More and more stores are opening up to fulfill consumers’ ever-shifting wants and needs, which can make competition fierce. With the right strategy for merchandising, businesses can create a one-of-a-kind and dependable system that gets customers talking about their items and keeps them coming back for more. To accomplish this, it is helpful to first formulate a strategy; in this case, a retail merchandising strategy, similar to those used when developing marketing plans and store layouts for traditional brick-and-mortar establishments. E-commerce, visual, and online merchandising strategy are the topics that will be covered in this article.
But before we go into the strategies employed in merchandising, let’s first define the term and see what it entails.
What is Merchandising?
Merchandising is a marketing and sales strategy for promoting goods at retail establishments and influencing consumer behavior to increase sales. It is an important aspect of retail management because it makes things visually appealing to shoppers in a physical or online store.
Storefront and in-store marketing plans may take variables like product placement, quantity, price, and customer traffic into account. Therefore, it guarantees higher sales by improving the appearance of the merchandise for sale. The basic idea is to exhibit and sell products in novel and interesting ways to entice buyers. This makes it much simpler for businesses to achieve their revenue goals.
What Are the 4 Types of Merchandising?
Depending on their approach, retail establishments can be classified into various categories. But here are a handful that will help you get the idea:
#1. Product Merchandising
Promotional events are used by both brick-and-mortar retailers and e-commerce websites to boost product sales. It focuses on showcasing tangible or intangible goods in a way that encourages buyers to part with their cash. This strategy may include things like including product photos on the website or using proper packaging.
#2. Digital/E-Commerce/Online Merchandising
In contrast to physical establishments, it can be challenging to evaluate the quality of products sold online. As a result, e-commerce sites optimize their pages for speed and present all pertinent data next to their wares. In addition, they have a prompt and helpful customer support department to deal with any issues that may arise. Social media and email marketing are two other methods of promotion. This helps build confidence in and loyalty to digital platforms among consumers.
#3. Visual Merchandising
Retailers showcase products by showcasing their designs, packaging, benefits, and additional information (such as price and sale status) to drive immediate purchases. The most effective tools for making this strategy effective for driving up product sales are advertising banners and signage. Space, color scheme, lighting, site design, online movies, and so on are some more presentational components employed by both brick-and-mortar and virtual shops.
#4. Retail Merchandising
The term “point-of-purchase” marketing describes the methods by which goods are displayed for sale in traditional retailers. Orderliness is just as important as the demeanor of salespeople when it comes to the display of products in a retail setting.
How Does Merchandising Work?
When a customer walks into a store, their eyes are the first sensory organ to activate. Therefore, it is essential to maintain order in order to present products in the best light. Products with a better aesthetic appeal will stand out to customers more than those that are haphazardly arranged on shelves. Shelf-signage advertisements and freebies are other methods used to encourage customers to buy products on display.
Also, consumers’ attention is often drawn to a product’s pricing when it first hits the market. The price is set by how much it costs to incorporate all of the production variables and various strategies used to create the product. Having the goods arrive at the store in attractive packaging is a surefire way to boost sales. It’s one way to put the retail strategy into action. The next stage is to hang up sale banners, which will draw customers to the sale aisles and encourage them to make impulse purchases.
Online consumers have to be able to judge whether or not to buy something based on what they see and other information like price, material, and ingredient lists. When making purchases online, nothing is more important than having access to responsive customer care.
What Are the 5 R’s of Merchandising?
Retail merchandisers have utilized the five R’s framework, or a variant thereof, to guide product development, evaluation, and presentation for more than a century. The idea still works for modern online stores. The merchandising department’s job is to make sure that customers always have access to high-quality goods that suit their tastes at a reasonable price. Here are the 5 R’s of merchandising.
#1. Right People
In this context, “the right people” are your target market’s demographics, psychographics, purchasing behaviors, political leanings, and pain points. With this knowledge, e-commerce enterprises can personalize everything from the products they offer to the pricing they charge and the discounts they offer. The following is a case in point. Consider a store that specializes in secondhand vegan clothing. The brand may have found its niche in establishing the authenticity of vintage clothing that was made with the target demographic in mind.
