What Is Merchandise Retailing? (With Importance and Tips)

By Indeed Editorial Team

Published June 10, 2022

The Indeed Editorial Team comprises a diverse and talented team of writers, researchers and subject matter experts equipped with Indeed's data and insights to deliver useful tips to help guide your career journey.

Retailing merchandise is an essential tool to guarantee the successful operation of a retail store. When store managers use the retailing strategy effectively, they can convince customers to visit the store and purchase their products. Understanding the importance of this concept can help store managers increase the sales in the store. In this article, we explain merchandise retailing, discuss why it's important, state the best practices for this concept, and provide tips that can help store managers retail merchandise effectively.

What is merchandise retailing?

Merchandise retailing is a business strategy that store managers use to attract customers to buy items from a retail store. It's a combination of strategies, like marketing and promotion activities, that store managers employ from the planning stage to the completion stage. The strategy can include how you arrange the merchandise in the store and how the signage can appeal to customers. Managers of large companies can hire marketing experts or retail merchandisers to create and implement marketing strategies. In smaller companies, entrepreneurs or store managers can perform these duties themselves.

Store managers that use retailing strategies may have these responsibilities:

  • Researching to discover the market needs

  • Stocking products that match consumer's demands

  • Arranging the products in a store strategically to attract consumers

  • Improving the store's scenery to improve consumers' experience

  • Giving consumers free samples

Why is merchandise retailing important?

Retail merchandising is an essential part of a store's sales strategy because, when store managers use this approach, it can help them in the following ways:

Increases the store's total sales

When store managers use the retail merchandising strategy effectively, they persuade consumers to buy their products. Convincing consumers can cause a significant increase in the sales they record. For example, a store can add a snacks section beside the check-out spot, and consumers can pick items from the section to complete their purchase. If they come to the store with their children, they can also convince them to buy for them while paying for other items.

Ensures consumer satisfaction

Store managers can use retail merchandising to organize the store properly and ensure that it's visually appealing. A well-organized store can increase consumers' satisfaction because they can easily find the product they want to purchase. Finding the products smoothly can also increase their chances of buying from the store and the satisfaction they get.

Read more: What Is Customer Satisfaction and Why Is It Important?

Promotes consumers engagement

Store managers who use the retail merchandising strategy can promote their customers' engagement. For example, if a store is aesthetically appealing, there are higher chances that customers can record videos or take pictures in the store and share them with their friends or family members. Their experience can also convince others to visit the store to enjoy the same situation.

Increases the store's customers

When store managers use retail merchandising, it can help them increase the number of people that buy products from the store. Potential customers patronize stores with beautiful scenery and organized inventories. Sometimes, when you impress customers with the experience and services, they can also recommend people to visit the store.

Ensures an effective inventory turnover

Customers can easily find products in a store that uses retail merchandising, sometimes even without the help of the store's staff. When store managers divide the products and arrange them properly on shelves, it can lead to a faster inventory turnover. Effective inventory turnover means that the store sells its products quickly.

What are the best practices for retail merchandising?

As a store manager, when you want to use the retail merchandising strategy, you can consider these practices:

Plan the store's layout carefully

If you want to improve customers' experience in the store, you can draw a good layout for the place, as this is essential for enhancing customers' experience in a retail store. When you want to design the store's layout, consider how consumers can move through the items in the inventory. Design a structure that makes the store well spaced and can allow customers to move comfortably through aisles and hallways.

Related: 12 Examples of Organization in the Workplace (With Tips)

Consider the customers' needs

Customers only patronize stores they know have the products they want. Conduct market research and gather public opinion to discover the products that the target audience wants. Knowing the customers' needs can help you stock the store with the correct products that can yield profit quickly. It can also help you organize and arrange the store correctly.

Read more: What Is the Consumer Decision-Making Process? (A Guide)

Keep a well-stocked and clean store

Store managers that maintain a neat store promote a pleasant experience for customers, and this helps them attract more patrons. They may hire janitors who follow a schedule to clean and maintain the interior and exterior of the store. For instance, at the end of the daily activities, these employees might clean the floor, arrange the shelves, and ensure the store is ready for its commercial activities.

Divide the products into groups

Store managers can effectively group products by placing related items in the same section of the store. Grouping items can help customers find products quickly. For example, you can put beverage and food items in the same section and all household products in one part of the store. When store managers group the products in the store effectively, they improve customer experience.

Store managers can also use cross-merchandising strategies to group the products in the store. The cross-merchandising technique involves grouping products that are complementary in the same section. This technique can help you entice or remind customers of these related items. For example, a store can place disposable cups in the same section as drinks. It can serve as a reminder for customers who want to organize parties.

Ensure that the items are easily accessible

When store managers arrange and organize the products in the store, it's essential that they consider how customers can view these items. Some store managers arrange the products on the shelf and keep them at eye level so that customers can see and reach them easily. This helps increase sales because customers are able to see and seize the items they want to purchase. If the shelves in the store are tall, you can keep the popular items where customers can easily see them.

Follow the market trends

As a store manager, you can update your retail merchandising strategy to follow the market trends. The market needs to change regularly, and it's important that stores adapt to these changes. Customers like variety, and their needs can vary. For example, if you're managing a gadget store, you can change your inventory based on the updates from production companies. Most customers may want to get the latest device, so it's important that you're aware of these updates and follow the trend.

Announce store promotions

Organizing promotions or discount sales during festive periods is a retail merchandising strategy that can help to increase patronage for stores. These promotions can help you influence customers to purchase specific items from the store. To do this, you can announce the information on platforms where it can reach the target audience. For example, if the store is offering Christmas discount sales for clothing items, you can put a signal in that section.

Read more: What Is a Marketing Promotional Mix and How Do You Use One?

Tips on how to retail merchandise

As a store manager, when you want to use the retail merchandise business strategy, you can use these helpful tips:

  • Ask customers for reviews: Asking customers for their feedback or reviews is an important way to learn about consumers' demands and adjust the store's operations to match their expectations. You can also ask them to rate the general activities of the store.

  • Provide samples or demonstrations to customers: Store managers can decide to give their customers free samples or demonstrations depending on the product. For example, a gadget store can offer demonstrations to customers to show and teach them how the gadget they want to buy works.

  • Build an appealing store: When creating the store's layout, it's essential that you build an attractive environment that appeals to the primary senses of customers. You can spray signature air fresheners, use beautiful decorations, and play soft music in the background that can help improve customers' experience in the store.

  • Monitor each business strategy: When store managers want to promote effectiveness in the store, they monitor each strategy they use. It can help them discover what to stop and how to improve their operations.

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