Overview
We understand that fast-moving consumer goods (FMCG) are products consumers frequently use. Due to the speed at which they travel from facility to checkout, food, beverages, personal care, and household items can be challenging to stock, and companies need an FMCG merchandising plan to support their brand strategy.
Due to their short shelf life, these products are in high demand, leading to intense competition in this business. Therefore, FMCG companies must prioritize sales and customer satisfaction to stay ahead of their competition.
Here is where strategic FMCG merchandising comes into play, helping FMCG brands stay ahead of their competitors and build a solid and consistent brand presence.
FMCG merchandising is the data-driven art of product placement and store promotion that help catch the consumer’s attention. However, it is easier said than done because many factors are involved when devising an effective merchandising strategy to support your FMCG marketing and FMCG sales departments.
In this article, we will go through a detailed FMCG merchandising process and learn how to develop an effective strategy to stay ahead of the competition.
How Retail Merchandising Works
As mentioned earlier, retail merchandising presents the products in an eye-catching way to grab the customer’s attention. There are multiple tactics to make it work, ranging from product placement to visual merchandising.
Using these tactics, retailers create an environment that encourages customers to purchase products.
An Effective merchandising strategy starts with a complete understanding of the target customers, their shopping behavior, and their preferences. For this purpose, retailers use data analysis and FMCG market research to gain insights into their customers’ purchasing habits.
Other factors, such as industry trends and seasonal fluctuations, are also considered. After understanding the target customers and market trends, FMCG companies focus on optimizing their store layout and product placement.
In-House Team Management
Your in-house team management’s quality (and quantity) plays a vital role in retail merchandising. In the FMCG industry, the in-house team is responsible for creating, executing, and monitoring merchandising strategies that ensure effective promotion and sale of products.
Well-trained in-house teams also help merchandisers to optimize and maintain retail store compliance. Partner compliance involves confirming that retailers display the products according to the company’s guidelines and correctly implement the promotions.
Compliance with these guidelines, when correctly implemented, is essential for maintaining the brand’s image and maximizing sales. Sales reps are another critical aspect of the FMCG merchandising process. They work directly with retailers to negotiate shelf space, promotional activities, and product placement.
Partnering With A Merchandising Company
Merchandising companies provide expert services that help retailers stay ahead of market trends and generate more sales by keeping stocks full and properly stocked.
One of the key benefits when partnering with merchandising companies is access to their experienced sales team, who know how to engage target customers.
These professionals have a deep understanding of the retail industry and can offer valuable insights into the latest market trends and consumer behavior. They work closely with retailers to provide merchandising solutions tailored to their unique needs and goals.
Merchandising services provided by companies can help the sales team by saving time and reducing efforts. Apart from that, it also helps in making informed decisions about product selection, pricing, and merchandising strategies.
Performing Store Audits
Performing store audits can help not only provide insight into what’s going on within the store but it also provides an opportunity to engage with store personnel. With the help of store audits, companies can ensure that their products are being displayed and promoted in an attractive way for shoppers to drive sales.
Conduct Market Research
Companies must conduct detailed FMCG market research before developing a merchandising strategy, including the store audit. During this research, brand analysts collect market trends and store layout datasets. Apart from that, competitor strategies are also studied thoroughly during market research.
This collected dataset helps companies to determine the best assortment of products to offer, which brands to promote, and how to position their products in the market.
After the development of the merchandising strategy, specialists carry out store audits to verify its correct implementation. Through store audits, FMCG representatives assess the store layout to determine if the retailers display the products in prominent locations.
For example, there might be a high demand for specific products in a particular season that we must display in the front of the store. Central location comes at a cost, so consider this part of your FMCG brand strategy.
Also read: Learn the difference between CPG and FMCG and their marketing strategies.
The Challenges FMCG Brands Face
While running a successful business, companies face many challenges as they navigate the constantly evolving FMCG retail landscape. Here are some of the common challenges:
Limited Shelf Space
In FMCG, shelf space isn’t just real estate, it’s revenue potential. Effective product placement can make or break the visibility of your FMCG products, influencing what customers notice, engage with, and ultimately purchase.
