Imagine yourself walking into a department store with fine perfumes. Modern mannequins wear the latest fashion styles, and coordinating accessories are nearby for a complete look. These classic examples show a successful merchandising campaign in action.
The goal of merchandising is to appeal to the consumer’s psychology, not just their aesthetics. What you need to understand to make intelligent merchandising choices that will pique the interest of customers, satisfy their needs and ultimately drive them to purchase.
What is a marketing strategy?
A merchandising plan is a comprehensive strategy that describes how a company will present their products to customers to maximize sales and enhance the customer experience. In the omnichannel retail environment of today, there may be differences in how physical and digital shops approach their products.
A merchandising plan for a brick and mortar store selling tangible goods is centered around the layout. This includes product placement as well as window displays, signage and lighting, optimal shelf stocking, facing and in-store promotional activities.
Ecommerce Merchandising is a set of features that online retailers can use to increase sales. These include intuitive website design and layout, attractive landing pages, product images with compelling descriptions, User-Generated Content as well as a seamless checkout system facilitated by Point-of-Sale (POS).
Five benefits of a marketing strategy
- Increase retail sales
- Increase brand recognition
- Enhance customer experience
- Improve Inventory Management
- Increase brand loyalty and customer retention
A well-formulated retail merchandising plan guides customers through the various products and services you offer. We’ll explore five key benefits of implementing retail merchandising strategies, both for retail stores as well as online stores.
1. Retail sales increase
An effective merchandising strategy can influence customer behavior and have a significant impact on the bottom line of your business encouraging customers to make a purchase and increasing your profit margins, sales volume, and customer retention rate. Your business can increase sales and customer loyalty by arranging your products in an appealing, intuitive manner. Keeping your storefront and in-store displays fresh by updating them regularly and rotating your display keeps customers coming back and discovering new products.
2. Brand recognition is important for brand awareness
The merchandise allows you to showcase your Brand Identity. It is important to use color schemes, fixtures and signage that are in line with the values and image of your brand. Retail merchandising strategies that are aligned with your brand’s ethos will create an in-store or online shopping experience that is memorable, and can help you stand out from your competition.
3. Customer experience enhancement
Your product presentation can improve the customer’s experience. This is done by encouraging seamless interaction between products and customers. This could be achieved in-store by creating a store that is easy to navigate and demonstrating interactive products. This could include a website with an intuitive design, high-quality images of products, and testimonials. A well-executed marketing strategy maximizes engagement while minimising customer effort.
4. Inventory management: Improved inventory management
Effective merchandising allows retailers to identify slow-moving products and avoid stockouts. A common merchandising strategy is to use ABC Analysis for categorizing your inventory and prioritizing placement of the bestselling or most-rated products. Effective merchandising strategies for ecommerce often include real-time inventory monitoring, which displays product availability to your customers and alerts you when stocks are running low.
5. Brand loyalty and customer retention are key to retaining customers
Well-executed merchandising strategies that are tailored to the customer’s needs can increase customer satisfaction, encourage repeat purchases, and foster customer loyalty. Customers feel valued when they receive tailored experiences. From online discounts to in-store displays showcasing popular products, customers are treated with respect and understanding. This leads to a stronger emotional connection between your brand and customers, which encourages them to return.
There are 5 different types of marketing strategies
- Upselling
- Cross-selling
- Seasonal merchandise
- Themed Product Bundles
- Limited Time Offers
Retailers can boost their sales by using merchandising strategies. They also improve the customer experience. Consider hiring a consultant who can provide you with pointers on how to create a customized merchandising plan for your business. There are five merchandising techniques that will increase your sales in retail:
1. Upselling
Upselling refers to a technique of sales whereby you encourage your customers to buy a more expensive product, an upgrade or an add-on in order to increase sales. It is not only about increasing the sale value but also the value that the customer receives. A sales associate could explain to a customer who is looking at a basic digital camera the advantages of a more advanced model.
2. Cross-selling
Cross-selling is the promotion of related or complementary products. Cross-selling encourages customers to purchase more than what they initially intended. If a customer wants to buy a suit, the suit could be styled using mannequins, digital photography, and a tie, shirt, or cufflinks. This strategy is effective in both brick-and mortar stores and online stores. It helps to increase sales and move more inventory.
3. Seasonal merchandise
The main focus of seasonal merchandising is to adjust retail displays and promotional campaigns in accordance with the seasons, holidays and events. It takes advantage of the changing preferences and needs of customers throughout the year. In the summer, for example, a clothing shop might feature outdoor furniture, pool toys or other seasonal merchandise. Retailers often create festive displays during the holidays to inspire shoppers.
4. Themed product bundles
Themed bundles consist of a grouping of products with similar functions that are offered at a discount to encourage the customer to purchase more. The theme can be based on a product type (such a moisturizing skincare set), a special occasion (a back to school bundle), or customer preferences (a vegan food crate).
5. Offers for a limited time
Limited-time deals are special discounts or promotional offers that last for a limited time. They’re designed to encourage shoppers to make immediate decisions. A retailer may offer a promotion called “deal of day”, which creates anticipation and urgency, motivating customers to buy today or keep an eye out for a sale tomorrow.
Four tips on merchandising
- Research trends in merchandising
- Continued customer research
- Track inventory
- Mobile-friendly website
A strong retail merchandising plan can increase sales, improve the customer experience and help differentiate your brand on a competitive market. Here are four ways that retailers can optimize their retail merchandising strategy to achieve their business goals.
1. Research trends in merchandising
Keep up with the latest trends in merchandising, including augmented realities and interactive experiences that blend real and digital worlds. The latest visual marketing tips will help you to create a store that is in line with your strategy, and also resonates well with your customers. Subscribe to industry newsletters. Attend tradeshows. Follow merchandising firms online. Read popular retailer news blogs.
2. Customer research is ongoing
You can also ask for feedback informally or through surveys. You can observe the behavior of your customers in your store. Which areas of your store do they most often visit? What products do they buy together most often? This research will help you improve your merchandising strategy by providing valuable insights into customer behavior and helping you tailor your Retail Management strategies to enhance the shopping experience.
3. Inventory tracking
Watch closely what items are moving well, and what are still lingering in your store. This will help you make informed decisions regarding product placement, promotions and markdowns. It’s not necessarily a bad product if it’s not selling well. It may need more visibility or a better display.
4. Optimize your mobile website
Customers can use their mobile devices to compare prices or find out information about the store while they are shopping. Mobile-friendly websites that integrate your Ecommerce Platform with your Point of Sale System are a great extension to your physical store.
