Merchandising in retail is a subject that any retail owner shouldn’t take it lightly. If your store is struggling with sales, one of the key things you can check back is how well this subject is handled. Do this right, and over time you will see a significant increase in sales. So how to do this right?
Hi, Akid here.
After almost 10 years working in the retail industry as an Assistant Branch Manager for respective retail brands here, I can safely say merchandising is one of the most critical sales improvement strategies that retail owners should think about thoroughly. Making a good amount of sales every day is not just about the product you sell. It is also about presenting what you sell and how well you create a comfortable shopping experience for consumers.
Think about it: you have many good products, but the customer did not know where to find them. For example, your store is big, and the customer did not know which section they are in now. Or product display is soo unorganized and messy until customers feel it’s hard to choose what they want to buy – You can’t expect to make a good profit if this is your current situation.
So what you can do to fix these issues is learn and improve your merchandising knowledge and skills.
What is Merchandising in Retail?
In a nutshell, merchandising in retail is a process of effectively organizing products displayed and meant to inform customers to drive sales.
In a more specific explanation; Imagine you are one of the customers entering one of the stores with a messy & unorganized product display. Because of the environment, you feel hard to find what you want. So will you continue to shop there or walk away? The answer is obvious. You walk.
So the purpose of retail merchandising is to attract buying power by having the product displayed in an organized manner, at the right place at the right time. In merchandising, retail owners also have to take into account several factors when they display goods. Not just from “what” products to show but also “how” these products are displayed.
Effective product display means ensuring that the customer sees the product quickly, leading to more purchase opportunities. It also includes merchandising products within the store layout to maximize sales, driving traffic into different sections of the store, and increasing time spent in-store
Why Merchandising Matters in Retail Stores?
The primary reason why merchandising matters is that it can drive sales and more sales. Retail company objectives are always looking for ways to increase profits, and merchandising is one of the best ways to do that.
It is vital for store owners because it helps them generate more revenue from less inventory, which gives their store an advantage over similar stores nearby that don’t have such an effective merchandiser on board.
Other objectives of merchandising are:
– To create a comfortable & enjoyed the shopping experience
– To make all the products look appealing and enticing to customer’s eyes
– To increase customer time spent in-store through tidy, well-organized displays
– To influence a purchase decision
– To boots sales by encouraging customers to buy more than they initially planned by displaying similar item categories together
How to Effectively Merchandising in Retail?
The store’s merchandise displays attract your customers and keep them in the store, increasing the chances of purchasing. To do this right, understanding the fundamentals of retail merchandising is crucial.
Different types of retail stores have their ways of organizing product displays. But their merchandise principle mostly shares the same idea:
The primary purpose of a display is to attract customers’ attention, so it should be eye-catching and attractive
The information in the display should be clear and concise
The background color and theme both can have a significant effect on customer’s mood and interest in the product
Displaying different types of products in one place will increase your chances of getting customer’s attention
Keep your shelves stocked at all times
Based on my experience managing one of the top retail stores here, you can effectively do this task using one of my how-to-display formulas, DHS. This is something I came up with so employees here can do it right. DHS stands for:
D= Department. Make an item of the same type at the same place. For example, if you’re store hardware and electrical product, don’t mix them. Separate them according to their types. Hardware is hardware, electrical in electrical.
H= Highlight. What it means is only top brands/expensive/new items at the frontline of the shelving. Product with one of those criteria always sold fast. So always prioritize this kind of product. While the old ones/cheap/non branded display in other places (but same department)
E= Eye level. Display your product follows eye level. Eye-level will ensure your item placing is not too low or too high, which troubles most customers to see it. You don’t want to display a minor thing at the top of gondolas. I mean, who can’t see it.
A good rule of thump eye level is between 5ft-7ft from the ground/ customer can see easily without looking too down or too high. But it may vary depending on the situation and product size.
S= Size. Make your product display looks neat, tidy, and organized by utilizing product size. Most small retail owners didn’t realize this. They display their product with a mix in size; big – small – big – small – small, then suddenly at the end it’s big again. If your eyes feel uneasy when looking at it, so do your customers.
I recommend starting from the left of your gondola/shelving with an oversized size item. After that, you have two options depend on the product size:
If the size is all the same, then carry on with all of it in the same size.
If it has multiple sizes, start with big from the left, then get smaller to the right.
S= Safety. Have sharp/heavy products? Arrange and display them from stomach level to knee level. You don’t want to place these kinds of products high or eye-level. Because if the product falls off from gondola/shelving and hits their heads, chances are they will press charges on you. So please alert for customer safety. If you have an easy flammable/chemical product, display it near the cashier counter or somewhere at head level to prevent a child from playing with it.
The other way to do merchandise effectively is to study from your successful competitor, copy their ways, and tweak the part where they have issues. But, again, creativity is needed here, so be experimental.
Merchandise in retail; Display Ideas and Tips for Retailers
Many businesses today are struggling with how to merchandise their products successfully. Merchandise display ideas can make or break a business. So here I’m giving some ideas & tips to enhance your product display.
One of the more critical considerations in merchandising is the spacing between items. When items are too close with another, they can get damaged more quickly, and customers may not view them well enough to make a purchasing decision.
Another consideration that I see is important too is lighting. If lighting is too lit, it will not catch the customer’s eye and will likely go unnoticed on your shelves. So always make sure your store lighting is all good.
A viewer’s perspective is also essential. When determining where you should display your products, try viewing them from different angles so you can get an idea of what it would look like for a customer walking into your store or shopping online. Also, make good use of’ centralized display,’ ‘collapsed display,’ and ‘exotic display.’
