“Merchandising, while often neglected, is the single biggest differentiator of highly successful smart fridge operators. A well-merchandised fridge will yield tens of thousands of dollars in additional revenue over the life of a smart fridge.”
-Nathan Downs, FoodSpot CEO
Other than location, merchandising is the single biggest factor in smart fridge profitability. Successful operators constantly improve their merchandising over time.
How to Think About Merchandising
Imagine you're on a shopping trip to Target. From the parking lot, you see the iconic red sign calling you into the store. When you walk in, the interior is well-lit and clean, and the signage orients you quickly to the store’s layout. As you approach the women’s section you see full shelves with neatly folded shirts and jeans. The labels give you instant information about the products and prices. This is merchandising at its best.
It’s a scientific fact that humans spend more money when comfortable and confident throughout the buying process. Commonly, our clients will increase their sales from 10-30% overnight by performing a makeover that follows the Merchandising Best Practices discussed in this lesson.
Merchandising Best Practices
To illustrate best practices, we will use a Microstore that is operated by a rural hospital in the Midwest, but all operators can learn from these principles.
Shelf Reference: The top shelf is shelf 1. The bottom shelf is shelf 6.
Find the right balance between fresh and shelf-stable products: In this fridge, the right balance is about 30% shelf-stable products (drinks and cracker packs on shelves 1 and 3) and 70% fresh products (soups, salads, and sandwiches on shelves 2, 4,5, and 6). Starting with this ratio of 30% shelf stable and 70% fresh is good for learning what works and gives your customers the impression that they can get fresh food from your fridge. Do not fear waste in your first few weeks. Give customers time to develop new habits. After 3 weeks you can scale back your fresh offering and make other obvious changes if necessary.
Give them what they want: What product(s) would make you come to this fridge 2-3x per week? You can send out an online survey via email or have your community request products by scanning the QR code on the fridge. A ritual product like Starbucks Frappuccino or Red Mill Oatmeal will drive frequency and impulse purchases. Microwaveable meals add a sense of heartiness and are a strong recommendation. This particular operator serves both white-collar and blue-collar workers in the building, so they stocked the fridge with more premium salads (shelf 5) and value salads (shelf 6).
Cover all meal periods: The fridge is stocked with products appropriate for breakfast (yogurt, milk, orange juice), and lunch/dinner (salads, soups, and sandwiches). You may want to include dessert or other impulse options. Theme each shelf by meal period - breakfast, lunch, dinner, snacks, drinks, etc.
Group by shelf: Shelves are clearly grouped by drinks (1), breakfast/snacks (2–3), sandwiches (4), and salads (5–6), making the fridge easy to navigate. Because drinks have familiar branding, keep them on the top shelf behind the green "Swipe, Grab, & Go" sticker.
Keep it neat: products are neatly placed with a small space between each row. Metal row dividers (included in your merchandising kit) are used where appropriate (shelf 3).
Keep it full: Each shelf is stocked and full of products. After right-sizing the amount of fresh food, max out shelves with shelf-stable products.
Make your food visible: Products that can be propped up at an angle are done so to showcase the colors and freshness. Product labels face outward.
Use shelf clips (not pictured): Use the provided shelf clips to communicate the product name and price. Shelf clips are included in your merchandising kit, and labels can be easily produced and printed with this template.
New Items: Regularly introduce new items that are similar to your top sellers to add variety.
Merchandising Activity
The earlier you can begin creating the initial merchandising strategy, the better.
Tape out a 24" x 26" area on a table—this is the size of a FoodSpot shelf.
Place potential products you will stock on a given shelf in this area. This will give you an idea of how many items you can fit across a shelf and how many items deep you can stock. Once you find the optimal placement, take a photo and label it (Shelf 1). Do this for all six shelves. If you have bought a fleet of smart fridges, label your photos by location and shelf (i.e. Athletics Center fridge, shelf 1).
We highly recommend you consult with our team about your merchandising strategy. Feel free to send your plan (with pictures!) to [email protected] or schedule a merchandising strategy call.
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