What do you mean by merchandising?
Merchandising includes all the non-verbal tactics retailers use for presenting and promoting their goods in-store. This includes your store layout, the products you choose to sell, how you arrange them, and even your pricing strategy. Retailers use merchandising in their stores to cultivate their brand image, improve customer experience, and drive sales. Show Watch our video below for an overview of merchandising, and continue reading for more details: Elements of MerchandisingRetail merchandising includes different elements that are layered to create a complete merchandising picture in your storefront. These elements include:
Did you know? Sales and merchandising are very similar; however, they are not the same thing. Merchandising is a tactic used to encourage customer purchases in-store, whereas sales refers to the actual act of making a purchase. Well-stocked shelves, clear pricing, tidy displays, and smart merchandising strategies promote more customer engagement and product visibility, which will help drive sales. Here are some specific ways merchandising benefits your bottom line. When products are easy to find, accessible to customers, displayed attractively, and priced well, they sell faster. I cannot tell you how many times I would move a slow-selling item in my shop to its own display area or feature it in a more appropriate spot and it would be gone within the week. Making products visible and displaying them in an appealing manner increases their appeal and the number of customers that see them, ultimately helping sell them. Additionally, promotions and competitive pricing will make your products more appealing to customers and will help you turn over your stock faster. For example, a study from Valassis found that 88% of customers used coupons on purchases in 2020. If you want to drive those sales and get people shopping, smart pricing and promotional strategies are the way to go. Effective merchandising ensures that you are getting maximum utility from every square foot of your store and no space is going unused. This will increase customer exposure to your products and promote visual stimulation and product interaction throughout your store. Say you were visiting a grocery store, and when you entered, many of the shelves were empty or minimally filled (image on the left below), and much of the floor space was vacant. This would be an example of a poorly merchandised store that did not effectively utilize its space, and thus became an unattractive grocery option for customers. Now imagine you visited the grocer next door, and its store was filled to the brim with merchandise and produce (image on the right). This is a store that has been merchandised well and is utilizing its space effectively. Not to mention, you are more likely to stay and make a purchase. (Source: VPR.org) There are a few ways that merchandising can increase customer return rates. First, changing up your retail display will keep your shopping experience exciting for customers. If your store is different every time they come in, they will visit more often to look for new items. Don’t worry, we will look at upkeep best practices further down in this article. Second, if your merchandising is consistent and gives people a good sense of your brand, merchandising can help foster brand loyalty among customers. When customers know what to expect from you and feel like they have a sense of your brand, they will be more likely to form a bond with your business and more incentivized to spend money with you as opposed to your competitors. In fact, a commonly cited customer loyalty statistic is that an average of 65% of retail revenue comes from existing, loyal customers as opposed to new ones. Finally, if you effectively merchandise your store around holidays or seasonal changes, customers will be more inclined to visit your store for time-sensitive shopping. For example, if a clothing boutique merchandises its store for springtime, customers will be more inclined to do their spring shopping there and then return in the winter, when the space has taken on a more wintry feel. Merchandising Resourcing & Cost ConsiderationsWhen starting a retail business or maintaining your existing store, your budget is central to all your decisions, including merchandising. The costs associated with merchandising can vary widely but, rest assured, you do not have to break the bank to create a beautifully merchandised storefront. Before you begin merchandising, you will need to determine your budget. Start with a static budget or the “goal number” that you would like to spend. In addition to this goal figure, give yourself a little space to accommodate unforeseen issues by adding a “flex number” or the maximum you would spend to make things work. There is no set answer for how much your merchandising budget should be; it will largely depend on how much revenue you bring in. The US Small Business Administration has historically recommended spending 7%–8% of your total revenue on all marketing initiatives, including merchandising. The 2021 CMO Survey suggests marketing budgets for business-to-consumer (B2C) firms of 8%–14% and business-to-business (B2B) firms of 6%–8%. Did you know? Merchandising is a type of marketing. Marketing refers to all promotional efforts inside and outside of a store, whereas merchandising refers to promotional efforts that happen within a retail store or website. Here is a list of things you should consider and tips to help you stick to a budget.
Store Upkeep & CleanlinessIt may sound obvious, but keeping your store neat and tidy is important for encouraging sales and creating a good impression on shoppers. Being attentive to details like sparkling floors and clutter-free checkout counters shows customers that you take pride in your business and also indicates that you will show them equal attention and respect. A scuffed floor and dusty corners, on the other hand, show a lack of attention and shoppers will assume that your level of service is equally inattentive. The best way to maintain a clean store is to adopt a cleaning schedule. To do this, you will want to break your store into zones and assign a different zone for cleaning each day. Keep in mind that some areas—like the entrance and exit, bathrooms, and checkout areas—will need to be cleaned more frequently than others. This resource from Dill Cleaning Service offers a comprehensive downloadable cleaning zone checklist. In addition to keeping your store clean, updating your merchandising is another important part of store upkeep. But how often should you be updating? Here is a list of best practices and tips for updating your store merchandising.
Decompression zone: This is the area directly inside your retail store where customers mentally shift from the world outside to your store environment. It gives customers time to pause, take in displays, get a sense of your brand, and make an initial judgment about your store.
Ecommerce MerchandisingEcommerce merchandising is the practice of displaying and promoting products on your online store. All the basics of in-store merchandising—layout, design, pricing, and displays—apply to your ecommerce website. And, just like with merchandising your storefront, your online presence should speak to your brand voice and align with your products and customer base. Here are some effective ecommerce merchandising strategies.
Tip: Display an offer on your homepage. This will help get people interested enough to enter your site and start exploring. Adding an enticing deal to your homepage can help get people engaged and shopping. (Source: ASOS)
Adding a banner to the top of every page of your website ensures customers see your offers. (Source: Thrive Market) Bottom LineMerchandising will determine how you use your space, pricing strategies, display techniques, product selection, and much more. Not only that, but smart merchandising choices will help define your brand and customer experience and drive sales. Merchandising is at the heart of your physical space and your customer impressions, and understanding how it works will set you up to create a beautiful store that will keep customers spending and coming back again and again. What is merchandising and example?Merchandising is synonymous with the sale of goods in retail with the target being the customer. Examples of merchandise include clothes, shoes, furniture, electronics, cleaning products, and food products among others. The intention of selling merchandise is to make a profit.
What is the full meaning of merchandising?Merchandising refers to the marketing and sales of products. Merchandising is most often synonymous with retail sales, where businesses sell products to consumers. Merchandising, more narrowly, may refer to the marketing, promotion, and advertising of products intended for retail sale.
What is the best definition of merchandise?-ˌdīs. : the commodities or goods that are bought and sold in business : wares. sells a variety of spring merchandise. archaic : the occupation of a merchant : trade. merchandise.
What is meant by product merchandising?Product merchandising is the practice of intentional promotion, displaying, and selling of the products in your store. A big part of this is visual merchandising—the process of planning, designing, and displaying products to highlight their features and benefits.
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