget the product or purchase it elsewhere rather than waste time searching.
Hard-to-find products are costing needs-based retailers about $2.7 billion per year. That’s an expensive wake-up call.
Poor Display Management
For needs-based retailers, familiarity breeds expectations.
These stores attract regular shoppers who are accustomed to a consistent layout and rely on speed and simplicity to complete their shopping quickly.
When displays are messy, cluttered, or disorganized, they create several visual merchandising issues for these time-conscious customers:
- Disrupted efficiency. For most consumers, grocery shopping is a routine chore they want to finish as quickly as possible. Disorganized displays make it harder to find items, forcing shoppers to spend extra time searching and adding unnecessary stress to their experience.
- Increased decision fatigue. Needs-based shoppers usually have a clear plan. They know their preferred products and where to find them. Cluttered displays force them to dig through shelves, making the shopping process more overwhelming by introducing unnecessary choices and mental fatigue.
- Negative product and store perceptions. Messy displays can harm the way customers perceive products. A disorganized presentation might suggest poor quality or lack of care, which can also reflect poorly on the store’s overall brand. (This is also a common merchandising challenge for discount retailers.)
Poor display management led to almost 60 million shoppers abandoning needs-based stores over the past year, costing retailers approximately $12 billion.
(This doesn’t include the 15.4 million shoppers leaving due to boring or uninspired displays, which cost needs-based retailers another $1.5 billion.)
Confusing Signage
Confusing signage is a significant merchandising challenge for needs-based retailers, standing out as a top frustration among their shoppers.
This retail segment experienced the highest percentage of customers reporting dissatisfaction with unclear or misleading signage:
- 18.1% of needs-based shoppers were frustrated by confusing signage.
- 15% of discount shoppers shared the same frustration.
- 9.5% of mid-market shoppers found signage confusing.
- 8.5% of luxury shoppers reported similar issues.
Confusing signage costs needs-based retailers $1.76 billion annually.
Needs-based shoppers prioritize efficiency, expecting to get in and out of the store quickly. Clear signage plays a crucial role in helping them achieve this.
However, signage presents a unique challenge for needs-based retailers.
Many of these shoppers are price-conscious, often checking prices and clipping coupons.
While many have their go-to products (whether brand-name or generic), others can be influenced by deals and expect discounts to be prominently and accurately displayed.
When signage, particularly for discounts, is unclear, mislabeled, or contradictory, it signals to shoppers that the store isn’t prioritizing their needs. This erodes trust in the store’s reliability and care for its customers.
And the stakes are high: 15% of needs-based shoppers say they’re unlikely to return to a store if they encounter merchandising challenges like unclear signage.
For retailers, this visual merchandising misstep can lead to significant losses in customer loyalty and revenue.
The Cost of Poor Merchandising: The $125 Billion Challenge
Needs-based retailers can no longer rely on providing their consumers with necessities as a justification for poor visual merchandising.
Shoppers deserve an efficient, organized experience, especially if they’re prioritizing your store every week.
To gain insight into how important visual merchandising is for needs-based retailers, download GlobalData and One Door’s latest report, The Cost of Poor Merchandising.