The Definition of Merchandising Techniques

by Chirantan Basu

Merchandising is the arrangement of products in a physical or online store to maximize sales. The objective of merchandising is to close the sale after advertising campaigns bring customers into the store. Good merchandising frees up time, makes the selling process simpler, enhances the buying experience for consumers and drives sales growth.

Basic Techniques

Basic merchandising techniques include displaying related merchandise together, simple and clean displays, ample aisle space, well-stocked shelves and prominent featuring of promotional items. For example, a furniture store may create a mock living room with different pieces of furniture items and fixtures to generate sales in these products. Attractive floor displays of seasonal goods in high-traffic areas also drive higher sales and profits. The National Retail Hardware Association recommends storing slow-moving and low-priced items away from customers to encourage sales of high-margin items.

Enhancing the Appeal

The first impression is usually the most important one, which is why window displays in brick-and-mortar stores and landing-page layouts in e-commerce stores are so important. They grab customers' attention and bring them into the store, which is not a simple matter in a mall with dozens of retailers. A bakery may highlight its attractive cakes and chocolate creations, while a clothing retailer may display the most recent fashions in its window display. Proper use of lighting creates a mood and illuminates the merchandise, especially during peak holiday selling seasons.

Store Layout

The type of store usually dictates the floor and shelf layout. For example, grocery stores should have enough aisle space for shoppers to move their carts and accompanying toddlers around when they are doing their shopping. Retailers may often move items to the front of the shelves to avoid giving the impression of not having enough items on stock. Retail managers may use the sales-per-square-foot metric, which is the ratio of sales to total shelf and floor display space, to assess the effectiveness of a merchandising strategy and make the necessary adjustments.

Online Merchandising

E-commerce stores should have a simple layout and an effective search tool for customers to browse through the store effortlessly. Software has advanced to the point where a simple mouse rollover of an item activates a pop-up window displaying the product details and even multimedia demonstrations of how to use the product. Online merchandising techniques include cross-selling, which is the highlighting of related products in search results, making special promotions appear on every page and offering user-friendly electronic checkout facilities.

Other Techniques

End caps, which are the ends of store shelves, and power islands, which are free-standing displays strategically placed in high-traffic store areas, may draw attention to new and high-margin products. Taste testing, product demonstrations and how-to training sessions also highlight certain items and make the customer buying experience more enjoyable.

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