Ultimately, that narrowed focus would modify the offerings, advertising, and description.
#2. Right Product
Having “the right product” means focusing on what your target market wants and needs so you can maximize your sales.
In the context of online shopping, “the right product” is one that the retailer can make a profit on, one that will sell quickly enough to keep up with demand, one that complements existing offerings, and one that comes from a supplier they can put their faith in. Everything about this product works together to make it a winner.
#3. Right Quantity
“The right quantities” refers to the ideal level of stock kept in distribution centers close to potential buyers.
With the help of inventory tracking data, sales information, warehouse cost analysis, and other tools or models, a well-merchandised e-commerce business will know just how much of a given product to keep on hand at any given time.
#4. Right Price
The specifics of a pricing plan often change as a company expands or contracts. In many cases, the proprietors or managers of smaller businesses will calculate or estimate each pricing individually.
Corporations typically use a convoluted pricing structure. The point is to have a method in place for determining base rates, as well as discounts for specific groups of customers and specific time periods.
#5. Right Time
Most people are willing to pay more for an umbrella on a rainy day. Some may even offer up to $90 for a sweater during winter. The ‘right time’ here means having the product available when it should be. For instance, products advertised as “Valentine’s Day” but released in March are not available when they should be.
What Are the 4 Rules of Merchandising?
The rules of effective merchandising govern how products and brands should be categorized, displayed, and ranked in order to maximize sales, both directly and indirectly. The layout is strategically planned to attract customers and highlight products merchants and manufacturers want to move.
However, adjusting and replacing display fixtures (such as racks, shelves, store windows, and showrooms) in physical stores. Websites for both brands and retailers can benefit from adhering to merchandising rules that dictate how and where new lines, sales, and other products should be displayed to maximize the likelihood of a visitor making a purchase. Here are the rules for merchandising.
1. Be sure to use extensive language on product labels. If you want relevant search results even if you don’t use the precise terms in the text, your product tags need to include synonyms. Because it is based on the content of images, visual AI can also be used to create more user-friendly product descriptions.
2. Update the look of your website with rotating collections. Depending on the merchandising standards you establish, you can give your customers a constant stream of fresh options. You can categorize them by price, color, and so on.
3. Combine discounted items to maximize savings. Smart merchandising allows you to combine products strategically or increase targeted discounts to stimulate impulse buys.
4. Personalized search results are highlighted. You may push accurate and relevant items that capture shoppers’ individual tastes with the help of the correct merchandising technology by including data on real-time intent and context.
What is Merchandising Strategy?
A merchandising strategy is the design and implementation of activities to maximize the revenue of your online store and improve customer happiness. It may have features like upselling, cross-selling, promotions, sales, limited-time deals, and product suggestions.
Furthermore, the success of your online store’s merchandising strategy depends on your ability to anticipate and cater to the changing wants and demands of your customers. You want customers to have a one-of-a-kind, tailor-made shopping experience that exceeds all of their expectations and makes them eager to return.
Also, read RETAIL MERCHANDISING: Importance and Best Practices.
If done correctly, this effort can have a big impact on your e-commerce site’s success. Using a purposeful merchandising strategy effectively, you can set your online store apart from the competition, boost sales, and raise your return on investment.
Why You Need a Merchandising Strategy
There’s no way anyone runs online stores, and their conversion rates could stand some work. However, they were also realistic enough to know that they would need a solid plan to achieve their objectives.
To successfully guide your online customers, you need to think like a leader in your business. A well-planned strategy for online retail merchandising can help you achieve the following goals.
#1. Increases Income
Using merchandising strategies, you may make your online store not only more inviting but also more likely to elicit a purchase from your target audience. As the attention span of the average consumer continues to decrease, it is more important than ever to be able to quickly grab shoppers’ attention and provide them with the information they need to make informed purchases, whether they are in a physical store, on social media, or on a retailer’s website.
Also, in order to entice online shoppers to make a purchase before leaving your site, you can use time-sensitive promotions like these. In order to maximize exposure, it is best to have a comprehensive approach that accounts for the fact that users’ search results pages will vary depending on the terms they type. Banners, dedicated offer sites, and other visual marketing tools can all play a role in the success of this tactic.
