Merchandising is more than the simple optimisation of sales through the appropriate choice and display of products. It is one of the factors that contributes to the client's judgment about the overall services offered by the clinic. Merchandising facilitates the meeting between the customer and the products and services of the clinic.
One can say that merchandising is a component of marketing, but it is also closely related to sales, this is the reason why you can see within a company merchandisers who are specialists that improve the overall productivity of the retail area. Merchandising becomes then a close connection between marketing and sales forces.
Today products need to sell by themselves. It is the world of self-service, of "free-choice", the customer has to find the product, learn about the offer, select one item vs another with little or no assistance. It was the birth of a self-service society that triggered changes in products. The goods need to be self explanatory; the packaging has to be attractive, to be selected, but also to explain its mode of action and its practical use, clearly, simply, in order to motivate the action of purchase by the consumer. A counter or rack of products must be easy to "decode" and to understand. In front of a rack of products the consumer should be able to "read" the displays as the outline of a book, or a catalogue.
The technique of merchandising reflects a scientific approach that starts at the manufacturing level. The producer of a product needs to participate actively in the display of the products and it is through a close collaboration between the producer and the retailer that the various aspects of merchandising are applied efficiently. There are many different steps that include the producer as well as the sales force of the products and then the retailer. These steps should always be conducted with the client's needs and expectations in mind because we live in a society where everyone has to win. The client always remains a paramount part of the equation. The idea is not to sell at any price. Clients are looking for "value" and this is where the merchandising aspects of a product play a role.
Types of merchandising
1. Organisation merchandising: The consumer should be able to easily locate the various products and services that he or she is looking for by presenting a clear and structured offer. This is where access and signals are helpful. The organisation of the rack consists in defining the best place for a family of products, a brand, in other words what do we place at the beginning of the rack, considering the dominating circulation pattern, in the middle, at the end? Which categories of products do we position on top (above the eye level), in the middle, at the bottom?
2. Management merchandising: It is the second and most classical step. This can have two forms:
a. the value or return of the product selection, where one organises the choice and the display according to the results obtained by each product, respecting a minimal threshold of perception and considering the re-ordering rhythm.
b. the study of the optimal selection and implantation of the products that take into account local market, regional specificities, and the overall strategy of the clinic
3. Seduction merchandising: This consists of bringing to the client an additional attraction through proper communication within the display area (banners, posters, etc.). It is the « dressing » of the display, including the use of dedicated attractive displays that would seduce the clients at first sight.
In our model, the retailer is the veterinarian. He or she has the responsibility of defining the selection of products that fits the image, the positioning and the strategy of the clinic and matches the needs of the clients. It is the veterinarian that will choose the ultimate repartition and displaying of the products, but some will benefit from the assistance of experts or consultants that will guide them in their decision. The result of appropriate merchandising will be an increase in client flux within the retail zone, multiplying the possibilities of contact, and therefore of information and seduction towards the action of purchase.
The sale of products by the veterinarian
The sale and merchandising of products will also depend on the strategic positioning of each clinic, which is the veterinarian's decision, and therefore the various retail techniques that can be developed.
Positioning of the clinic: a veterinarian decision
The clinic has a certain profile. Often veterinarians have no control and the different profiles have evolved without any conscious influence from the veterinarians. Obviously it is better to keep a certain level of control and veterinarians can and should be actively involved in such positioning in terms of products, services, prices, etc. This is often determined by the local environment and the so called « retailing zone ». This personal identity of the clinic can directly influence client satisfaction and the level of retention of clients. The clinic is nothing but a certain aspect of the community and the vets should entertain this feature of his premises!
Clinics that have a profile of "general practices" should generally hold a wide selection of products (large width of the line) with small quantities for each (small depth of the line). This is to satisfy large numbers of different clients. A specialty clinic to the contrary, should concentrate on a small selection of specialized products (small width) with large quantities of each (large depth) which correspond to their specialty.
