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Merchandising, Moving Product, and Maximizing Space-to-Sales 

This module discusses market customers and how to increase engagement and spend in your markets. In today’s information datamining climate, customers expect you to know them and their last 10 purchases. They expect you to anticipate their presence in your market, make them feel at home, and expect you to anticipate what they will purchase next. 

Datamining works both ways. When you personalize customer interactions, give customers what they want and what they expect, they will respond by engaging their social media network. 

Workforce Statistics 

As Millennials enter the corporate workforce, this population will largely influence the future success of the micro market industry. According to Dept of Labor, by 2025 Millennials will make up the majority of the global workforce. 

So, when getting to know your customers, it is important that you focus on this group, and monitor their needs or wants. NAMA conducted a study on millennials and their perceptions of vending, office coffee service, and micro markets. 

Implementing Demographic Study Findings 

Focus on consumer trends and demands, as they will continue to shape the breakroom evolution. The same NAMA Millennial study captured the following feedback and ideas: 

Figure 1: NAMA Study Finding Ideas 

All these ideas incorporate what Millennials identify as important; convenience and awareness about what they put in their bodies, or at least what they identify as “healthy.”

Merchandising 

An effective way to increase consumer spend is to provide what they want in the market, when they want it, and at the levels for which the demand is calling

Unit Sales Shares: What Consumers Buy 

Use the following insights found during a sampling of 220 markets in the Northwest region, to help determine what consumers are buying. Yes, regional preferences vary, but the concepts still apply. 

Understand what the data is telling you about markets today. Consider obvious market trends that you may not yet be implementing in your markets. As you consider merchandising and determining what product goes in a market, it is also important to look at space to sales, or how much space in your market you are allocating to which product. You should base the amount of a given category in your market on the sales volume 

of that category. Look at the following graph of sample data: 

• Total unit sales = 1,386,515 
• Total dollar sales = $2,355,168 
• 1 out of 6 units purchased is a food item 

The graph is organized into six very general categories, which will be broken down further, later. The fact that every sixth item purchased is a food item, illustrates why fresh food is so important and the importance of offering a variety of fresh food options in your markets. 

Food, cold drinks, and snacks represent 93% of micro market unit sales and 92% of dollar sales. Compared units sold to the dollar sales share. While food makes up 16% of the units sold it makes up 26% of the dollar sales that occur, which is a result of the higher pricing you can charge in markets. 

Beverage breakdown into smaller categories: If we take a closer look at the cold drink category, we are seeing that 20oz soda accounts for 28% of unit sales share, but it accounts for less of the dollars sold at 26%. These are two surprising results; milk and dairy, which is commonly a category you don’t sell in vending, makes up for 22% of the unit sales. However, energy drinks account for 18% of unit sales, but 34% of dollars. These are high priced items and you should have these in all your markets. It's a common theory to only carry Monster or Red Bull, but it's a good idea to offer a larger variety to the consumer in popular categories that you want to capture. 

Food category breakdown: Take a closer look at the fresh food category of unit sales, and you can see that the biggest percentage is sandwiches at 21% but grows to 34% of the dollars sold. the following graph breaks down fresh food category. Notice side items. This includes hard boiled eggs, string cheese, small potato salads, macaroni salad, etc. It is the #1 category in units and is the second highest in dollars. Don’t ignore the breakfast category. It's a good idea to expand in breakfast, as you want to be the one-stop shop for their morning breakfast and their lunch/afternoon snack. 

Snacks category breakdown: Finally, take a closer look at snacks. You are going to see less obvious leaders in this segment, which shows that consumers are buying a variety of items. They want choice and variety and they are purchasing across the board when it comes to snacks. 

Surprisingly enough healthy makes the top three of units sold, and second in dollars sold. It is probable that this category will continue to rise as more millennials make up the workforce. 

Also, notice meat snacks; there are always trends in “healthy” buzzwords. "Protein" is the latest trend in what companies like Jack Links and other manufacturers are seeing. So, expect the meat snacks category to continue to hold a strong position. 

Product Placement 

Where you place a product can sometimes change a “good” performer to a “great” performer. When you first look at a market, your favorite snack isn’t the only thing that should be catching your attention. How items are placed plays a big role in what sells in your market. Before taking a closer look at product placement, let’s look at the following figure. 

