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DotActiv Team Jan 27, 2017 4:34:48 PM 3 min read

4 Types Of Merchandise And What They Mean For Retailers


There are many ways for retailers to quantify success, but in the end, the key success metric is selling as much merchandise as possible at the highest profit margins. Easy right? Not quite. All retailers are classified by the following characteristics:

Of these, assortment and range of merchandise have the biggest impact on a retailer’s bottom line. Retailers need be strategic when buying products into their business so that they have an assortment which caters to their customers’ needs and wants.

In this blog post we break down four types of merchandise and what they mean for retailers.

Merchandise types:
1. Convenience goods

There are products in our lives which we simply cannot do without. This is not in regards to products we love like our phones or our favourite pair of shoes, but more in regards to products which are staples and essential to daily living. These products are classified as convenience goods, items which are widely available and regularly bought with very little effort.

As they are often purchased, customers should not need to go through a rigorous decision-making process. Demand transfer is also very common with convenience goods, where customers will select an alternative brand if their choice brand is not available.

Convenience goods are usually inexpensive and have a low opportunity cost for customers, but this also means a higher sensitivity to price. In this case, the main objective for retailers is to balance out price and demand, ensuring that incremental price increases don’t have a negative effect on quantities of goods sold.

As a result, to make maximum profit retailers need to ensure they sell large volumes of convenience goods at a fast pace. Examples of convenience goods include food, newspapers, cleaning products, and personal hygiene products.


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2. Impulse goods

“Two-thirds of the entire economy is impulse buying.” - Paco Underhill, author of the book, Why We Buy: The Science of Shopping.

Have you ever tried to shop according to a strict list? Odds are you budgeted carefully, but after browsing the store, there were extra items which you had to add to your shopping cart. If that’s you, have no fear, you’re not alone – 9 out of 10 shoppers make such purchases.

This is a merchandising strategy implemented by retailers where they stock impulse goods – goods which are purchased instantaneously without significant thought process – to great effect.

Impulse purchases are never planned – customers simply see them, pick them up and head to checkout. The most important factors for impulse goods to sell however lies in display and location. If not well displayed or located in unassuming sections of the store, they will be missed.

These products are often displayed at till and check out points to entice customers to quickly add it to their purchases. They include magazines, sweets, or complimentary products.

3 Shopping products

If you’ve ever spent hours researching a particular product and comparing brands before you purchase, you are looking at merchandise that is referred to as shopping products - goods that customers want ample product information on and have the ability to be compared to other brands. Because of the intensive research and multiple comparisons, these products are often purchased less.

Customers normally compare a number of alternative brands based on price, quality and content, etc. before making a final decision. There are also psychological and emotional aspects of this purchase such as acceptance, appreciation or belonging.

For example, many people purchase the iPhone not just for the utility of the phone but for the association it has with being a status symbol. Examples of shopping products include clothing, electronics, and furniture.

4. Speciality goods

Imagine travelling to another town or locale to a particular store for a particular purchase.

In this case, the store is known as a speciality store which carries speciality goods. For speciality goods, customers are prepared to do extensive research, pay much more and travel long distances if necessary. These products also have a much higher cost attached to them, causing customers to be much more selective.

Regarding demand transfer, customers are often not willing to go with another offering – they will not compare products because they know exactly what they want. An alternative offering is not acceptable. Speciality products do not need to be conveniently located either. Examples may include luxury cars, expensive alcohol, and service experts.


For the successful merchandising, a healthy mix of product types can play a pivotal role in the profitability of their stores.


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.