The State of the Industry as Related with Merchandising and Branding

As I write this article, sipping on a coffee at Bo’s Coffee in Makati city, Phillippeans, I sort my thoughts in order to answer the question, “How has merchandising and branding evolved in the coffee industry over the last decade?” It is a much tougher question to answer than it would seem because we have seen quite a few developments within different market segments.

The common contributing factors that impacts behavior in brand management and execution of retail merchandising are typically the size of the company and the company’s unique positioning within the local market. I’ve come to find that selling the highest volume of merchandise is not the sole underlying driver for most retailers.

Many retailers feel that if a customer is going to buy a product from their store that the customer should be out in the marketplace advertising the retailer’s brand. I feel that for even the strongest brands they should broaden their merchandise collections to include designs with lifestyle driven artwork.

The goals of retail merchandising are various. Most retailers simply want to have their logo prominently displayed on each item, standing in perfectly straight rows. Typically, the motivating goals of these programs are simply to uniformly display logoed merchandise in order to enhance the ambiance of the store. Most companies take a static approach when creating merchandise for their brand, leaning solely on the corporate logo to deliver their message to their consumers. This traditional approach summarizes the state of the industry as a whole. But there are some retailers that are starting to shift the trend.

In recent years we have seen many independent coffee retailers change their approach to creating their merchandising program. Rather than starting with the logo, they start with a design. They begin by selecting lifestyle-driven artwork that captures a core element of their customer base, then incorporating elements of their logo into the design. These programs are much more successful than traditional logoed merchandise programs, because retailers focus on what speaks to the customer, rather than starting off with what’s best for the retailer.

Size, structure and style weigh heavily in these decisions. Independent retailers are faced with challenges of budget, space and large custom-run minimums; franchisees are faced with a myriad of challenges ranging from franchise guidelines to rogue franchisees; and large retailers with more than ten locations typically have the most flexibility to create really fantastic comprehensive merchandise assortments that change seasonally. It is my impression that the owners of those chains have the most fun.

Erez Toker, President of Vessel Drinkware