Merchandising is a proven, effective way of increasing sales in your retail store. And all it requires is forethought, preparation, and a thorough understanding of customer behaviour. \r\nThis article will explain the basics of merchandising, how it can benefit your business and merchandising best practices that you can apply to your retail store. \r\nWhat is Merchandising?\r\n \r\n \r\nMerchandising is how products in a store are displayed and presented in order to encourage customers to buy. This includes shelf layout, promotional signage, foot traffic paths and pricing. \r\nWho uses it?\r\n \r\n \r\nBrick-and-mortar retail stores are the businesses that use merchandising the most. Different stores apply merchandising strategies in different ways, even if they sell the same products as other stores in their niche. \r\nWhy is merchandising important?\r\n \r\n \r\nPut yourselves in the shoes of a customer. Imagine you’re going into a store. Products are placed haphazardly, seemingly without rhyme or reason. Toys are on the shelves next to hardware products; canned goods are next to the toothpaste, and so on. Aisles aren’t properly labelled, and the prices on the shelves don’t match that of your promotional flyer. \r\nIt’s impossible to even find anything, much less buy. \r\nWhat do you do? \r\nA smart customer will leave and go to a different store. \r\nCompare this to a store with proper shelving and signage, along with a cohesive merchandising strategy, and you will see a much higher amount of foot traffic and vastly increased sales. \r\nBut let’s be specific. In what ways can a retail store benefit from proper merchandising? \r\nIncreased SalesBetter customer satisfactionMore time in-storeFaster-moving inventoryIncreased customer loyaltyBetter brand recognitionMore effective promotionsIncreased employee productivityMaximized retail space\r\n \r\n \r\nMerchandising affects so many different aspects of your retail operations that it could make or break your business. \r\nWhat are some effective merchandising strategies?\r\n \r\n \r\nLet’s go over some of the most common merchandising strategies: \r\nProduct samples and demonstrations. \r\n \r\n \r\nYou see this all the time in places like Costco, where promoters prepare food samples and hand them out to shoppers to taste. It’s also common to sample beauty products like perfumes, soaps and lotions. The point is to let the customer either try it themselves or see the product in action, so they will be encouraged to buy. \r\nPromotional merchandising (a.k.a discounts)\r\n \r\n \r\nDiscounts are an effective merchandising strategy because it can do multiple things. First, it can draw more customers into the store. Second, it can function as a loss leader to lead the customer to buy more items. And finally, it can help clear slow-moving inventory. \r\nStrategic store design and layout\r\n \r\n \r\nThere’s a surprising amount of psychology and strategy that goes into how retail stores are laid out. For instance, how can you encourage the customer to walk through the entire store? Maybe by putting the most commonly-purchased or most discounted items all the way in the back. \r\nPlan your layout based on what you want the customer to do, and see what kind of floor plan will get you the best results. \r\nPlentiful and clear store signage\r\n \r\n \r\nProper signage and labelling make it easy for customers to find their favourite products. This improves their store experience and increases the chance they will visit your store again. But that’s just half the battle. \r\nClear and enticing promotional signage draws a buyer’s attention and encourages them to investigate. You can use these like breadcrumbs to draw them deeper into the store and past other displays that they may want to browse through as well. \r\nEffective Product Displays\r\n \r\n \r\nOut of all the strategies listed here, product displays are one of the most basic, yet most important, merchandising strategies you should be implementing. There are many subtle tactics you can employ to create enticing displays that they deserve a section of their own. \r\nHow do I Create Effective Product Displays?\r\n \r\n \r\nRetail store product displays are an art form in and of themselves. An effective display can be an invisible yet powerful influence on a shopper’s buying behaviour. \r\nHere are some of the basic product retail merchandising techniques/principles stores use: \r\nEye-level sells the most\r\n \r\n \r\nProducts shelved at eye-level are the ones that sell the most. This is because eye-level shelves are the easiest for buyers to browse, and therefore, the first area buyers look at. Place your top-selling or most profitable items at eye-level and up. \r\nFill the shelves\r\n \r\n \r\nAlways keep your shelves as full as possible, even if it means keeping the entire stock of product out on the floor. It gives buyers the impression that your store has a deep inventory and can easily meet the buyer’s needs. It also has the additional benefit of clearing the backroom, allowing you to keep stock of more items. \r\nCheck your prices—then check it again\r\n \r\n \r\nPay very close attention to the prices on your shelves, especially those items that are on sale. Customers don’t respond well when the checkout scanner and the shelf sticker have different prices. \r\nBeyond that, many provinces have laws regarding scanner accuracy, and so do major retail organizations. Familiarize yourself with these rules and make sure your staff is familiar with your store policies regarding pricing discrepancies. \r\nDisplay items vertically instead of horizontally\r\n \r\n \r\nVertical displays provide a better shopping experience than horizontal displays, because in a vertical arrangement, the shopper can just stand in one place and scan at their leisure. Horizontal displays are harder to scan and it will be more challenging for the customer to find what they want. \r\nIf the shelf is long, like in a supermarket aisle, create “scan zones” where products that are a specific brand or type are displayed in a vertical column that is a couple of feet or so wide. \r\nGroup similar items together\r\n \r\n \r\nCross-merchandising is when you place similar items next to each other to increase the chances that they will be bought together. It’s an effective tactic if you understand the customer’s mindset when they’re shopping. \r\nFor example, a customer that is buying spaghetti noodles is most likely cooking pasta. Therefore, they will need pasta sauce to go with it. That’s why you always see pasta and bolognese stocked on the same aisles. You can do this with other items, like toothbrushes and toothpaste, notebooks and pens, and more. \r\nWhat are retail cycles and how do they apply to retail merchandising?\r\n \r\n \r\nRetail works in seasons, just like real life. Your inventory will change depending on what time of year it is and what holidays are coming up next. For example, Easter involves plenty of chocolates and bunny-themed items and the like. \r\nBut it’s not just products that get cycled in or out: your store signage and layout will change as well,and so will your promotions. These changes often take place months ahead of the actual holiday, so that shoppers have plenty of opportunities to shop before the items are needed. \r\nFrom Concept to Execution\r\n \r\n \r\nEvery retailer that owns a physical store should master the art of merchandising if they want their business to succeed. Seemingly simple and minor shifts in store layout and shelf organization can impact your business in big ways, so pay close attention to any shifts in customer behaviour whenever you change anything. \r\nFollow the merchandising advice above, and your shoppers will come more often, browse longer, and buy more. All the while, letting you move inventory faster and increase profits. \r\nIt’s a win-win-win situation.