Merchandising: How Companies Entice Customers To Spend

What Is Merchandising?

Merchandising is the presentation and promotion of goods for wholesale and retail sales. This includes marketing strategies, display design, and competitive pricing. It is important for retailers to cultivate their brand, improve the customer experience, compete with others in the sector, and drive sales.

Key Takeaway

• Merchandising refers to the marketing and sales of products.
• Merchandising is most often synonymous with retail sales to consumers.
• Merchandising may refer to the marketing, promotion, and advertising of products for retail sale.
• Technology is changing merchandising, with electronic point-of-sale terminals and targeted mobile ads.
• Categories of merchandising include product, visual, retail, digital, and omnichannel.

Understanding Merchandising

Merchandising includes determining quantities, setting prices, creating display designs, developing marketing strategies, and establishing discounts or coupons. It may refer to retail sales itself, providing goods to end-user consumers.

Merchandising varies across cultures and climates, accommodating school schedules and seasonal holidays. It can refer to using one product, image, or brand to sell another in marketing.

The word merchandise comes from the Old French word "marchandise," meaning "merchant."

Special Considerations

Measuring gross sales provides insight into a retailer’s performance, especially in customer-to-customer markets where they connect buyers and sellers. Consignment retailing allows retailers to resell merchandise without officially purchasing it.

Gross merchandise value measures the total value of merchandise sold over a period through customer-to-customer exchanges, indicating business growth.

The role of chief merchants is evolving, with broader accountability for customer experience, design, and marketing.

Companies need to stay ahead of consumer expectations and innovate to succeed in merchandising.

U.S. Retail Cycles

In the United States, merchandising includes promoting holidays such as Valentine’s Day, St. Patrick’s Day, Presidents’ Day, and Easter, along with seasonal products. Retail is a significant employer in the U.S., responsible for one out of every four jobs.

Merchandising Company vs. Service Company

A merchandising company sells tangible goods, while a service company provides services to clients.

Merchandising Strategies

Merchandisers use window displays, product grouping, signage, promotions, samples, demonstrations, and advertisements to attract buyers. Cleanliness and neatness are important, as they represent professionalism. Online stores should also use merchandising strategies.

Benefits of Merchandising

Merchandising directly impacts sales and customer retention. Effective merchandising helps retailers grow their brand, compete, and stay competitive.

Types of Merchandising Companies

Retail and wholesale are the two types of merchandising companies. Retailers sell directly to consumers, while wholesalers buy from manufacturers and sell to retailers.

What Does Merchandising Entail?

Merchandising is the promotion and sale of products, involving quantities, prices, display designs, marketing strategies, and discounts or coupons.

Merchandising vs. Service Company

A merchandising company sells tangible goods, while a service company provides expertise as a service.

Four Categories of Retail Merchandise

Retail merchandise includes shopping products, convenience products, impulse purchases, and specialty products.