Retail merchandising starts on the receiving dock and ends at the cash register. Each activity and task in between focuses on moving merchandise from warehouse shelves into customer’s hands. While retail businesses usually pay close attention to merchandising activities, fewer pay close enough attention to merchandising controls, according to an online column by Linda Carter of The Retail Management Advisors. This often results in merchandising control weaknesses that affect product availability, customer satisfaction and profitability goals.
Inventory controls are vital to running a secure and efficient warehouse. Weaknesses in this area make it difficult to manage merchandise quality, availability and costs. These weaknesses include failing to separate receiving, merchandise inspection and defective merchandise return duties; allowing unrestricted access to high-value inventory items; and implementing a system that doesn’t include the right checks and balances, such as procedures for storing, picking and sending merchandise to the sales floor. The negative results can include frequent stock-outs, increased inventory costs and increased labor costs as employees spend time searching for nonexistent inventory.
Retail stores that stock perishable merchandise are especially susceptible to weak merchandise controls, as weak controls increase inventory loss due to spoilage and out-of-date merchandise. Weaknesses include failure to check sell-by or freshness dates and failure to rotate perishable items. They also include creating overly large store displays that include more perishable items than the store can sell. Failing to assign daily store walk-through, merchandise inspection and stock rotation duties to specific employees -- and thus establish a chain of accountability -- further weakens merchandising controls.
Sales Floor Merchandising
Weak merchandising controls can increase instances of customer and employee-related shoplifting and fraud. For example, allowing specialty merchandise displays to create blind spots on the sales floor can make it more difficult to spot missing or hidden merchandise. So can failing to employ loss prevention personnel or train sales floor employees in loss prevention procedures, or failing to make sales floor employees responsible for keeping both floor and counter displays neat and orderly.
Store display construction methods, floor maintenance requirements and untrained employees can create an unsafe shopping environment. For example, weak standard operating procedures that do not require double-checking to make sure signs, end caps and displays are secure decreases customer safety. In the same way, cluttered aisles and loosely placed top stock merchandise create additional safety hazards. In addition, allowing untrained employees to conduct product demonstrations -- especially when it involves power equipment or merchandise containing chemicals -- can put customers at risk.