One needs to remember however that companion animal medicine is part of a consumer industry where the sentimental aspects of ownership (human animal bond) play an important role which automatically places the veterinary hospital in an environment of high quality health space for the pet animal. This is one of the reasons the veterinary clinic should not look like a pharmacy, a drug store, or a pet-shop. If such a similarity is perceived by the clients, he or she will consider both places as competitors, which would be detrimental for the veterinary clinic. This is where the principle of differentiation plays its role.
The client profile
This profile can be defined by the type of practice (small animal, mixed practice, equine, etc.), by the socio-professional environment of the clients, or the usual local trends (local market tendencies). Consumer studies tell us that consumers have three major motivations for their purchases : the cost of the product, the security of the product, the matching of the product with their own image. Other motivations are innovation, commodity...
1. Cost: it is essentially the price limitation: "I am going to this clinic because their products and services are cheaper, therefore I will pay less either because I am forced to, or because I manage my budget well".
2. Security: it is today a major concern of consumers: " I am a client in this veterinary hospital because it is the best, I trust the veterinarians"
3. The client's image: this is not a well known motivation but a very strong one for most pet owners. "I am a client in this brand new, modern, expensive clinic, to show myself and my friends that I am part of the elite that uses what's best"
The retail zone
The retail zone is the commercial zone of influence of a sales point, made of clients and competitors. Special marketing studies can help identify the best localisation prior to selecting a place to establish a clinic and the potential income that one can expect. Other than the number of inhabitants in the area, one should look at their average income, the growth of the neighbourhood, the type of families, the lifestyle, the number and type of pets, the nature of the competition. One should also look at the other pet suppliers in that zone, including supermarkets and specialty shops. These aspects are particularly important when one wishes to develop the sales of pet-food.
For a veterinary clinic, it will be useful to identify the various fluxes of people, for example in an area close to a commercial center, it will be helpful to carry products of first necessity (food, litter). In a vacation spot, one should concentrate on small supplies of various items that will fit best clients that are transient in the area. In a urban zone, it will be important to know the clientele well and adapt the selection of products accordingly.
The various types of sales
As we said above, the veterinarian may decide the orientation and the positioning of his clinic and therefore of the products he or she will carry and propose to the clients. This strategic choice has consequences on the sales techniques within the clinic.
Prescription selling: The clients have a passive role, they often don't have access to products. This technique should be preferred for drugs and for specific technical products that require information, documentation and a true prescription from the doctor. In this form of selling the veterinary technicians and receptionists are only involved in the renewal of the prescription. The clients have little to do. The impulse purchases are limited. The production relies highly on the veterinarians who prescribe. It is the model of a specialty referral clinic where merchandising is limited.
Self-service selling: In this case the client has an active role. He or she selects the product, looks at it, touches it, looks at its price and buys it. This is the perfect example for hygiene products, pet accessories, cosmetics, food-treats, etc. The client is free and actively involved in his or her purchases. There is a tendency to use products that he or she knows and that are consumed with satisfaction. New products are often a risk and are usually left on the shelves, unless these are "pushed".
Assisted selling: This is a mix of the first two techniques, this is usually what is appropriate for the veterinary diets and the various anti-external parasite products.
For this method, which is often the best, clients find a strong support from the staff. The merchandising is displayed such that new products are located close to the counter where the staff are in contact with the clients. Products that are self controlled and well known (famous anti-flea products, pet-food) are located in "cold spots". The assisted selling is the best method to keep clients using the clinic for their common purchases simply because personalising the sale and giving additional information to each purchase is adding value to the content of the package. It is what make people come back to the clinic for a product they could find elsewhere.
Merchandising must help clients be comfortable within the retail zone of the clinic. It must be produced so that the client understands the relationship between the products and the clinic. It must be elaborated so that the client uses more and more the services and the products of the clinic. It must also contribute to the confidence and overall satisfaction he or she has developed through the years.