#2. Increase Your Level of Rivalry
To attract more shoppers and, perhaps, convert them into devoted, loyal customers, your in-depth merchandising strategy must set you apart from what competitors provide.
Is there a way to tell them apart? One approach would be to research the market to determine if there is an opening that rival businesses are missing. Using strategic retailing, would you be able to fulfill that demand? Perhaps you could create a limited-edition set, or upsell a superior accessory.
#3. Boost Your Customers’ Satisfaction
Providing a fun and simple purchase process from start to finish might give you an edge over the competition. Customers who land on your site but are unable to quickly locate what they’re looking for are likely to abandon it, perhaps with only part of their shopping basket complete. While having the proper products or new products is essential, an efficient user experience is just as crucial to the success of any merchandising strategy. A successful user experience and excellent visual merchandising can do wonders for your bottom line by helping customers quickly find what they need and make purchases with minimal effort on their part.
If you’re running a Black Friday sale on multiple items, for example, you’ll want customers to have an easy time locating the sale items. Users may quickly evaluate options and make purchases when presented with eye-catching imagery, a well-organized layout, and a simple search bar leading them directly to the products they want.
#4. Improve Your Decision-Making Skills
A successful merchandising strategy is a successful plan. Customers spend money, which is good for your business because it means you’re getting closer to your growth goals. However, success isn’t just measured by rapid expansion. When you have the correct plan in place, you can use the sales data and consumer behavior information you collect to inform future decisions. Then, you may act decisively to further your success by adjusting your product mix, pricing, and placement.
Overview of the Best Merchandising Strategy
Effective merchandising plans allow stores to maximize profits and boost sales. The following are some of the most effective strategies that companies can use to draw in and keep customers.
Think about using these strategies to boost online sales and return on investment.
#1. Take Into Account the Customer’s Experience
A customer’s journey is the sum of their experiences with a company’s goods and services. Some shoppers, for example, like to try things out in person before buying them.
Stores can take advantage of this by arranging their displays in such a way that customers can interact with the products they sell. Customers can take an active role in the decision-making process, and the company can rest assured that they will be happy with their purchase as a result.
#2. Promote Authenticity and Creativity
Business leaders need to figure out how to tell a story about their company’s beliefs and mission through the features of their product. Consumers can learn more about a company’s brand by observing details like special packaging or a brief message on the product’s label.
Management may also use social media to show off their voice and personality. This can strengthen customers’ emotional ties to a company’s brand, which in turn increases brand loyalty.
#3. Find Out Why Potential Buyers Don’t Purchase
Knowing what customers value most and find most compelling about your product is crucial. In some cases, though, knowing why people don’t buy is much more important. Is it because they feel a stronger connection to a competing brand, they are unable to find the information they require on your packaging, or they decide not to make a purchase at all? Fixing leaks in the sales process will be easier if you have the answers to the following questions.
Look at your product, packaging, and display methods before making any modifications to your retail merchandising approach. How active are they? Entertain? Educate?
#4. Promotion of Prime Display Areas
Visiting a storefront isn’t always enough to guarantee a successful shopping trip. Perhaps you’re making it, but you realize your product could really shine in a different setting. You’re definitely right; research conducted at The University of Chicago found that rearranging the vertical placement of bottled juices resulted in a 79% boost in sales.
It takes confidence to ask a store to put you in a more prominent location, but if you have a quality offering and solid sales figures, the merchant may give in.
Also, compare your percentage of shelf space to your market share. Discuss the discrepancy between your market share and shelf space with the retailer and ask for more space or a better location.
#5. Examine Current Merchandise Markets
Firms can gain an edge over less-informed rivals by keeping tabs on the latest developments in retail merchandising.
Influencer marketing and ethical brands, for instance, are expected to grow in 2021. These shifts have important implications for the merchandising strategies of clothing stores.
Marketing departments can use social media to find influential users whose tastes align with those of the company’s clothing line and pay them to promote the line. Alternatively, the business can update its production methods to incorporate more moral principles and educate customers about the shift.