But when the number of SKUs outpaces available display space, retailers are forced to make hard choices. That’s where an effective merchandising strategy comes into play. Prioritizing high-performing products ensures that limited space drives maximum returns. It’s about aligning merchandising with sales data and optimizing for impact, not just presence.
This challenge also underscores the importance of collaboration across the supply chain. Intelligent consumer engagement begins long before a shopper reaches the aisle—and shelf execution is where strategy meets real-world performance.
When space is tight, every product shown must earn its place. And with the right insights, even a limited shelf can deliver outsized results.
Stock Rotation and Management
Besides the limited shelf space, stock rotation, and management are other significant challenges for many FMCG companies.
FMCG brands must ensure that their products are properly rotated and managed in stores to minimize waste and increase sales.
Although it may appear simple, the successful execution of this task demands seamless collaboration with retailers and a robust inventory management system.
Retailer Compliance
FMCG companies must follow the rules and regulations set by retailers to sell their products. These rules and regulations may include adhering to the packaging requirements, ensuring product availability, and maintaining pricing consistency. Not following these rules can lead to delisting, costing you your precious time, revenues, and resources to correct the problem.
At times, following specific rules can pose a challenge. An instance of this could be when the cost of procuring raw materials for production unexpectedly increases due to an economic downturn.
Companies may also face logistical issues such as delayed delivery due to route blockage. Retailers may have multiple FMCG brands competing for shelf space and consumer attention. When you are out of stock for logistical reasons, it opens the door for your competitive neighbors to come in and steal your loyal consumers. It’s critical that your 3pl or internal fulfillment department use a route optimization tool in order to prevent route blockages from occurring in the first place.
Brands that can’t meet retailer compliance requirements risk losing out to competitors who can, which can result in lost sales and market share.
Consumer Demand Forecasting
Another major challenge that most new and established businesses face within the FMCG sector is forecasting consumer demand.
Although modern techniques like artificial intelligence and machine learning can assist in making somewhat accurate predictions, traditional methods are ineffective.
It is because multiple variables are involved, such as changing consumer preferences over time. For example, a sudden trend in a particular product category can result in a surge in demand. Furthermore, consumer demand forecasting can also help optimize your FMCG pricing strategy.
Technological Advancements
Abrupt technological advancements can also be a challenge for the FMCG retail market. It is because it changes consumer behavior rapidly.
Thus, an FMCG brand development company must keep up with the latest FMCG trends and find innovative methods to engage with consumers.
The FMCG brand strategy company needs to be agile and adaptable in its approach to branding to stay relevant and practical in a rapidly changing landscape.
Moreover, technology can also lead to an oversaturation of products in the market. It leads to increased competition, and brands must develop innovative strategies to stay ahead.
FMCG Merchandising Strategies
Intelligent and reliable FMCG merchandising strategies can skyrocket sales. However, developing and executing a successful merchandising strategy can take time for many people.
Let’s look at some critical factors in creating a successful merchandising strategy for increased profitability.
Corporate Block
Corporate block means the company’s specific merchandising strategies to optimize product placement and maximize sales within the retail store environment.
The corporate block involves product grouping and bundling for the same company or a brand in a designated area inside the store. For example, you might have seen a section dedicated to “Red Bull” or any other drink inside a supermarket.
Product grouping is done based on various factors. It includes product category, brand affiliation, and, most importantly, promotional campaigns. Corporate blocks allow companies to attract more consumers, increase brand visibility, and ultimately drive more sales.
Besides that, here are some key aspects and benefits of incorporating a corporate block in FMCG merchandising strategies:
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- Brand cohesion
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- Cross-selling
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- Enhanced shopper experience
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- Promotional impact
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- Retailer Collaboration
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- Data and insights
Multiple Touchpoints
Multiple touchpoints mean utilizing various channels and locations to engage with consumers and promote products. It helps FMCG companies to gain more reach and generate more sales.
Besides that, these multiple touchpoints are the key to interacting with the consumer and learning more about them.
Regarding FMCG merchandising, there are three main touchpoints: point-of-sale displays, displays, and promotions.
Point of Sale Displays: The strategic placement of products within the retail environment. Usually, point-of-sale displays are near retail counters where products are displayed attractively to generate that last-minute sale. For instance, retailers usually place chocolates, chewing gums, and cigarette packs near counters.
