Term
Merchandising
noun
Merchandising is a marketing tactic employed to increase the sale of goods by involving special offers, display signage product placement techniques, and other methods known to influence consumer purchase decisions.
What Is Merchandising?
Merchandising is a marketing tactic employed to increase the sale of goods by involving special offers, display signage product placement techniques, and other methods known to influence consumer purchase decisions. The core of merchandising is to present the right products at the right place, in the right quantity, at the right time, and at the right price to increase sales.
Why Is Merchandising Important?
- Product placement: Great merchandising lets you get additional products in front of your customers, both offline and online, to increase sales.
- Variety: Merchandising reveals the variety you have so your customers know they have a good range of items to choose from.
- Promoting: Putting your discounted items in a certain area on your site or store could tempt people to browse products around it.
Merchandising Strategies
A ‘one size fits all’ approach doesn’t work for merchandising strategies. Based on the overarching objective for a brand, category, and retailer, strategies may vary by segment or even by category to accomplish a particular goal. Some objectives include driving traffic/footfall, increasing customer loyalty, and generating awareness for your online brand.
Merchandising in Retail
Some of the most enticing methods to make customers shop in a retail setting include:
- Interactive displays that engage scent, sound, and motion technology
- Window displays and in-store displays designed around the product
- Shelf display designs
- Creating themed bundles, for example, a ‘back to school’ bundle or a barbecue bundle with assorted products
- Free tasting stations or demonstrations in the store
- Samples and giveaways
- Eye-level product placement
- Stocked shelves and displays
Merchandising in Ecommerce
The most common ways of appealing to customers in an ecommerce setting include:
- A live chat option to support the buying process of visitors
- Placing a search bar on a prominent position on the website
- Free shipping
- Season or holiday-based selections or a curated landing page with special sections
- Product descriptions that use video, audio, and photos
- Recommendations for certain best selling products
- Banners for special advertisements
- Cross-selling or up-selling and bundling
- Product categorization
- Accentuating a product (like classifying it as a bestseller, most popular, etc.)
Advantages of Merchandising
Effective merchandising can lead to increased sales and better profits. When you deliver a seamless shopping experience and help consumers with purchases, you gain an array of advantages, including:
- Repeat purchases
- Increased brand loyalty
- Greater brand awareness
- Higher average order value
- Faster inventory turnover
Additionally, promoting sales and discounts will bring customers to your store by enticing them with the potential for savings. Such merchandising tactics build a sense of urgency amongst consumers, causing them to act quickly to avoid missing out on a great deal.
Difference Between Sales and Merchandising
Merchandising and sales are two closely related functions in a business, but they are not the same thing. The main difference is that merchandising leads the customer to a sale, whereas sales involves customers completing a buying transaction.
For example, a prominent banner on a store can lead customers to the product. When the customer adds that product to their basket and completes a transaction, it will be classified as a sale.