The activity of promoting the sale of goods at retail.
Merchandising activities may include display techniques, free samples, on-the-spot demonstration, pricing, shelf talkers, special offers, and other point-of-sale methods. According to American Marketing Association, merchandising encompasses "planning involved in marketing the right merchandise or service at the right place, at the right time, in the right quantities, and at the right price."
In an eCommerce setting, the most effective ways to entice people to make a purchase include:
Merchandising activities may include display techniques, free samples, on-the-spot demonstration, pricing, shelf talkers, special offers, and other point-of-sale methods. According to American Marketing Association, merchandising encompasses "planning involved in marketing the right merchandise or service at the right place, at the right time, in the right quantities, and at the right price."
Retail merchandising is subtle. When customers walk into the store, they don't consciously think about the sensory experience. Rather, the colors, sounds, smells, temperature, and the way the merchandise feels combine to deliver an experience to the customer psyche that they may not even realize. Retail merchandising is an art and science. Decades of customer research, driven by the overwhelming economic importance and growth of the retail industry, arm retailers with actionable data for effective merchandise strategies and best practices.
This article provides information for retailers to better understand retail merchandising and the difference between related concepts. Whether you are new to retail, have been a retailer for years and are looking for new inspiration to outperform the competition, or work for an e-commerce giant, there's something here for you. Learn tips and the new visual merchandising concepts from experts and researchers who are using cutting-edge science to study buyer behavior. Explore the impact that retail merchandising has on customer experience as well as the business of merchandising, including criteria for selecting a merchandising solutions provider. Discover the new rules of visual merchandising and how to be successful as a merchandise manager.
What is Merchandising?
In the broadest sense, merchandising is any practice which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to the variety of products available for sale and the display of those products in such a way that it stimulates interest and entices customers to make a purchase.
In retail commerce, visual display merchandising means merchandise sales using product design, selection, packaging, pricing, and display that stimulates consumers to spend more. This includes disciplines and discounting, physical presentation of products and displays, and the decisions about which products should be presented to which customers at what time.
Merchandising helps to understand the ordinary dating notation for the terms of payment of an invoice.[clarification needed] Codified discounting solves pricing problems including markups and markdowns. It helps to find the net price of an item after single or multiple trade discounts and can calculate a single discount rate that is equivalent to a series of multiple discounts. Further, it helps to calculate the amount of cash discount for which a payment qualifies.
Merchandising is everything you do to promote and sell your products once the potential customer is in your store. When we talk about merchandise, we are talking about products available for sale, typically in a retail setting.
Since the sales process often starts with the eyes, merchandising typically involves presenting products in a visually favorable light, to try and encourage purchases.
Merchandising Strategies
Some of the most popular ways to entice buyers to purchase include:
- Window and in-store displays
- Grouping related products together
- Shelf signage
- In-store ads featuring the merchandise
- Samples and giveaways
- In-store demonstrations
- Well-stocked shelves
- Spotlighting promotional items
Don’t Discount Cleanliness
Making sure your products look appealing is key to effective merchandising, but how does the rest of the space look? Do customers see:
- Clean floors and aisles
- Dust-free shelves and products
- Products that are neatly stacked or hung
- A sense of organization, rather than overwhelming chaos
- Vignettes of related products set up together to suggest how they might be used
- Enough elbow room to move about comfortably
Benefits of Merchandising
Some small business owners hire professional visual merchandisers to come in and spruce up their displays and selling floor, finding that the cost is well worth it. But merchandising goes beyond just moving inventory around, to space planning and product staging. Effective merchandising yields:
- Higher sales
- Faster inventory turnover
- Buyers who spend more time in the store
- More satisfied customers
- Increased customer loyalty
Stores that present products that customers are frequently looking for in a pleasing display, or tucked away neatly, will find those same customers returning for more on a regular basis.
What is merchandising?
Merchandising is the promotion of the sale of goods that can employ pricing, special offers, display and other techniques designed to influence consumers’ buying decisions. The concept of merchandising is based on presenting products at the right time, at the right place, in the right quantity and at the right price to maximize sales.
Merchandising strategies
When it comes to merchandising strategies, a “one size fits all” approach won’t suffice. Depending on the overarching objective for the retailer, brand, and category, the merchandising strategies should vary by category or even by segment to target a specific goal, such as developing customer loyalty, increasing sales, driving footfall/traffic, raising awareness of your brand, and so on.