Displays: Displays play an essential role in FMCG merchandising. Companies can engage more customers by simply appealingly showcasing products. These displays can be in various forms, from end caps and aisle displays to freestanding units strategically placed throughout the store.
Promotions: Running a successful Company means relying heavily on FMCG advertisements. It can aid in acquiring customers and establishing lasting brand recognition. Partnering with a trustworthy FMCG packaging design company can handle up to 50% of the promotion and branding aspect.
Cross Merchandising
Cross merchandising is a retail strategy that an FMCG brand development company usually implements when building brand awareness. It is the display of complementary products together.
Cross merchandising can help increase overall sales instead of just a single product line. It is because, in this technique, products from different FMCG categories are usually grouped together and placed near each other.
An excellent example of cross-merchandising is the display of salsa near tortilla chips or batteries near electronic devices.
Ecommerce Merchandising
Online shopping isn’t just about convenience anymore, it’s become the default. Consumers now use ecommerce platforms for everything from apparel to everyday essentials like groceries. This shift has redefined the role of the FMCG merchandiser and raised the stakes for merchandising FMCG products in digital environments.
The pandemic only accelerated this behavior. Post-COVID, the pressure is on FMCG merchandising companies to deliver seamless, consumer-first experiences across every digital touchpoint. Retailers operating in omnichannel ecosystems must rethink how products show up online because visibility, usability, and availability directly impact sales velocity, which has further increased the importance of ecommerce in the FMCG sector.
That’s where smart CPG merchandising strategy comes in. Beyond aesthetics, it’s about performance, real-time data, optimized product listings, and tight inventory control. Whether you’re managing a large FMCG store or partnering with the best retail merchandising companies, getting ecommerce proper means preventing stockouts without tipping into overstock.
The most effective brand merchandising companies understand this balance. They know that digital shelf presence can make or break a sale—and that winning online means more than having a good-looking pack. It means translating your brand strategy into a consumer journey that converts.
Merchandising Reports
For any FMCG brand strategy company, merchandising reports aren’t just data; they’re a playbook for more brilliant retail execution. These insights offer a continuous feedback loop, helping brands and merchandisers fine-tune every aspect of their merchandising efforts to meet evolving consumer needs.
Leveraging tools like analytics and eye-tracking technology, brands can uncover how shoppers interact with thematic displays, product shelving, and in-store messaging. This level of retail intelligence goes beyond assumptions; it tells you exactly where your product visibility wins and where it falls flat.
Understanding shopper attention is only the beginning. These reports drive action. From optimizing shelf management and enhancing customer experience to realigning product assortments and adjusting store layouts, every insight is an opportunity to perform better.
Ultimately, the goal is optimized execution, ensuring that what consumers see, how they engage, and what they buy align with your strategic objectives. By consistently reviewing merchandising reports and acting on what the data reveals, brands can sharpen their competitive edge and turn insight into increased sales velocity.
Data-Driven Brand Development
Want a best-selling brand? SmashBrand is a brand development agency for FMCG and CPG companies. From brand strategy to packaging design testing, our Path To Performance™ process guarantees a retail performance lift. Book a time to discuss your project with our team.
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A seasoned veteran in the CPG (Consumer Packaged Goods) industry, Jason Vaught brings a wealth of knowledge and hands-on experience as the director of content and marketing for SmashBrand. His comprehensive role at the forefront of brand communication ensures that CPG brands remain well-informed about the suite of services SmashBrand offers. Furthermore, his insights derived from the company's strategy, design, and testing services are invaluable to brand owners and managers seeking expert guidance.
From his early endeavors in launching a successful sports nutrition brand that gained prominence in significant bodybuilding and fitness retail spaces to his entrepreneurial ventures in kick-starting multiple brick-and-mortar and e-commerce startups across diverse industries, Jason's career is studded with substantial milestones. Notably, he has innovated numerous products later embraced by leading industry brands, showcasing his knack for anticipating market demands and setting trends.
Jason's journey in the CPG industry commenced at age 21. Over the years, he has worn multiple hats, ranging from a manufacturer and retailer to a distributor and brand owner. This multifaceted experience equips him with the rare ability to offer practical advice grounded in real-world expertise. His mission is to guide and support other CPG brand owners, directors, and managers on their path to success.
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