Figure 11: Product placement 

In the previous illustration, you can see the following: 

• Salads are at eye-level. 
• Use color break to have different colors next to each other (for example, Mt Dew). Look how a Mt Dew Code Red separates the diet and regular Mt Dew, which are both green. For example, you would do blue, tan, blue, red, blue versus grouping all the blue products together. 
• Ice cream should be at the bottom of the freezer, because you want the consumers to see the higher priced items first, as well as the healthier items shown in the market. 
• All gluten free (GF) items are near each other, making the GF category easily identifiable for people who are seeking out those items. Use labeling to promote sale items, gluten free items, and promotions. Doing so, catches the consumer's eye. 

• Candy is also on the bottom shelf in the snack section. 
• Place the fruit options in a basket near the kiosk for easy access and visibility to the client. 
• Typically, you want glass bottles on the bottom, to avoid potential breakage, if dropped. 

Planograms  

AMS has an integrated Planogram feature. Use planograms to help you pre-plan new markets, control your product placements, and evaluate space-to sales on a shelf and slot level. Planograms can also be viewed at the kiosk by your drivers giving them the ability to look up the planogram to ensure 100% correct merchandising. 

• Operators will be able to create a planogram for each “container” in each market 
• Products can be selected from their global product list 
• As shelves and rows are populated, each tile will present the 
• MIN/MAX 
• Total Inventory Count 
• Scan code/UPC code 
• Each row can be edited and changed 

The following is an example of the planogram feature in AMS. 

 
Figure 12: Product placement 

It is recommended that you have an updated, standard planogram with the current products you are supplying in a market. Having a standard planogram will help new installers or service techs make a market look clean and organized regardless of familiarity with the market. 

Dry Goods Planogram 

The following diagram illustrates a basic dry goods/snack section lay out: 

Figure 13: Dry Goods Market Layout 

Start at the top with the hanging products—these items have packaging with a hole that can be placed on hooks. Make sure these items are similar. Sometimes if you don’t have space for an item with a hole, and it does not match any other items that are hanging, you can put it on the shelf. 

1. Next shelf place standing products—like the hanging products, you can place these items in other places such as baskets. However, do not place items like chips or candy on this shelf. Use this shelf specifically for items with a box shape or self-standing packing. 

1. Next three shelves place popular chips on the right side—and the healthier, but popular chips on the right as well. The higher the shelf (at eye level) you use, the more you want the customer to purchase those items (use for higher priced items). 

1. Use the next shelf down for misc. items—including, cookies, healthy bars, and snacks that people buy but not often enough to use a higher shelf. 

1. Near the bottom on the flat shelves, place candy—since these items are lower priced and you don’t want this to be the first thing the customer sees when they enter the market. 
2. In the baskets on the right of the kiosk—place all impulse items for the customer to easily identify what they are, and can purchase last minute, before leaving the market. 

Coolers Planogram     

Use the following diagram to help plan your cooler layout. 

Figure 14: Cooler Market Layout 

1. Locate all Premium items towards the top shelf—Energy drinks are perfect. They are high margin & high-volume beverages. 
   
   
2. On the right side of the beverage cooler—following Energy, place all CSD (Carbonated Soft Drinks. 
   
   
3. On the left side of the beverage cooler—following Energy, place all the Premium products, Waters, Coffees, and Iced Teas.  

Freezer Planogram 

Use the following diagram to help plan your market freezer layout. 

Figure 15: Freezer Market Layout 

1. Start at eye level—and place entrees and meals. Locate all healthier choice on the top-shelf. Then place additional entrees just below, since these are typically higher priced and more of a meal than a snack. 
   
   
2. Then use the typical frozen section layout at most grocery stores—burgers, burritos, Hot Pockets, pizza, and so forth. These items are usually meant for a younger population, because they are so used to eating these foods and they have a low price point (another reason you place them on lower shelves). 
   
   
3. On the bottom shelves place all ice cream—as you will NOT see much sales in this area until the Summer months; however, everyone has their cold cravings occasionally, so it is important to always have available. 

Remember, freezers are easy to customize. Just make sure to place healthy, higher priced items at the top (eye-level), and the not so healthy or lower-priced items below. 

1. Evaluating Product Mix 

Evaluating your current product mix at a location, involves understanding product performance and current space allocation in your markets. Use the following reports that will help you achieve this: 

• Product Sales Report—Quickly identify top performers and areas of improvement. 
• Product Activity Report—Evaluate product performance by analyzing not only sales, but which products were staled, relocated, and at how many locations. This kind of data can help you, for example, make menu changes for the next quarter. 
• Unsold Products Report—Identifies products still on hand, nearing expiration, so you can decide what to do with them.