In a retail setting, some of the most popular methods to compel shoppers to buy include:
- Interactive displays that use scent, sound, and motion technology
- In-store and window displays in unique shapes
- Shelf signage
- Creating themes to bundle products together (e.g. school lunch, barbecue season, Christmas, etc.)
- Free tasting sessions and in-store demonstrations
- Giveaways and samples
- Well planned, eye-level product placement
- Well-stocked shelves and displays
In an eCommerce setting, the most effective ways to entice people to make a purchase include:
- Live chat support to aid customer purchase decisions
- Placing the search bar in a prominent position on the site
- Offering free shipping
- Status bar to show progress during checkout
- Season-specific and holiday-based collections, curated landing pages and special offers
- Product descriptions that use images, copy, attributes, videos and other digital data
- Product recommendations
- Advertising banners
- Ratings and reviews
- Cross-selling, upselling and bundling
- Effective product categorization
- Ribbon overlays that visually accentuate something special about a product (bestseller, free shipping, sale, newly added, etc.)
Benefits of merchandising
Since merchandising is all about selling, the ultimate benefit of effective merchandising is higher sales and better profit. Stores that manage to create a seamless shopping experience and effectively guide consumers to purchase completion, enjoy an array of benefits including:
- Higher profits
- More satisfied shoppers
- More engaged buyers (longer on-site time)
- Faster inventory turnover
- Increased brand loyalty
- Increased brand recognition
What is the difference between sales and merchandising?
Although sales and merchandising are two closely related functions, they are not the same thing. Merchandising is the process of leading a customer to a sale, while the term “sales” refers to a consumer actually selecting a product and completing a purchase transaction. For example, a prominently displayed banner leading to a special gift guide can inspire and entice a consumer to add a product to their shopping basket (that’s merchandising) and when the customer completes checkout, it’s classified as sales.
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Cycles of merchandising are specific to cultures and climates. These cycles accommodate school schedules and incorporate regional and seasonal holidays as well as weather.
Next Up
Cycles of merchandising are specific to cultures and climates. These cycles accommodate school schedules and incorporate regional and seasonal holidays as well as weather.
Next Up
RETAIL INDUSTRY ETF
WIDE VARIETY
MARKET CYCLES
MARKETING
BREAKING DOWN 'Merchandising'
Merchandising can take on different and more specific definitions in regard to different aspects of retail sales. For example, in marketing, merchandising can refer to the use of one product, image or brand to sell another product, image or brand.
Merchandising can take on different and more specific definitions in regard to different aspects of retail sales. For example, in marketing, merchandising can refer to the use of one product, image or brand to sell another product, image or brand.
Retail Cycles in the United States
In the United States, the routine retail cycle starts in the beginning of January. During this time, merchandising includes the promotion of Valentine's Day and St. Patrick's Day products and related items or services. Shortly following this, Presidents' Day is represented through special sales and discounts.
The next major holiday in the United States is Easter. During this time, not only the holiday is promoted, but springtime and associated warmer weather is accounted for. Most promoted products at that time of year include clothing items appropriate for warmer weather in addition to tools and other items suited for outdoor activities, such as gardening and picnics. These items are typically made available mid-winter and heavily marketed and promoted to move such items from shelves to make room for the next batch of products.
The cycle continues through the rest of the year in the same manner, accounting for Mother's Day, Memorial Day, graduation season, Father's Day, the Fourth of July, Labor Day, Halloween, Thanksgiving and Christmas.
Merchandising typically varies within retail chains, but will varying greatly depending upon the region of the country and within states themselves.
In the United States, the routine retail cycle starts in the beginning of January. During this time, merchandising includes the promotion of Valentine's Day and St. Patrick's Day products and related items or services. Shortly following this, Presidents' Day is represented through special sales and discounts.
The next major holiday in the United States is Easter. During this time, not only the holiday is promoted, but springtime and associated warmer weather is accounted for. Most promoted products at that time of year include clothing items appropriate for warmer weather in addition to tools and other items suited for outdoor activities, such as gardening and picnics. These items are typically made available mid-winter and heavily marketed and promoted to move such items from shelves to make room for the next batch of products.
The cycle continues through the rest of the year in the same manner, accounting for Mother's Day, Memorial Day, graduation season, Father's Day, the Fourth of July, Labor Day, Halloween, Thanksgiving and Christmas.