A centralized display is a department (where you read at DHES formula just now) where a large amount of a single product is gathered together in one place, making it an eye-catching focal point. Another two that you should take advantage of is the ‘collapsed display,’ which utilizes all the available space around it, forcing customers to walk past it or even through it to get to another area of the store. In comparison, the ‘exotic display’ puts products on display in an unusual way, such as suspending them from wires from the ceiling or hanging them from trees outside the entrance to the store. Again, the key here is making them see.
Other tips you can use:
When designing displays, retailers should be mindful of how customers move around in stores. For example, studies show that shoppers tend to walk counterclockwise, so displays near the perimeter help attract customers.
Glass showcases are a great way to showcase your products. They provide a clean, modern appearance that can attract customers.
Display cases and showcases are necessary for displaying art, crafts, and other items. However, traditional display cases brighten up one side of the product. Unfortunately, the customer will not see another side of it. Built-in lighting systems allow for a more even distribution of light throughout the case or showcase, providing customers a better viewing experience as they browse through your wares.
Tabletops with accessories like drawers, shelves, dividers, etc.
Long counters with glass inserts or solid glass fronts can store bowls, plates, glasses, and silverware in the kitchen.
Display by color is one of the most common ways to arrange merchandise to help customers find what they are looking for. For example, if you were selling Tupperware, you could separate them into blue, red, green, etc.
Display by height If your products vary in size or dimension, this can be a great way to make them pop on the shelf and create visual appeal for consumers.
Merchandising In Retail; Signage Product Display & Signage Location
No merchandising work can be declared complete if retail in-store signage is not included. Unfortunately, many retail owners neglected this thing or did not know the impact on your businesses.
Before we go further, you must know that one of the definitions of merchandise is a way to inform and signage project information to customers. Therefore, signage is an essential part of merchandising where it can tell customers about promotions, new arrivals, and so on. For example, if your store is extensive and packed with products, by placing department/section signage, you can inform the customer where they currently are. Or, if you have a new arrival product, placing “New” signage can educate the customer that it’s a section for the new arrival.
The signage product display in retail merchandising helps attract customers and can substantially impact their purchasing decisions. So it makes sense that signage is a critical component and should be included in any merchandising plan. When it comes to signage, there are two types that we typically see in retail stores:
The permanent signage: Permanent signs will stay in place and direct customers to a particular store section—for example, department signage, counter for payment, and fitting room signage.
The temporary signage: Temporary signs will only be used for a designated time, and when times are up, signage will be taken down, such as “we’re close,” season items, and monthly promotions.
It’s essential to have an assortment of signage displays appropriate for the different needs you have in your store. For example, you should have preferred signage designed for your shelves, end caps, and other areas where you want to draw attention to specific products or advertisements. Some sign ideas include:
-Exclusive product displays
-Department for core products
The following are some tips on how retailers can make effective use of their signboards:
Keep it simple – keep your message short and use large lettering, all caps lock
Be informative – make sure your signboard is updated with any special promotions
Be interactive – give customers interactive ways
Merchandising in Retail; Product Rotation
Product rotation is key to a flourishing retail business. Product rotation cycles can help improve customer experience and increase sales, but what is a product rotation cycle, and why is it important?
A product rotation cycle is the minimum amount of time you should have between displays. It keeps the store looking fresh and exciting. Consumers are drawn to stores where they can always find new items on display, increasing their chances of purchasing. While if customers see the same products repeatedly, they become bored, and the probability they buy from you is low to none.
A retailer should have a well-thought-out display cycle for their products. Depending on the store’s location and customer base, the time frame can vary from day, week, or month. A product display time frame defines how long each item will be placed on the shelf. This period varies by store size, location, and type of product. It is up to the retail owner to decide their display time frames but not once a month. I recommended ensuring customers always see new products at least every one-two week depending on the store’s size-wise:
- A good rule of thumb for new/smaller stores is to rotate out highlighted products one-two time per week.
- For big stores, rotate highlighted products from each department once every two weeks. But if you could do it once a week, I’d say power to you. Over time, you’ll see an increase in sales or consistent return.
Create An Effective Merchandising in Retail Plan
Having a merchandising plan is a great way to ensure that your retail store has the best products on its shelves at all times, making it easier for customers to find what they are looking for.
It is crucial to create an effective merchandising plan to make your retail business more efficient and profitable. It is a matter of skill, creativity, and idea simultaneously. It will involve deciding on everything from which direction products should be facing, how many shelves they should be placed on, and so on.
The first step in creating a simple yet effective merchandising plan is assessing the store space. Setting store space is a process of determining where gondolas will be installed in your store. This step is for a new store or store that didn’t have any merchandise planning before.
The second step is to identify what you used for product placing (gondola/ shelving/ fixtures/ rack), which certain section of the rack to highlight a new product. Plus, determine product display sequence (categories followed by brands/ expensive item on the top while cheap on below it/etc.)
The third is to determine the product rotation timeframe. That’s all there is to it.
Conclusion: Understanding How To Effectively Manage Merchandise in Retail Is Your Responsibility
In conclusion, understanding how to manage merchandise in retail effectively is a must if you want to see significant improvement in sales. Merchandise management is a critical area that retailers need to be successful in. A retailer’s success is dependent on the success of its merchandising efforts.
To see boots in sales for your retail business, you need to have a clear understanding of managing your merchandise effectively. This includes everything from the product assortment, pricing, promotion, and display.
A company should also keep in mind that it is about the products themselves and customer experience. If you give your customers an enjoyable shopping experience, they will be more likely to return.