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What is merchandising?

Merchandising refers to the efforts that retailers make to display and sell products to their customers, but in their physical store as well as on their online sales channels. Most people think it is limited to store displays and the store’s layouts design, but it goes further than that. Merchandising also involves picking the products that would sell the best and pricing them in a competitive manner. Retailers make use of merchandising to convert their store visitors into paying shoppers and customers. It is also used to sway customer buying patterns. 

Merchandising also helps in boosting brand awareness and consistency. In addition to store displays, store layouts, and picking the right products, merchandising even involves other activities like creating special promotional offers and discounts, on-spot demonstrations, free samples, and various types of point-of-sale methods.

The merchandising techniques used in stores depend on the season, climate, culture, etc. Merchandising techniques used in the winter would tend to be quite different from the merchandising techniques that a store would use in the summer. 

What are the different types of merchandising?

What are the different types of merchandising?

Here are the different types of merchandising that retailers might use:


Product merchandising

This involves all the promotional activities that are related to boosting the sales of a specific product. Product merchandising can be done for your online stores and sales channels as well as for your physical brick-and-mortar store.

Product display is an example of in-store product merchandising, while website design could be considered to be an example of online product merchandising.


Visual merchandising

Visual merchandising refers to all the activities that are done to display products and highlight their features. This could involve making better use of the space that is available to you, lighting your store in a better manner, or improving your store design.

For your online store, changing the theme, the colors that you’re using, etc. would come under visual merchandising.


Retail merchandising

Retail merchandising is strictly limited to displaying and selling your merchandise in a physical brick and mortar retail store. This includes all the marketing and promotional activities that you’re going to use to sell products to shoppers in your brick-and-mortar stores. 


Omnichannel merchandising

Omnichannel merchandising, also known as omni-channel retailing is all about creating a unified customer experience on all the platforms and channels over which the retailers sell their products and reach their customers. Omnichannel merchandising is all about creating seamless customer experiences across all sales channels. 


Digital merchandising

Digital merchandising is essentially the online equivalent of retail merchandising. It is limited to the merchandising activities that are conducted to promote products and drive sales over digital channels. Digital merchandising is also known as online merchandising or e-commerce merchandising.

Digital merchandising consists of website promotions, digital products display, email marketing, social media marketing, and other aspects of digital marketing. The wave of digital transformation, especially triggered by the pandemic and the lockdowns has caused retailers to take their businesses online, leading to a massive rise in the importance of digital merchandising.

Why do we need merchandising?

Merchandising is needed because when you give your store a new look and display, it attracts new customers and causes your current customers to make more purchases. It even causes impulse purchases from visitors who were just browsing and had no intention of buying anything at all. It increases customer awareness about the product lines that you have available and also increases your market share.

When it is done right, merchandising can have a tremendous impact on your retail sales and revenue. It creates a positive customer experience and even the display can even help attract people who are passing by your store. 

In addition to these benefits, merchandising also helps you use your store space in a better manner. It involves improving the layout of your store, designating spaces on your aisles and shelves, and carrying out other activities that help you get more usable and flexible store space, which allows you to drive your shoppers in a much better manner to the sales displays that you want them to notice and the products that you want them to purchase. This helps you improve your customer experience and improve your brand’s perception, making shopping feel more like a fun experience than a troublesome chore.

What are the 5 Rs of merchandising?

The 5 Rs or the five rights of merchandising are: providing the right merchandise, at the right place, at the right time, in the right quantities, and at the right price. When you’ve got this in place, you can say that you’re doing merchandising right.

What exactly does a merchandiser do?

Merchandisers are retail inventory professionals. Here are a few of the tasks that merchandisers typically perform:

  • Keeping track of warehouse inventory levels, creating and submitting in-depth inventory reports.
  • Letting the company know about customer problems and even addressing customer issues.
  • Helping with creating a well-organized warehouse environment to enhance product accessibility.
  • Stocking shelves and displays on the sales floor where more help in needed with inventory management.
  • Building attractive sales floor displays that feature the right products and promotional offers to catch your shoppers’ eyes.

What is a merchandising system?

Merchandising systems and software aid retailers in planning and executing merchandising operations. These operations include figuring out which items should be stocked, where they should be placed, when you should run promotional offers for them, and how you should price them.

It replaces the guesswork that retailers have been using for decades with data-based decisions. Merchandising systems include pricing engines that help stores price items based on competitors’ prices, gross profit margins, demand for the product, past sales performances as well as vendor incentives.

These systems help you understand which products sell the most, and under which conditions. They help retailers make better informed merchandising decisions.

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