The prosperity of the economic setup of this world depends on the customers. That said, more customers would mean more sales and, ultimately, more profits. Or you can say that sales are a decisive factor in any business’s success.
Businesses used several informal techniques in the past. People had to cover vast distances to search for new markets, faced many security issues, and had to shout at the top of their lungs to sell their items. But with the discovery of quantitative research techniques and technology, it has become easy.
Attracting more customers is now the prime target for all the businesses, and merchandising is a very effective practice for this purpose.
What is Merchandising?
Merchandisers decide the quantity and price of products/services. Moreover, they also use discounts and coupons with attractive display signs for increasing sales. Furthermore, this may also involve the development of marketing and promotional strategies. Generally, merchandising means the provision of products to the end consumers.
Merchandising can be defined as “Planning involved in marketing right merchandise, at right place at right time in the right quantities at the right price”
Moreover, “retail sales” is an alternate term for merchandising. The use of one product or brand for selling another product or brand is also a type of merchandise.
The retailers may not be the producers of the goods. Therefore, the net sales value helps to determine the performance of a company. The retailer is a third party acting as a connection between the buyers and the sellers.
It is important to understand that the retailers are not the actual owners of the good. So the party that asked for selling it can claim the good. The retailers mostly keep the item for some specific fee/profit, thus merely acting as a reseller.
Today merchandisers are inclined to experience and implement different strategies both in digital stores and brick and mortar. They not only adopt new technologies but also take care of what customers want. Here, it is important to understand the merchandising cycle.
Merchandising cycles vary from culture to culture. Merchandisers use seasonal holidays, religious and cultural festivals as a tactic to target special customers.
Importance of Merchandising
First of all, a good merchandising strategy helps in selling more items to the customer. Secondly, merchandising offers more variety in the same product from different manufacturers. As a result, the customer feels comfortable to choose from the available items. Lastly, the placement of “sale” items will improve the chances of customers buying other items around these items.
Merchandising Vs. Marketing
Following are the main differences between merchandising and marketing.
|It’s about the advertisement for a company.||It’s about the advertisement of an item/service/good in retail.|
|Companies or brands use this tool for their promotion.||Companies or brands use this option for the promotion or marketing of a specific product or service.|
|Marketing targets a specific community or multiple communities.||Merchandising is a tool associated with retail businesses.|
|It is like transmitting an idea, and it follows the 4Ps concept.||It is an activity for the promotion of a good/service for sale.|
|Marketing boosts the sales of a company/business by attracting customers.||Businesses use display cards, coupons, promos, etc., to boost sales of a specific product(s).|
|This works after the closure of the retail period of a product.||It has to establish its roots before marketing.|
|It provides continuous awareness about the company.||Merchandizing Informs the customers about the unique features of the item/service.|
A “one size fits all” strategy is not enough when it comes to merchandising. Since the goals are too vast for the retailer, the merchandising strategies also differ with category or even with each segment to target a specific customer.
Here are some of the most efficient and useful strategies for effective merchandising:
- Unique and glamorous in-store and on-window displays
- Grouping the products according to some popular contemporary theme (e.g., Christmas, Rainy Season, Kids, School, etc.)
- Giving samples and related minor items for free
- Well decorated counter and displays
- Placing the search bar at a catchy location on the site
- Displaying the status bar to demonstrate the progress on checkout
- Using digital data to provide relevant information about the product, such as videos, images, etc.
- Using the banners for advertisement
- Upselling, cross-selling, and bundling
- Using the ribbon overlays that clearly show something unique about a product (highly rated, free shipping, bestseller, sale, most updated, etc.)
- Utilizing the sound, motion technology, and scent for creating some interactive displays
- A dedicated shelf on the front
- Free trials and tasting sessions in the store
- Well-designed, eye-level product placement.
- Live chat feature to facilitate the customer for buying the product.
- Shipping the products for free
- Season-specific and holiday-based packages, decorated and interactive landing pages with special offers
- Suggesting the products
- Asking for rating and feedback
- Grouping the products effectively.
Types of Merchandising with Examples
Retail merchandising is a process of attracting shoppers to sell products/services by using marketing and promotional activities. The products are available for sale only in physical stores like malls, some events, or brick and mortar stores.
For example, the promotion of a product by arranging an interactive event at some mall is a type of retail merchandising.
Visual merchandising is used to make the product and its qualities prominent through different display techniques. It could be proper lighting, product placement, the spacing between the products, or the creative designs.
For instance, explaining the qualities of a product through some image or video is an act of visual merchandising done online. In a retail store, banners, 3D art, and floor patterns are a part of visual merchandising.
Product merchandising includes all the promotional activities used for selling an item/service. It involves both in-store and online products.
The promotion takes place online or offline platforms, depending on the kind of product and its presence. Businesses can also target specific customers for product merchandising with the help of different modern techniques.
For instance, all the promotional activities about a product carried out through emails, banners, or coupons are part of product merchandising.
Digital merchandising includes all the activities used to sell a product on the internet. This is also known as online merchandising or eCommerce. Email marketing initiatives, digital product displays, and digital marketing are also a part of digital merchandising. People prefer to buy products online now more than ever.
For example, Daraz, Amazon, Goto, etc., are some online stores that carry out digital merchandising.
Omnichannel merchandising is a practice to give a better experience to the customers throughout their purchasing pathway. Also, all kinds of activities are used at all points. It does not matter if a customer is buying online or at a retail store; he/she is subjected to omnichannel merchandising at every point.
For example, if an individual searches for some item and leaves the search engine without buying anything. Then the customer will be targeted in the future through emails and online advertisements about the relevant product.
Advantages of Merchandising
Boost in Sales
Increased sales are, after all, the goal for all types of businesses. Effective merchandising definitely leaves a positive impact on the sale of the product. Display signs, coupons, banners, glamorous presentation, free offers attract more customers that are willing to spend their money.
More Customer Visits
Merchandising increases customer visits to your selling platform. It is not important if your merchandising efforts are not giving you immediate or instant results. Once a customer visits your platform, it will leave a good impression on his/her shopping experience. Even if not instantly, the customer will eventually decide to spend some money on what you are offering.
Rearrangement of shelves, aisles, and interior space of the store are mandatory for effective merchandising. A clean and well-managed environment leaves a pleasant impact on the human mind. This is an attractive strategy for increasing customers and boosting the image of your brand.
Disadvantages of Merchandising
Merchandising brings you more sales, but it also demands more money, effort, and time in the short run. Creating new banners, signs, coupons, and shelves can add up instantly to your expenses.
More Staff Requirement
More sales coming in every day means you’ll certainly need more staff to manage things. The effective management of the sales department precedes the need for more human resources. This ultimately asks for more money.
This is the biggest drawback of successful merchandising. Indeed it is a great method to boost your sales, but this stage continues “shining” as long as you keep pouring money on merchandising. So, more money, energy, and time are required for satisfying the current customers and engaging the new ones.