Richard Gottlieb

Services You Can Use: Third Party Merchandising
April 22, 2008

As I talk with toy companies (particularly those who are new to our industry) I find that they are frequently unaware of the many third party providers whose services they can call on to generate more sales and expand their markets. In order to provide information on these services, I have decided to do a regular blog feature that will focus on these services by interviewing those who provide them.

This week looks at third party merchandising. I spoke with John Fermann, Vice President Business Development for Spar Marketing. (Please note: There are other companies that provide third party merchandising. You can find a source for these by clicking on the links at the bottom of the blog.)

RICHARD:    What is third party merchandising?

JOHN:           A third party merchandising company provides the arms, legs and eyes that a manufacturer needs to accomplish a wide array of in store services. Third party companies send in Merchandisers who are experienced in working with the stores to accomplish their program’s objectives.   The tasks can range from building displays and placing signage, shelf resets or new item cut in, brand maintenance including inventory service or order writing all of the way to return service after the holidays.

RICHARD:    What are typical costs associated with these programs

JOHN:           Costs for any program are based on the time spent in a store as well as getting to a store as well as the degree of difficulty of the tasks. These tasks can range from general brand continuity programs to using power tools to assemble new display fixtures.

RICHARD:    Who can benefit from third party in-store merchandising support?

JOHN:          There are numerous manufacturers who rely on the large chain stores to execute their in-store initiatives. This can range from new item cut-ins (definition: when space is made on a shelf for a new item), seasonal resets, and building end caps to keeping shelves filled during the peak seasons. Many times a client’s priorities are not the same as a store’s priorities. With Spar the only focus is on in-store merchandising. As a result we can execute better and more quickly than store associates because we do not have all of the other responsibilities. In short not only do the manufacturers benefit from merchandising service but the retailers do also and in the end so do the customers

RICHARD:    How can I know what is happening at the stores as a result of third party service?

JOHN:           At Spar, a manufacturer works with a program manager to outline the program’s objectives. A series of questions are then set up for the Merchandising Specialists to answer after completing the store call. The answer to these questions is available “real time” on our internet reporting and is available to our clients.  This information provides visibility to what is happening at store level and immediately alerts our clients if there are any issues. 

These Questions can range from “Was the end cap set up”, “how many units are on the shelf”, “how many cases were pulled from the back room” to “how many units are left in the store”. The Merchandising Specialists can also leave behind a suggested order sheet that indicates an order should be placed on the manufacturer’s items because they are running low.

RICHARD:    How many people do you have that can do this type of merchandising?

JOHN:           We deploy over 4,500 Merchandising Specialists in the 50 states with the capability to perform the required work for our clients. 

Worldwide we have in excess of 8,500 merchandisers

RICHARD:  What areas of the country do you cover? Are there any areas that you do not cover?

JOHN:           We provide coverage in all 50 states, Puerto Rico, Virgin Islands and Guam. We cover all areas of the United States.  Our global presence includes Canada, China, Hong Kong, Japan, Australia, New Zealand, South Africa, India, Turkey, Romania and Lithuania.

RICHARD:  Can you do this in Canada?

JOHN:           Yes, we also cover all areas in Canada.

RICHARD:    What are your requirements when a person goes to a job? Are there a minimum number of hours per visit?

JOHN:            We will spend the amount of time needed to complete a project. For our clients this can vary from store to store based on size and needs. It also can change from cycle to cycle, again depending upon the needs for the programs scheduled for the visits.

We will work as consultants with our clients to design a service program that will achieve their goals and provides the maximum ROI.

RICHARD:    Can you please give me some background on Spar Group?

JOHN:            Spar Group has been providing retail related services and solutions for over 40 years. We are a global supplier of in-store merchandising and marketing services, operating in U.S., Canada, Japan, China, India, Australia, New Zealand, South Africa, Turkey, Romania and Lithuania. 

RICHARD:    What services do you typically provide?

JOHN:           We offer a complete array of Retail Merchandising services including; category resets and plan-o-gram updates, new item cut- ins, display set-ups, fixture, rack and POP (definition: point of purchase materials like signs and banners) installations, removal of discontinued items, placement of labels, placement of signage, end cap building, and auditing of store conditions.  Ongoing programs can include shelf planogram maintenance, inventory assessment, order generation, new item cut in, damage removal and returns.

All of the tasks and data go through our internet reporting system and is available “real time’ to our clients for them to take the immediate action that is required.

RICHARD:    What are the advantages of using a third party Retail Merchandising company?

JOHN:           There are definitely advantages in outsourcing retail merchandising. One of the biggest advantages is speed. With all of the new introductions and new items added to store shelves every week, it is imperative that they are available for sale as soon as they arrive at the store. As an example, we are able to get new items on the shelf and selling three weeks faster than most retailers are able to accomplish on their own. In the world of new item introductions, three weeks is a lifetime.

RICHARD:    What are some of the other advantages?

JOHN:           At our core, Spar is a merchandising company. With that as our base, we have built technology that helps manage the entire process, provides instant information on in-store tasks and even allows our clients to see in real-time 24/7 the status and completion information on all of their initiatives. This technology aligned with coverage in all 50 states, and an experienced Field Management Team allows thorough, rapid and high quality in-store completions, providing our clients the maximum ROI.

There are a number of other third party merchandising organizations. To find more go to the National Association of Retail Marketing Services website: http://www.narms.com/

Posted by Richard Gottlieb on April 22, 2008 | Comments (0)