What Is Merchandising and Why Should You Care?

Since the time of early general stores, merchandising has been essential in retail. And with the rise of eCommerce, business owners must consider merchandising from multiple angles. But this doesn’t mean that traditional in-store merchandising for business is dead. As the pandemic eases, you’ll likely see customers returning to brick-and-mortar stores. This means it’s vital to refresh your merchandising strategy.

What is merchandising? For retail businesses, it’s the way products are displayed and portrayed in the store. For instance, beauty products are shown next to beautiful photos. They may also be stocked next to a mirror with hygienic samples so customers can try them.

The goal of merchandising is twofold: psychological and financial. You want to create a positive emotional response and boost sales. So, merchandising should play a key part in retail marketing objectives.

What Are the Benefits of Merchandising in Marketing?

Merchandising in marketing is an affordable way to sell more products. Unlike paid tactics like traditional and digital marketing, direct mail, and other active marketing efforts, retail merchandising is a low- or even no-cost tool. You simply set up inventory in thoughtful and appropriate ways. Then, your merchandising can influence the customer experience and inspire them to buy.

Old-school retailers pioneered effective merchandising. In fact, some of their tactics are still used today. Just check department story display windows. You’ll see strong examples of exceptional merchandising in action. Sporting goods retailers provide good ideas too. Think of displays that artfully bring the outdoors in, helping customers imagine where and how they can use their purchases. But you don’t have to be a brick-and-mortar behemoth to benefit from product merchandising tricks. The first requirement for any good merchandiser is to think visually.

The Key Elements of Visual Merchandising

In-store merchandising is a visual tool. So if you want to set up an effective retail store display, there are several visual elements to consider. Think of yourself as an artist creating a still life. Tell a story that affects your audience emotionally and will boost retail sales. Here’s a checklist to follow as you begin the process of visual merchandising:

• Lighting — Use lighting to draw attention to products. Give special emphasis to high-margin items. Spotlights, mood lighting, floor lamps, strings of holiday lights, all combine to evoke emotional customer responses.
• Signage — Signs are an essential element of your merchandising display. They grab customers’ attention and give them important information. Emphasize key benefits and pricing, especially if there’s a sale.
• Decoration and décor — Think “eye candy” when you’re choosing décor. Consider how to help customers envision a product’s use and environment. Then pay attention to details. Visual displays at Christmastime can be enhanced with wreaths, holly, artificial snow, and other seasonal decor. Or, for a summer-themed product display of swimwear, add beach umbrellas, loungers and a cooler. Remember not to overwhelm the products you’re selling. Just make them shine.

Keep in mind that your store merchandising needs to be strategic. The end goal is to boost retail sales by creating eye-catching and engaging product displays.

Merchandising Strategies

Beyond helping to sell products, your retail merchandising strategy should make the shopping experience memorable and enjoyable. When you create a positive shopping experience you enhance customer loyalty. You also give customers a reason to return to your store and to tell their friends about it. Consider some of the following ways you can use merchandising to turn your customers into advocates.

Think About the Customer Journey

It’s important to ask yourself why people come to your store in the first place. Shopping online is often more convenient. It can be less expensive too. So, why do people shop in-store? Maybe they need something quick and can’t wait for shipping time. Or perhaps they want to browse for ideas. Likely, your in-person customers simply enjoy the in-person shopping experience. Keep these reasons in mind while merchandising. Keep a variety of merchandise stocked and try to give customers an experience they simply can’t get while sitting in front of a computer screen. Keep in mind that first-hand sensory experiences are not available to online shoppers. Consider playing in-store music, using pleasing scents and offering product samples.

Create a Narrative for Your Product

It’s also important to think about product placement. In other words, build a story around your product with visual merchandising. You can also associate it with existing narratives like social movements or pop culture trends. Think of ways to help customers enter a “story” when they enter your store, and you’ll be thinking like a true merchandiser. Consider these examples:

• Grocers use their end caps to showcase popular seasonal items. Before Thanksgiving, they often feature stuffing, cranberry sauce and pumpkin products together with signage and décor that invokes a cozy family feast.
• Independent book stores offer signed books by local authors and include framed photos of the author with staff on the book display table.
• Car dealerships display red, white and blue balloon arches and American flags while promoting their Independence Day sales.

Research Merchandising Trends

New trends often pop up in merchandising, including tying displays to social movements or building interactive product displays. For instance, some retailers incorporate virtual reality. Others have successfully created selfie-friendly displays to encourage social media buzz. Make sure your store isn’t getting stale. Periodically check out your competition and read up on merchandising trends. For new merchandising ideas, consider following experts like Bob Phibbs, known as the “retail doctor.”

Why Do Merchandising?

The bottom line is… your bottom line. Merchandising strategies yield higher sales and build customer connections. And they can do so with minimal ongoing spend. Merchandising also makes your retail space a more enjoyable place for customers and employees. You might just find that merchandising provides a creative outlet for staffers. You could even inspire a little friendly competition. Ask employees to see who can design displays that bring in the most sales or generate the highest net profits. While merchandising is a cost-effective tactic in your marketing strategy, you’ll still want to protect related assets. So make sure to ensure your small business insurance effectively covers you.

Have any creative merchandising ideas and examples? We invite you to leave a comment and share!

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