The Importance of Merchandising
For Retail Businesses
In order to sell goods efficiently a business must be familiar with merchandising. Effective merchandising allows products to be displayed in an appealing manner, strengthens brand messages, and makes stores easy to shop. Merchandising can be seen in product displays, packaging, good in-store signage programs, and even when employees of a business stack products in an appealing manner.
Direct Sales Increases
Businesses who merchandise well will see huge increases in their total sales and average sales/customer. Effective merchandising will increase sales by
- upselling = influencing a customer to buy a premium version of the product they are interested in
- cross-selling = selling items that go well together but may be from different departments
- and encouraging impulse purchases
Example 1 – John is going to a grocery store to pick up a frozen pizza for dinner. He usually grabs a mid-range brand and heads to check out. Instead, John’s eyes lock on to a poster located on top of the freezer. The poster shows a delicious pizza in high definition. John decides to treat himself and spend the extra 3 dollars to get the premium brand of frozen pizza.
Example 2 – Lisa is in the mood for ice cream. She has not decided what type she would like yet. When Lisa gets to the freezer section of her grocery store one of the end cap grabs her attention. It has an entire, “make your own sundae” theme. Instead of buying a single carton of ice cream, Lisa purchases ice cream as well as cones, hot fudge, chopped peanuts, and whipped cream.
Each of the examples above illustrates how merchandising can cause customers to purchase more than they intended. Window stickers and other signage can also increase traffic into your store, directly leading to more sales.
Indirect Sales Increases
Indirect benefits of merchandising include building brand loyalty and space management. At first glance, this takes shape by clean facilities, organic, and fresh produce offerings, clearly marked aisles and departments, and a convenient experience. No customer should have to look too hard to find what they need. Businesses want to make it easy for customers to spend money. That is why a common saying from retail workers is, “did you find everything okay”?
To illustrate some of these benefits we turn to a blog post from a frustrated yogurt shopper. The title of her article is, “If I Ever Leave You, It’s Because of How You Shop for Yogurt”. The article succinctly sums up the frustration of shopping at a poorly merchandised business.
In Summary; the shopper wants healthy yogurt for her children and has to check the ingredients of all the types of yogurt. An effective merchandising campaign would use labels to visually section off the different categories of yogurt.
Doing this type of merchandising is easy to implement and makes a huge impact on customers, increasing brand loyalty.
Now that you know the importance of merchandising, learn some steps you can take to increase your retail sales!
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