FMI2012: Collaboration Drives Merchandising Success

DALLAS — Innovative merchandising created through collaboration among retailers and suppliers requires careful planning and dedication, but it can be a powerful driver of incremental sales if executed properly, according to presenters at an FMI2012 session here on Wednesday.

“Pricing is not a strategy to grow your business long-term,” said Thom Blischok, chief retail strategist at Booz & Co., who led a panel discussion called “Trading Partner Success Stories: In-Store Innovation and Execution.”

“Merchandising innovation is the most significant thing you can do to change the in-store experience,” he said. “And if you don’t do it, your competitors will.”

Don Fitzgerald, senior vice president of merchandising at Roundy’s, Milwaukee, described a partnership with The Clorox Co. that leveraged the expertise and authority of the chain’s pharmacists to drive sales of preventative-care products. The merchandising program, which incorporated Clorox-brand disinfectant wipes with OTCs and other items, required "breaking down silos" within the Roundy's organization, but was effective in driving incremental sales in the categories of products involved, he said.

Similarly, a merchandising partnership between Cincinnati-based Kroger Co. and Coca-Cola’s Vitamin Water products played well into Kroger’s “customer first” approach, explained Larry Nelson, director of DSD sales planning at the chain.

The comprehensive merchandising program, which is ongoing, involves tie-ins with performer Carrie Underwood and a web-based effort that ties into the in-store displays. It helped increase penetration of Vitamin Water by 26.5% at Kroger in 2011, according to Wade Duke, president of the Kroger account team at Coca-Cola Refreshments.

The effort involves displays in the Nature’s Market sections of Kroger stores and includes educational efforts about the importance of hydration.