Merchandising typically varies within retail chains, but will varying greatly depending upon the region of the country and within states themselves.
The New Face of Merchandising
All around the world, but most notably in the United States, the reality of merchandising is getting an update. The roles and the rules of merchandising are experiencing an evolution. Chief merchants, formerly concerned mainly with selection and presentation of products, now have a broader accountability and have a heavier hand in customer experience, as well as the development of design and talent related to display and marketing design.
Because consumer savviness is broadening, and because technology plays such a massive role in merchandising, companies are feeling the need to stay ahead of consumers’ expectations. Innovation and experimentation has a central role in intuitive retailers'
Cycles of merchandising are specific to cultures and climates. These cycles accommodate school schedules and incorporate regional and seasonal holidays as well as weather.
Next Up
All around the world, but most notably in the United States, the reality of merchandising is getting an update. The roles and the rules of merchandising are experiencing an evolution. Chief merchants, formerly concerned mainly with selection and presentation of products, now have a broader accountability and have a heavier hand in customer experience, as well as the development of design and talent related to display and marketing design.
Because consumer savviness is broadening, and because technology plays such a massive role in merchandising, companies are feeling the need to stay ahead of consumers’ expectations. Innovation and experimentation has a central role in intuitive retailers'
Cycles of merchandising are specific to cultures and climates. These cycles accommodate school schedules and incorporate regional and seasonal holidays as well as weather.
Next Up
RETAIL INDUSTRY ETF
BREAKING DOWN 'Merchandising'
Merchandising can take on different and more specific definitions in regard to different aspects of retail sales. For example, in marketing, merchandising can refer to the use of one product, image or brand to sell another product, image or brand.
Merchandising can take on different and more specific definitions in regard to different aspects of retail sales. For example, in marketing, merchandising can refer to the use of one product, image or brand to sell another product, image or brand.
Retail Cycles in the United States
In the United States, the routine retail cycle starts in the beginning of January. During this time, merchandising includes the promotion of Valentine's Day and St. Patrick's Day products and related items or services. Shortly following this, Presidents' Day is represented through special sales and discounts.
The next major holiday in the United States is Easter. During this time, not only the holiday is promoted, but springtime and associated warmer weather is accounted for. Most promoted products at that time of year include clothing items appropriate for warmer weather in addition to tools and other items suited for outdoor activities, such as gardening and picnics. These items are typically made available mid-winter and heavily marketed and promoted to move such items from shelves to make room for the next batch of products.
The cycle continues through the rest of the year in the same manner, accounting for Mother's Day, Memorial Day, graduation season, Father's Day, the Fourth of July, Labor Day, Halloween, Thanksgiving and Christmas.
Merchandising typically varies within retail chains, but will varying greatly depending upon the region of the country and within states themselves.
In the United States, the routine retail cycle starts in the beginning of January. During this time, merchandising includes the promotion of Valentine's Day and St. Patrick's Day products and related items or services. Shortly following this, Presidents' Day is represented through special sales and discounts.
The next major holiday in the United States is Easter. During this time, not only the holiday is promoted, but springtime and associated warmer weather is accounted for. Most promoted products at that time of year include clothing items appropriate for warmer weather in addition to tools and other items suited for outdoor activities, such as gardening and picnics. These items are typically made available mid-winter and heavily marketed and promoted to move such items from shelves to make room for the next batch of products.
The cycle continues through the rest of the year in the same manner, accounting for Mother's Day, Memorial Day, graduation season, Father's Day, the Fourth of July, Labor Day, Halloween, Thanksgiving and Christmas.
Merchandising typically varies within retail chains, but will varying greatly depending upon the region of the country and within states themselves.
The New Face of Merchandising
All around the world, but most notably in the United States, the reality of merchandising is getting an update. The roles and the rules of merchandising are experiencing an evolution. Chief merchants, formerly concerned mainly with selection and presentation of products, now have a broader accountability and have a heavier hand in customer experience, as well as the development of design and talent related to display and marketing design.
Because consumer savviness is broadening, and because technology plays such a massive role in merchandising, companies are feeling the need to stay ahead of consumers’ expectations. Innovation and experimentation has a central role in intuitive retailers' merchandising strategies.
In the broadest sense, merchandising is any practice which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to the variety of products available for sale and the display of those products in such a way that it stimulates interest and entices customers to make a purchase.
