What is merchandising? Definition and examples

An area this is especially prevalent in is clothing or fashion retail in which potential sizing issues can be a large factor in a customer refraining from purchasing an item online. As just one example, in the United States the basic retail cycle begins in early January with merchandise for Valentine’s Day, which is not until mid-February. Summer merchandise is next, including patriotic-themed products with the American flag, placed on the market by Memorial Day in preparation for Independence Day (with Flag Day in between). By July, back-to-school is on the shelves and autumn merchandise is already arriving, and at some arts and crafts stores, Christmas decorations. (Often, a Christmas in July celebration is held around this time.) The back-to-school market is promoted heavily in August, when there are no holidays to promote.

• Digital merchandising includes all the activities used to sell a product on the internet.
• Under this definition, there are two types of merchandising companies, namely retail and wholesale.
• More sales coming in every day means you’ll certainly need more staff to manage things.
• Merchandising, broadly speaking, refers to any entity that engages in selling a product.
• Also, they have an efficient and instant customer care service to manage customer inquiries.
• It deals with presenting physical or digital products in a way that customers will spend money on them.

Challenges associated with effective merchandising

This then feeds into the challenge of managing inventory levels to avoid stock-outs or excess inventory. Businesses also need to be careful not to over promote products, as this can lead to consumer fatigue and ultimately decreased sales. It includes providing robust customer support to customers across all platforms (brick-and-mortar and online). It, thus, helps them decide whether to purchase a particular product or look for something else. Merchandising includes inventory control, as well as analysing sales, product popularity and seasonal trends.

Marketing Tutor

One of the best ways to capitalize on this potential and increase your foot traffic is through smart merchandising. Use effective merchandising in your window displays or outside of your store to catch the eyes of passersby and entice them to come inside. Merchandising is critical for a retailer, as it can directly impact sales and customer retention.

When the product arrives at a retail store with suitable packaging, it immediately attracts customers. The next step is to display discount banners to ensure shoppers visit the discount rows and pick such things without hesitation. Cleanliness and neatness are also important, as they are synonymous with professionalism. A business’s online store should also use merchandising strategies to appeal to online shoppers. Originally, merchants would travel across different regions to sell their goods.

Merchandising, broadly speaking, refers to any entity that engages in selling a product. Under this definition, there are two merchandising definition types of merchandising companies, namely retail and wholesale. Retailers sell their products directly to consumers, while wholesalers buy from manufacturers and sell to retailers. As the name suggests, a merchandising company engages in the sale of tangible goods to consumers. These businesses incur costs, such as labor and materials, to present and ultimately sell products. Since the sales process often starts with the eyes, retail merchandising typically involves presenting products in a visually favorable light, to try and encourage purchases.

Online merchandising

At a retail in-store level, merchandising refers to displaying products that are for sale in a creative way that entices customers to purchase more items or products. Merchandising refers to the marketing and sales approach for promoting goods at retail outlets and influencing consumer behavior, thus boosting sales. It constitutes a vital part of retail management and makes products visually appealing to buyers at a brick-and-mortar or online store. Merchandising is an activity of displaying and promoting products/services for retail sale in both brick and mortar and digital stores. In accounting, for example, the term sales refers to items that consumers buy, i.e., purchases made. First, changing up your retail display will keep your shopping experience exciting for customers.

In other cases, large amounts of merchandise can be generated from a pitifully small amount of source material (Mashimaro). Merchandising also varies within retail chains, where stores in places like Buffalo might carry snow blowers, while stores in Florida and southern California might instead carry beach clothing and barbecue grills all year. Coastal-area stores might carry water skiing equipment, while ones near mountain ranges would likely have snow skiing and snowboarding gear if there are ski areas nearby.

• For instance, explaining the qualities of a product through some image or video is an act of visual merchandising done online.
• Retailers use merchandising in their stores to cultivate their brand image, improve customer experience, and drive sales.
• When we talk about merchandise, we are talking about products available for sale, typically in a retail setting.
• If you’re starting a business where you plan to sell products, either online or in a brick and mortar store, you should know what merchandising is and how to use it effectively.
• Then, the consumer will immediately see the whole product from the most attractive side.
• It involves developing clear and effective business strategies for product selection, packaging, display and pricing to enhance customer appeal and ultimately drive sales.
• 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.

Examples of merchandising in a Sentence

All content on this website, including dictionary, thesaurus, literature, geography, and other reference data is for informational purposes only. This information should not be considered complete, up to date, and is not intended to be used in place of a visit, consultation, or advice of a legal, medical, or any other professional. This video presentation, from our sister channel on YouTube – Marketing Business Network, explains what the meaning of ‘Merchandising’ is using simple and easy-to-understand language and examples. If you are creative, pay attention to detail, have good spoken and written skills, and are good at working under pressure, you should consider a career in merchandising. Here is a list of things you should consider and tips to help you stick to your merchandising budget. Adam Hayes, Ph.D., CFA, is a financial writer with 15+ years Wall Street experience as a derivatives trader.

It helps to make a competent sales plan to avoid a shortage of demanded goods or, on the contrary, an overabundance of irrelevant products. Also, merchandising allows you to reduce the circulation cost and increase the overall work efficiency. Competent and properly organised merchandising attracts customers’ attention, convinces them to buy goods and even increases the average cheque. Brigitte is a retail specialist and staff writer with brick-and-mortar management experience.

‘One size fits all’ is definitely not the best approach in the world of merchandising. Each product sells better in a specific number of settings and types of offers. In the same way, certain types of consumers respond well to one approach and not to another. 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. Sometimes a brand of non-media products can achieve enough recognition and respect that simply putting its name or images on a completely unrelated item can sell that item.