31Dec
By: Justas Markus December 31, 2016

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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