The Psychology Behind Retail Product Placement
Posted on August 5, 2019
Merchandising a retail space is a fine art. Every product needs to be placed in the correct location so that it looks its best, and sells even better. Retailers around the world have spent a lot of time and energy devoted to thinking about the best locations for different products in a store’s floor plan. Over time, an entirely new subject of study was born – the psychology of retail product placement.
While businesses in every retail industry are concerned with product placement, it is especially crucial for shops that sell fast-moving consumer goods (FMCGs)[i]. These are typically inexpensive and common everyday items that people need to stock up on in large quantities regularly, such as household goods, consumables, and over the counter medications. When it comes to FMCGs, their product placement can make all the difference to their sales numbers. It can truly be the difference between a complete dud and a bestseller.
If you own or manage a retail shop (or even a chain), you need to spend some time thinking about the psychology of retail product placement. Maybe you only have one shop and do most of your business online, like Manchester’s Card Party, or you own a regional chain of grocery stores, like Budgens. No matter what the size of your business, you will benefit from learning about this important aspect of retail management and merchandising.
What Is Product Placement?
The term ‘product placement’ refers to the scientific study of the best places to position a certain product in a retail environment. From the first moment that a customer enters your retail environment, they are experiencing your shop’s ‘planogram[ii].’
A planogram is a model that helps you determine where you should place specific retail products in order to maximise your sales. Your specific planogram will take into consideration factors such as lighting, the size of your store, your best-selling products, and your customer demographics. It is all about influencing your customers to nudge them towards making the decisions you want them to make.
Some of the key factors that will influence your own store’s planogram will likely include the size of your shop floor, your lighting, the width of your aisles, the size of your shelves, and the amount of windows and mirrors in your space. It’s all based on trying to sell that extra 2 (or 50, or 500!) pounds.
Common Tips That Retailers Can Implement To Increase Sales
There are plenty of things that you can you do in your retail environment to improve your product placement and increase your sales.
Put the essentials at the back of the store
You likely already know that the location of your products inside your shop has a big impact on how much they sell. One of the most common examples of product placement is to position the most common best-selling products at the back of your store.
In a grocery store, this can be exemplified by the placement of eggs and milk at the back of a shop. Why? Customers need to traverse the entire space in order to find the basics that they came for in the first place. On the way, they will likely find many other items that they weren’t necessarily planning to buy, but happily add to their carts.
Conversely, you will usually find expendable goods near the entrance to a shop. Tantalising bakery goods, pretty flowers, and electronics will usually be located at the front of the retail space. The customer’s cart is empty, and they will be more tempted to fill their basket with goodies.
Consumers purchase more products when they are at eye level
The products that you want to sell the most should be located at eye level, often called ‘buy level’ for this reason! Customers can see them easily, and are more likely to grab them from the shelf. Similarly, you should place them to the right side of a shelf or display, because most people are right handed and tend to look to that side first[iii]. Put your cheapest and least desirable goods at the bottom shelves, because they are less visible.
One major exception? If you want to catch the eyes of children with sweets and toys, place those down a bit lower so that they ask their parents to add them to the basket.
Impulse buying - put products at the till
You might recognise your own consumer behaviour when you read about impulse buying. After all, who hasn’t grabbed a packet of chewing gum or sweets because they were placed next to the till? Magazines, batteries, chocolate bars, and crisps are all located next to the cash desks, because it is very easy to convince someone to slip a cheap extra into their order at the very last minute.
Put complementary products close together
Have you ever noticed that there are batteries next to electronic goods? Or shoe polish displayed next to the shoe department? Maybe even seen fizzy drinks and juices positioned next to alcoholic spirits? These are all examples of complementary products being placed close together.
Have a think about some complementary products in your own industry. These easy add-ons add a lot of extra revenue to your bottom line, and are an easy sell.
Use larger shopping baskets or carts
Shopping carts were invented in 1937[iv] in Australia, and ever since their introduction they have gradually grown bigger and bigger. Sure, this enlargement was originally designed to help customers get their shopping done, but now it is a conscious retail psychology strategy. When a customer sees that their trolley isn’t full, they will likely feel that they haven’t finished their shopping, and they buy more.
Larger store spacing usually encourages more purchases
Small boutiques and chic shops can do very well in certain industries, including high fashion and organic skincare. However, if you are in the business of selling FMCGs, you should consider expanding your floor space. When people are shopping in a small or crowded space, they are sure to feel frustrated and stressed, and rush through the experience.
However, if they can push their cart easily and leisurely through wide aisles and peruse a plethora of products, they are more likely to spend more time in your store – and spend more money. Everybody wins!
Music can increase sales
Music can really affect your mood, putting you in a good mood, or increasing your stress levels. Most shops and supermarkets play some kind of music, and they would do well to pay attention to their play lists[v]. You should start the day with upbeat tunes, and then move into more mellow music (such as abstract jazz) after 4pm.
Unsure of what to play? Gentle music tends to encourage people to linger for longer, and spend more. Classical music is a great idea, as it is beloved by all kinds of people and helps us to relax.
Take advantage of colour psychology!
Colours are more important than you might think. From your branding, your furnishings, your signage, and even the products you carry, the colours that your customers see will affect their behaviour – and your sales. If you harness the power of colour psychology, you can help to overcome customer objections and improve their perception of your shop.
Here are 3 ways that the psychology of colour[vi] affects how customers experience your retail shop.
Colours help to tell the story of your brand
Looking for ways to set your brand apart from the rest? Colours can increase your brand recognition and help consumers feel good about entering your store. Keep your colour story consistent across all of your signage and branding.
Help customers trust your business
Have you ever noticed that many financial institutions and e-commerce brands use blue as their key colour? Blue, the colour of the sea and the sky, is considered a ‘safe’ and trustworthy colour that can help people to feel calm, collected, and happy about shopping at your store.
Evoke a sense of chicness and luxury
Luxury brands around the world use black as their main colour story, including Ralph Lauren, Mac, and Adidas. That said, while black can seem sophisticated, it can also become a bit depressing when used with too heavy a hand. Don’t veer into morbidity!
While each of the above factors, such as placing a product at eye level or utilising larger shopping carts, might seem inconsequential when considered on their own, when assessed together they form a broader picture. Every detail of your shop, from the lighting to the colour scheme, is affected by the psychology of retail product placement.
By learning about retail psychology you can boost your sales, improve your relationship with your customers, and grow your business.
[i] Fast Moving Consumer Goods
[ii] The Science That Makes Us Spend More in Supermarkets https://theconversation.com/the-science-that-makes-us-spend-more-in-supermarkets-and-feel-good-while-we-do-it-23857
[iii] The Location Effect in Packaging Design
[iv] The Fascinating History of the Shopping Trolley https://www.news.com.au/technology/innovation/inventions/the-fascinating-history-of-the-shopping-trolley/news-story/b93f896b46aa087e1378014f0058ee36
[v] Genres that Increase Sales Inside Stores https://zenmerchandiser.com/music/genres-of-music-that-increase-sales-inside-the-stores/
[vi] Color Psychology