- Also Known As: visual merchandising, visual display, marketing
- Common Misspellings: mershandising, merchantising, merchandizing, merchandiseing
- Examples: When petite-sized clothing in an Old Navy store was hung on a bar that was out of reach for short people, it was bad merchandising.
Merchandising is a term that is used to refer to a wide scope of business and marketing strategies which involve the use of tactics by retailers in order to present products or services to consumers in the most attractive and convincing way possible.
All around the world, but most notably in the United States, the reality of merchandising is getting an update. The roles and the rules of merchandising are experiencing an evolution. Chief merchants, formerly concerned mainly with selection and presentation of products, now have a broader accountability and have a heavier hand in customer experience, as well as the development of design and talent related to display and marketing design.
Because consumer savviness is broadening, and because technology plays such a massive role in merchandising, companies are feeling the need to stay ahead of consumers’ expectations. Innovation and experimentation has a central role in intuitive retailers' merchandising strategies.
In the broadest sense, merchandising is any practice which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to the variety of products available for sale and the display of those products in such a way that it stimulates interest and entices customers to make a purchase.
- Also Known As: visual merchandising, visual display, marketing
- Common Misspellings: mershandising, merchantising, merchandizing, merchandiseing
- Examples: When petite-sized clothing in an Old Navy store was hung on a bar that was out of reach for short people, it was bad merchandising.
Merchandising is a term that is used to refer to a wide scope of business and marketing strategies which involve the use of tactics by retailers in order to present products or services to consumers in the most attractive and convincing way possible.
Who Uses Merchandising
Merchandising is mostly used by brick-and-mortar retail stores, whether the retailer is independently owned or part of the largest retail chains. While many retailers may carry the same merchandise, It is the merchandising strategies that distinguish retail competitors. How branding, packaging, and visual display is or isn't used in a retailer's merchandising strategies has a direct impact on foot traffic, sales, customer loyalty, and general popularity. Merchandising can make a retail store a place where shoppers want to be - or not.
Merchandising is mostly used by brick-and-mortar retail stores, whether the retailer is independently owned or part of the largest retail chains. While many retailers may carry the same merchandise, It is the merchandising strategies that distinguish retail competitors. How branding, packaging, and visual display is or isn't used in a retailer's merchandising strategies has a direct impact on foot traffic, sales, customer loyalty, and general popularity. Merchandising can make a retail store a place where shoppers want to be - or not.
Why Merchandising is Important
It's not just about what products a retail store makes available to its customers, it's also how those products are merchandised that determines how successfully a retailer is able to sell the merchandise. By using merchandising best practices, a retailer can motivate customers to want to spend money
It's not just about what products a retail store makes available to its customers, it's also how those products are merchandised that determines how successfully a retailer is able to sell the merchandise. By using merchandising best practices, a retailer can motivate customers to want to spend money
Variety
With a sufficient variety of merchandise, retailers can engage shoppers in an "either-or" buying decision rather than a "yes-or-no" decision. For instance, if Best Buy carried only one brand and one model of a laptop computer, the consumer would have only a "yes-or-no" decision. Yes, I want this computer or no, I don't want this computer. But since Best Buy carries computers from Dell, Samsung, Apple, etc., consumers are immediately engaged in making a decision about which computer is best, bypassing the "yes-or-no" debate altogether.
Apple Stores, on the other hand, carry only one brand of computer, which is Apple, of course. But the variety they provide comes from many different shapes, sizes, and capabilities of a wide variety of Apple computer models. No matter what the merchandising mix, retailers that provide variety to their shoppers are using a merchandising best practice to motivate customers to make a purchase before leaving.
With a sufficient variety of merchandise, retailers can engage shoppers in an "either-or" buying decision rather than a "yes-or-no" decision. For instance, if Best Buy carried only one brand and one model of a laptop computer, the consumer would have only a "yes-or-no" decision. Yes, I want this computer or no, I don't want this computer. But since Best Buy carries computers from Dell, Samsung, Apple, etc., consumers are immediately engaged in making a decision about which computer is best, bypassing the "yes-or-no" debate altogether.
Apple Stores, on the other hand, carry only one brand of computer, which is Apple, of course. But the variety they provide comes from many different shapes, sizes, and capabilities of a wide variety of Apple computer models. No matter what the merchandising mix, retailers that provide variety to their shoppers are using a merchandising best practice to motivate customers to make a purchase before leaving.
