DotActiv Team Feb 19, 2016 8:52:26 AM 4 min read

Merchandising Is Much More Than Shelf Packing. Here's Why:

Merchandising-is-much-more-than-shelf-packing.-Heres-why-.jpg

Retail merchandising refers to the many steps involved in the sale of products to shoppers. Every retailer has their own line of merchandise to offer customers. The visual display of any merchandise plays an important role in attracting potential customers into a store and motivating them to make a purchase as well.

Merchandising provides an attractive display of the stores products with the intention of increasing sales and generating additional revenue for the retailer. Merchandising activities may include, but are not limited to; display techniques, free samples, on-the-spot demonstrations, pricing, shelf talkers, special offers, and other point-of-sale methods.

According to the American Marketing Association (AMA), 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.

How can retail merchandising help your business?

The shopper will first and foremost always respond to the overall look and feel of a business. Simply put, if a store is attractive they are more likely to enter the establishment. And, if the business is logically laid out and visually appealing, they are more likely to spend more time browsing through the merchandise.

The overall look of a store does a whole lot more than simply provide a pretty place to shop. In fact, studies have shown that a store’s environment has a profound effect on the shopper's behaviour as well

What does this all mean? Well, the physical elements of the store, i.e. lighting, music, layout, directional signage and human elements, are known to influence shoppers’ behaviour through their effects on their emotion, cognition and physiological state. Here are three areas that could be seen as part of merchandising and have an impact on the emotions of shoppers:

  • Attractive packaging

The packaging of the merchandise is vital to improving the brand value of the product. A product kept in an attractive box almost always hooks the attention of the customers.

  • Unique pricing (discounts)

Lower prices and store discounts also usher customers into the store. Consumers are attracted to brands that offer good value for money, at a price lower than the competition.

  • Striking display

Displaying your products is both an art and a science. An appealing display will catch the attention of a shopper and tempt them towards the merchandise. At the same time, packaging complimentary items in the same aisle – like coffee and sugar – will increase sales of either product.

Merchandising strategies

In order to achieve success, many retailers implement merchandising strategies to maintain a competitive edge over other brands. Every strategy used should be consciously tapered to meet target specific objectives. Together, the different tactics used help achieve the retailer’s end goal of increased sales and profit.

Common strategies employed include:

  • Sourcing unique products that are not available at any other retail store;
  • Never compromising on the quality of the merchandise;
  • Sourcing merchandise as per the season and climate;
  • Building traffic;
  • Creating hype and excitement; and
  • Promotional schemes and gifts.
What is the value of retail merchandising?

Merchandising is more than a simple plan of where products are placed on the shelf or the act of packing products onto a shelf. It is an integral component of the retailers business’ image. 

Retail merchandising should essentially create a more enjoyable shopping experience for consumers, with the intention of increasing profit margins and strengthening customer loyalty.

When you examine the results of your merchandising strategy, analyse the customer's’ experience – from your storefront up until they leave the store – preferably with a purchase in hand.

Conclusion

Merchandising is ultimately about understanding the way customers shop. By using this information, you can position your merchandise to create an increase in sales, profits and loyalty.

avatar

DotActiv Team

The DotActiv team comprises of multiple category management experts, all lending their years of retail experience and knowledge to create well-researched and in-depth articles that inform readers of DotActiv’s retail blog.