Differences: Merchandising in SCM and SCMluxe

A walk through a big box store or even a high street department store shows up neatly organized products displayed with prices indicated in bold stand out fonts. Clear signage with regard to prices is seen as absolutely imperative in merchandising in traditional SCM for products that a Walmart or a Waitrose would sell. However in the case of luxury products this is very different, products are far and few interspersed with design elements (that are not for sale!) and signage for price of products is very unobtrusive if not invisible. These differences are vital for luxury products where the product and its innate qualities are being sold vis a vis its cost and functional value. Let us look at some of the differences in SCM and SCMluxe in merchandising and distribution

Characteristic	SCM	SCMluxe
Visual Merchandising	Not as important as ensuring easy and efficient access to the products and flow around the store	Extremely important and significant investment is made in store design/window display and location of store.
Distribution	Long distribution chain with wholesalers, distributors, retailers and other channel partners (online sales etc)	Usually exclusive distribution channels if not own brand stores. Internet is not used for sales but mainly for communication purposes only
Customer focus	Not personalized and emphasis on customer comfort	Very customized customer experience needs to be managed in store
Retail time to sale	Short decision making time periods and no effort required to “sell” in store (pick and drop in shopping cart!)	Long decision for sale to happen. Customer needs to be educated on product and may make several visits to retail store before final purchase
Incentivisation of sales staff	Sales commission an important component of incentives for Sales persons	No sales commission to sales persons due to the long sales cycle and aggressive selling that might result from such incentivisation
Promotions	Mostly defined by sales, bargains, clearances etc	Mostly driven by special and exclusive events such as art shows, fashion shows, exclusive charity fundraisers/auctions etc
Cost	Cost of distribution is low and aim is to reduce cost of distribution per sales	Cost of distribution is high due to high personalization required. Metrics generally focus on increased CSat, % of repeat purchases, incremental increase in revenue etc
No. of retail points	Large number of stores or many check out points in big box mega store	Smaller number of retail stores and check out or billing is normally personalized and taken care of by sales person