Flexibility
Using merchandising fixtures and strategies that are flexible is important in order to rotate inventory and keep a retail store looking fresh and new. Rotating merchandise around the store gives shoppers the feeling that there is always something new to discover. Showcasing new arrivals in the front of the store lures shoppers in the door. Displaying clearance merchandise in the back of the store directs foot traffic past merchandise displays they might otherwise miss.
Using merchandising flexibility best practices, retailers can focus the attention of shoppers on seasonal merchandise, holiday-specific merchandise, and special promotional deals. The better a retailer is at capturing the attention of shoppers and focusing them on the newest merchandise, the most popular merchandise, and the best limited-time deals, the faster they will be able to make sales and move inventory out the front door.
Using merchandising fixtures and strategies that are flexible is important in order to rotate inventory and keep a retail store looking fresh and new. Rotating merchandise around the store gives shoppers the feeling that there is always something new to discover. Showcasing new arrivals in the front of the store lures shoppers in the door. Displaying clearance merchandise in the back of the store directs foot traffic past merchandise displays they might otherwise miss.
Using merchandising flexibility best practices, retailers can focus the attention of shoppers on seasonal merchandise, holiday-specific merchandise, and special promotional deals. The better a retailer is at capturing the attention of shoppers and focusing them on the newest merchandise, the most popular merchandise, and the best limited-time deals, the faster they will be able to make sales and move inventory out the front door.
Packaging and Branding
Attractive packaging and popular branding can enhance the visual appeal of both specific merchandise and the look of a retail store overall. Grocery stores use packaging to preserve the quality and safety of fresh foods. Department stores like Macy's and Nordstrom group branded merchandise together into their own mini-departments. Barnes & Noble Bookstores dedicate a portion of their stores to coffee shop brands like Starbucks. The Sephora brand has established stores within JCPenney stores.
These are all examples of common packaging and branding best practices.
Attractive packaging and popular branding can enhance the visual appeal of both specific merchandise and the look of a retail store overall. Grocery stores use packaging to preserve the quality and safety of fresh foods. Department stores like Macy's and Nordstrom group branded merchandise together into their own mini-departments. Barnes & Noble Bookstores dedicate a portion of their stores to coffee shop brands like Starbucks. The Sephora brand has established stores within JCPenney stores.
These are all examples of common packaging and branding best practices.
Related Product Displays
Sporting good stores like Dick's Sporting Goods merchandise socks in the shoe department. Coffee shops like Starbucks merchandise coffee bean grinders and insulated travel mugs next to the coffee beans. Discount department stores like Kohl's merchandise oven mitts next to the cookie sheets. By grouping related products together, retailers remind consumers about to purchase products they might not have known they needed or wanted.
Sporting good stores like Dick's Sporting Goods merchandise socks in the shoe department. Coffee shops like Starbucks merchandise coffee bean grinders and insulated travel mugs next to the coffee beans. Discount department stores like Kohl's merchandise oven mitts next to the cookie sheets. By grouping related products together, retailers remind consumers about to purchase products they might not have known they needed or wanted.
Easy Access in Merchandising
The way that merchandise is displayed should provide customers with easy access, which makes it easy for them to choose just the right merchandise that's right for them. If merchandising displays make products difficult to reach, difficult to find, or difficult to sort through, customers might get frustrated and leave without making a purchase. Merchandising best practices should always make it easy for customers to make a purchase.
The way that merchandise is displayed should provide customers with easy access, which makes it easy for them to choose just the right merchandise that's right for them. If merchandising displays make products difficult to reach, difficult to find, or difficult to sort through, customers might get frustrated and leave without making a purchase. Merchandising best practices should always make it easy for customers to make a purchase.
Promotions Merchandising
Special discounts, seasonal clearances, and limited-time marketing campaigns are all supported by merchandising best practices. By showcasing and featuring merchandise with special sales prices, customers are motivated to make purchases for no other reason than to get a good deal. Sometimes the display of promotional merchandise is referred to as "merchandising." While merchandising and promotional displays are seemingly one in the same, promotional displays are just one aspect of merchandising.
Special discounts, seasonal clearances, and limited-time marketing campaigns are all supported by merchandising best practices. By showcasing and featuring merchandise with special sales prices, customers are motivated to make purchases for no other reason than to get a good deal. Sometimes the display of promotional merchandise is referred to as "merchandising." While merchandising and promotional displays are seemingly one in the same, promotional displays are just one aspect of merchandising.
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