#6. Avoid Out-of-Stocks
A company’s financial line and customer base can take a hit if it frequently runs out of stock on specific products. If an item is out of stock, the store loses money and the client is more inclined to shop elsewhere.
Inventory management software gives businesses more visibility into their stock levels. Managers may keep tabs on stock levels in real-time with the help of these cloud-based technologies and be notified immediately when a product is running low. In addition, this will aid stores in keeping their stock at just the right level at all times to suit customer needs.
#7. Maintain Cooperation
Though you are likely well aware of this, let me remind you. Visits to stores should be timed such that a manager or buyer can assist you. Keeping in touch with them demonstrates that you care about the success of both your product and theirs. When you’re not around, they act as your extended sensory organs. If you genuinely care about their business, they will feel the same way about you and your product and will be more willing to promote it to their clientele.
Consider three store owners or managers who you’ve been meaning to contact. Now is the time to pull up your calendar and set up site visits and/or phone conversations with them for the coming week.
Despite the fact that retail merchandising has many moving parts, it need not be complicated. The more you improvise today, the more work you’ll give yourself in the future. Spending some effort upfront laying the groundwork for effective retail merchandising will pay off in the long run as more customers choose you over the competition. If you follow these seven guidelines in every account, you will perform flawlessly.
What Are the 6 Basic Steps in Retail Strategy?
Planning strategically is a methodical endeavor. That’s why it’s defined by the steps businesses take to develop their marketing strategy and get everyone on the same page about what has to be accomplished.
Retail planning solutions allow companies to more effectively manage stock, run promotions, and organize their supply chains. In order to be successful, businesses need to do more than just plan their products; they need to prepare their marketing strategies as well. Cross-channel marketing is a method of promoting a product or brand over multiple channels simultaneously in order to increase sales, brand awareness, and operational efficiency. Here are the 6 basic steps in retail strategy.
- Establish objectives
- Conduct a Study on the Market
- Examine the Behaviour of the Customers
- Overview Marketing Strategies
- Create Some Short-Term Plans
- Integrate Ideas
Visual Merchandising Strategy
First impressions are crucial, as we are all well aware. They could determine whether a store gains a new consumer or loses a sale. Your shop should always look its finest and provide an accurate depiction of your products. This calls for a well-developed visual merchandising strategy on the part of the store.
Every plan from window decorations to product displays to in-store advertising is part of visual merchandising. The first step in connecting with customers that visit your brick-and-mortar store is to make their shopping experience enjoyable. Learning and using design principles is a simple way to make your store more appealing to customers.
What is Visual Merchandising?
Visual merchandising is a popular retail strategy in which merchandisers create floor layouts and three-dimensional product displays to organize and showcase products and increase in-store sales. Merchandisers will typically put similar products together and utilize signage to highlight their features and benefits.
However, merchandisers at larger companies collaborate with retail marketing teams to create product displays that are consistent with the brand’s image and rules. Independent retailers, on the other hand, have more creative freedom and control over their displays.
Why Use Visual Merchandising?
A company’s mission and core principles can only be communicated in so many ways. In addition to brand recognition and strategic advertising placements, the way a company portrays itself can have a significant impact. Visual merchandising describes this type of display.
Customers are influenced more by the store’s ambiance, layout, and design than by any other environmental component, including customer service and promotional efforts.
Effective visual merchandising strategy can draw in customers and encourage them to make a buy. Visual merchandising strategy also helps your brand stand out from the crowd by giving it a unique identity.
Everything a customer sees, from the storefront to the fixtures inside, should cohesively represent your brand. Signage, store design, lighting, color schemes, product placement, digital displays, and pretty much anything else your customers can take in with their eyes are all examples of visual merchandising.
While the purpose of a visual merchandising strategy is not just to improve the store’s aesthetics, but rather to promote sales, brand awareness, and market share. Visual merchandising is an integral aspect of the marketing strategy of the most prosperous corporations.
Overview of the Best Visual Merchandising Strategy
Beautiful product displays that entice more window shoppers to make a purchase don’t have to cost a fortune to put together. The key is to employ the following strategies for visual merchandising:
#1. Find out about the personality type of your ideal consumer
Successful visual merchandising and product displays begin with a deep familiarity with one’s intended audience.