Product Sales Report 

This report will quickly identify your top selling products, so you can carry them in all your markets. 

1. Sort the report data by category to ensure no gaps. 
   
   
2. Then run this report monthly on all markets. 
   
   
3. Evaluate by category, by selecting one or two categories to focus on each month. 
   1. Match up product level sales to your planograms. 
      
   2. Determine the space allocation is accurate using these two factors: 
      - Category 
      - Specific Product 
      
      
4. Evaluate top performing products across all markets, and make monthly recommendations. 
   
   
5. Ensure that those products are in all your markets. 
   
   
6. Evaluate categories quarterly by selecting one to five categories for review. 
   
   
7. Compare data against sold, staled, and the number of locations to which the product is currently extended. This analysis enables you to make informed product changes or removals based on level of performance. 

Understanding this information helps you allocate space to sales properly. 

Table 1: Product Sales Report Data 

Ranking by Category 

Take a closer look at the 20oz CSD category: 

Table 2: Product Sales Report Data for 20oz Beverage Category 

• Coca Cola Classic 20oz bottles sold 197 units and accounts for four rows in the cooler 
• Mello Yello 20oz bottles sold 3 units and accounts for two rows in the cooler 

This report data enables you to discuss with the client new space to sales options and propose reducing Mello Yello 20oz bottles to one row, while adding an additional row for a top-performing or better performing item. 

In the following figure, you can see another example of Product Sales report data identifying the top 20 products out of 230 markets: 

Product Activity Report 

To make menu changes, you need to know what is working well and what isn’t working in your markets. The Product Activity report can help you identify this information. 

For example, the following data is from one month of product activity across the entire organization. In the following table the data highlights all Grandmas cookies products. Take a closer look at the flavors, as you can assume that not all flavors are equal performers and perhaps some flavors need removing. 

Table 3: One Month of Product Activity Report Data 

Notice oatmeal raisin is currently at 171 locations (almost as much as the peanut butter) and most units were staled. This flavor also sells at a ratio of half that pf peanut butter. It may be a low-performer at some locations, so you should then evaluate this flavor by location. 

Unsold Product Report 

You can run the Unsold Product report for each location, which you should evaluate monthly or quarterly. This report identifies unsold products still on hand, so you can decide what to do with them. 

Table 4: Unsold Product Report Data 

Utilizing coupons or promotions for these unsold items can help you recover costs or even turn a profit. 

Ideas for Unsold Items 

• Opportunity to discount/sale these unsold items in the market, enabling room for new products. 
• Re-deploy slow moving products into other markets with higher customer volume to either sell through or discount in an identified “clearance” section. 
• Discuss with the client some subsidy solutions to reduce the cost to employees and in turn to see if unsold products sell through. 

To make menu changes 

1. Run this Product Activity report for the fresh food category minimally every quarter across your entire organization. 
   
   
2. Pivot the table to capture the following columns headers about your products: 
   1. Sum of QTY Sold 
   2. Sum of Stale 
   3. Count of Location 
   4. Added in QTY per Location
      
      
      
3. Remember that it is critical to have the right products associated with the correct categories. This report helps identify obvious low performers in your organization that you may want to remove from your product mix. This report also helps evaluate menu rotation for the next quarter. 
   
   
4. Before you remove products, you can still make a profit or cover your costs by utilizing discounts or special price zones for those low-performing products. 

Market Resets 

It is recommended that you update décor, graphics, etc. in your markets semi-annually. Over time items get misplaced or an item that doesn’t sell well has too many facings. The market may be producing good numbers or there is product that isn’t moving. Any of these you can consider a catalyst for a market reset. 

Use your merchandising data to place the right product in the right place. Use your data to find the right mix of products, such as healthy and gluten-free, as well as indulgent items. You must focus on ways to get the most out of the markets you operate, and effective merchandising can help do that. 

It is a good idea that EVERY six to nine months you follow up all market resets with a “MUAD” Market User Appreciation Day, like a Grand Opening event, where you set up samples, encourage account 

registrations, load the app onto customer devices, give away prizes, annually introduce new market features, and other similar promotional techniques. 

Pushers

Why should you use digital signage, promotional contests, regional/national brand promotions, and other product pushers? 

Know your customer and pay attention to local, regional and national product trends and promotions. Leverage planograms to ensure product is placed in correct locations within a market, making it easier for your drivers. Utilize reports that can help you allocate the proper amount of space to a given product or category. Don’t install and forget about it – always consider market refreshes and market resets. 

Keep it exciting for your client and consumers.