The Merits of Outsourced Merchandising

by George Efstathiou

 

In today’s competitive and very complex business environment it is very important to be able to focus on your core business and concentrate on the things you do better. Activities and functions that do not fall within your core competences and could be performed easier and more cost effectively by a third party should be outsourced. Cyprus’s current difficult financial situation and the ensuing negative consequences for the Cyprus economy impel all businesses to become more efficient, focused and cost effective.

 

Merchandising of retail products is a prime example of an activity that could yield significant benefits when outsourced.

What is actually, Merchandising?

 

Merchandising is defined as the activity that promotes the sales of goods at retail. It includes functions, such as arrangement of goods and design of retail space, to make the buying experience more attractive for the consumer and more lucrative for the seller. Merchandising consists of product placing and display, retail store layout, signage, placing of price tags, promotional activities such as special offers, implementation of corporate planogramms and generally all techniques that aim at maximising the sales for the retail company.

 

The correct and efficient Merchandising can increase the number of consumers that notice and are attracted to your products.  Increased interest in your products most frequently leads to increased sales. An attractive Merchandising is associated by customers with high product quality and the consumer’s preparedness to pay a premium price for such a product.

 

Unarguably, a correct and efficient Merchandising should yield the following advantages for the seller of retail goods:

  • Radical reduction in costs, by taking advantage of the synergies that the third-party Merchandising Company offers. Effectively, the merchandising costs are shared with many other retail companies.

  • Increased sales from the better presentation and promotion of your goods at the point of sale. An efficient Merchandising stimulates consumers to spend more.

  • Increased sales from elimination of shortages on the retail outlets. The products will be always available, clean and tidy on the shelf and not in the supermarket storage room

  • The products have always the correct price tags and are accompanied with the relevant promotional material.

  • Reduced returns by placing goods with earlier expiration dates at the front of the retail shelf or by transferring goods with nearing expiration dates to outlets with faster movement.

  • Focus on you core business by letting us take care of functions and activities that may divert you from your main effort and core competences!

 

The competition in the in the Cyprus Retail Market is very fierce and intense. The small size of the Cyprus Market forces distributors of FMCG products to find ways to reduce their costs, to increase sales, to eliminate waste, and to become more efficient.

 

Sellers and distributors of FMCG products must find a way to eliminate the disadvantages that result from the characteristics of a small and isolated market.

 

Taking advantage of specialized and well established services, such as Outsourced Merchandising, will help any retail distributor survive and succeed in this highly competitive and difficult business environment.