Knowing their age, income, and level of education isn’t all we mean. Learn more about their motivations and preferences by delving into their psychographic details, such as their income, education level, and occupation.
Start by reviewing the information about your customers (particularly their purchase history) stored in your point-of-sale system.
#2. Inspire yourself
The internet provides an almost infinite pool from which to draw ideas for retailing. Before you begin designing your displays, you may find it helpful to peruse the following materials featuring examples of engaging product displays from various retail establishments:
- Make a Shop Online
- Informed Shopkeeper
#3. Expose products to as many people as possible.
Naturally, food markets and supermarkets provide excellent locations for this form of visual merchandising strategy. Food and drink of all kinds surround you from the moment you enter the store until you reach the register.
However, a skilled visual merchandiser, likewise, will try to find ways to show as many products as possible to buyers without overwhelming them. Customers can see more merchandise in less time if store displays have focal points and are of varied heights.
The “Rule of Three,” which states that groupings of three are more eye-catching and remembered than any other number, can be useful in preventing the space from getting overly cluttered. The “Pyramid Principle” takes this one step further by arranging things in a triangle with the biggest thing in the middle and the smaller ones on the outside.
#4. Utilize the Vibe of Your Shop
Keep in mind that the window is just one small aspect of the larger whole that is your store’s interior design and branding when you’re creating your window display.
Here is an instance of effective visual merchandising from the New York City store and cafe Saturdays NYC. Their name pretty much sums up what they do: they sell clothes that pay homage to surfers and their boards. In their Melbourne, Australia shop, they proudly display what sets them apart.
E-commerce Merchandising Strategy
In 2019, 14.1% of all retail sales occurred online around the world. This number is expected to grow in the future. eMarketer forecasts that by 2023, this share of global retail sales will have increased to 22 percent.
It’s easy to see why internet buying has become so popular. Many people are intrigued by the prospect of having a product delivered to their door the next day after placing an online transaction. This is especially true if you are unable to physically visit a store or if the item you sought was unavailable.
As more and more online stores pop up, existing ones must up their game if they want to retain clients. E-commerce merchandising strategy is a key component in attracting customers’ attention.
What is E-commerce Merchandising?
You have shopped at an e-commerce store if you have ever bought anything from an online store. That’s right; I’m talking about an online retail establishment. Merchandising in online stores refers to the methods used to promote and sell items to customers.
However, an e-commerce or online merchandising strategy entails a wide range of tasks, including branding, product placement, captivating imagery, and coming up with novel ways to present products. In e-commerce, the holy grail is a “add to cart” button. Customers’ actions can be tracked in real-time. Customers are subtly pushed toward making a purchase through the use of ingenious merchandising methods in online stores.
Despite the long history of online retailers, it appears that people still prefer to shop in physical locations.
The Role of Merchandising in E-commerce Sites
Due to the rise in popularity of e-commerce, effective merchandising is more crucial than ever before. Many websites now use e-commerce merchandising to try to attract customers by displaying products in an easy-to-understand but visually appealing way.
This method of showcasing products is essential not merely for the aesthetic and usability of the website, but also for the conversion of site visitors into paying clients. E-commerce merchandising can affect consumers’ purchasing decisions by presenting them with carefully positioned calls to action (CTAs), reminders for abandoned shopping carts, and “order again” buttons.
Retailing in the digital age has the potential to:
- Assist the company in showcasing its wares.
- Entice customers.
- Make potential buyers into actual ones.
- SEO-optimized listings are a certain way to boost website traffic.
- Spread the word about some goods and discounts
Overview of the best E-commerce Merchandising Strategy
More and more online marketplaces are springing up daily. Everyone is trying to cash in on the popularity of buying online. Therefore, in order to differentiate themselves from the competition, it is crucial for businesses to consistently enhance their e-commerce or online merchandising strategy. Here are the best strategies that retailers can use:
#1. Mobile First
Today, people can’t live without their smartphones. It’s as if the phone were an extra limb. By 2021’s close, it’s expected that over 73% of all e-commerce sales would occur on mobile devices. Your e-commerce system, then, absolutely must be mobile-friendly and compatible with smartphones.
Also, mobile apps have become increasingly popular in recent years, and for good reason. A mobile app is a huge competitive advantage for businesses nowadays. Mobile app sessions convert at a rate 157% higher than mobile web sessions. If you don’t have an app, you need to make sure that your website works well on mobile devices as well as desktop computers.
#2. Create a Nice Website
Customers’ initial impression of your brand online will likely be its homepage. Not to mention, the importance of making a good first impression.
Large images, graphics, movies, and any other media that will attract the customer’s attention should be featured prominently on the site. The interface needs to be simple and straightforward. Think about the structure, then collaborate with designers who can make a straightforward, compelling, and mobile-friendly landing page.
You need to:
- Highlight your best-performing items.
- Advertise items that are currently popular.
- Make category-based drop-down menus readily available.
- Highlight top-rated items.
- Add predictive search to your site’s search bar to make it more useful.
Consider Bliss as an example. They offer numerous options for facial and overall skin care. The focus of their website is, naturally, on their wares, both old and new. This carousel of items is optimized for viewing on desktop and mobile devices alike thanks to its small initial display (only four products) and the ability to swipe to the right or left to reveal further products. A savvy strategy for merchandising that allows customers to see more options.
#3. Focus on the Visual Aspects of Your Brand
Voice and visual presentation are crucial components of brand identification. Merchandising strategy for online stores places a premium on getting customers interested right away and keeping them engaged with your site for as long as feasible.
As a result, it’s crucial for companies to improve the aesthetics of their home pages. The homepage as well as the sections dedicated to individual products require graphic merchandising. Some companies have tried out using demonstration movies and 360-degree images to show off their wares. Companies offering their services in the form of a “Platform as a Service” (PaaS) may use such demonstrations in place of a physical product.
Many competing companies are eager to connect their domain to their social media profiles. This helps with search engine optimization (SEO) and rankings, and it also gives customers a deeper look into the company.
They can see what other buyers’ experiences have been like with your merchandise. The social proof theory implies that people are more likely to make a purchase after hearing positive responses and reviews.
You need to:
- The homepage should feature a minimum of text and a lot of visuals.
- Put in some sample videos.
- Include a feed of your social media updates on the main page.
- Capture stunning images of your wares.
#4. Provide Individual Suggestions for Purchases
To illustrate, imagine a consumer searching your online store for a hat. When they spot a cap they like, they visit the product website to learn more about it and see visual representations of it. An image slider displaying related or complementary items that go well with the headgear appears below it. Such as a pair of complementary gloves. They decide to buy the hat and gloves because of your advice and add them to their shopping cart without ever trying them on.
You may take this one step further by adding a “items we think you’ll love” section to the website. If the customer is logged in, all of this information is based on what they have clicked on or purchased in the past.
Since you already know what your clients are most likely to buy, remarketing via email and SMS can be useful here as well. To get them back to your site, you may then send them emails and SMS advertising your newest deals and products.
Conclusion
The ability to define corporate goals and be competitive in a volatile market is dependent on a careful retail merchandising strategy. Without a strategy, stores risk wasting time and money on unproductive forms of promotion. A retail business’s bottom line might benefit from a well-thought-out retail plan if its employees are all pulling in the same direction and providing customers with exceptional service, goods, and experiences.
Merchandising Strategy FAQ
What Are the 6 Ps of Merchandising?
Deloitte found in their annual CMO survey that in 2019, marketing budgets averaged roughly 10% of sales. Most businesses spend the majority of their funds on fixed operating expenses like raw materials, production, personnel, and utilities, making expansion difficult.
Whether you’re running a multinational conglomerate or a local mom-and-pop shop, you need a marketing strategy that covers all your bases. The 6 P’s of marketing are the foundation of any successful advertising campaign:
- Product
- Price
- Place
- Promotion
- People
- Presentation.
What is merchandising in media?
Media merchandising is the process of developing, promoting, and selling consumer goods that are associated with a specific media property or brand. Merchandise like toys, clothes, and memorabilia can be made and sold after a film, TV show, book, or video game has become popular. Also included in this category is the production of VR content and interactive web pages.
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