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TradeBeyond Article
August 30, 2021
The Many Aspects of Retail Merchandising
What is Retail Merchandising? Retail merchandising can mean many things to many different people. Retail merchandising is an art and science. Decades of customer research driven by the overwhelming economic importance and growth of the retail industry arms retailers with actionable data for effective merchandise strategies and best practices.

This article provides an overview of the retail merchandising basics or said differently, a little merchandising 101. Whether you are new to retail, have been a retailer for years and are looking for new inspiration to outperform the competition, or work for an e-commerce giant, there’s something here for you.

Retail merchandising refers to the way retailers, brands, and other product companies make their merchandise available in stores. The purpose of retail merchandising is to encourage purchases. Successful retail merchandising requires careful planning, implementation, management, and analysis.

Understanding: What is Retail Merchandise?

What is retail merchandise? I’ll break it down to the simplest form. Retail merchandise is any product that you or I may purchase in a store. The exact definition is, any manufactured good(s) bought and sold by any business, whether that be the stock of goods in a store or for online purchase. Did you know there are 4 types of retail merchandise?

Convenience Goods:

These are products of necessity that we cannot do without. This is not in regard to products we love like our phones or our favorite pair of shoes, but more in regard to products which are staples and essential to daily living, like food or personal hygiene products.

Impulse goods:

These are classified as purchases that are never planned – customers simply see a product(s), pick them up, and head to checkout. Most of the time these products are located at or near the checkout counter.

Shopping Products:

For these, one might spend hours researching a particular product and comparing brands before he/she makes a purchase. Basically, these are goods that customers want ample product information on and have the ability to be compared to other brands based on price, quality and content, etc. before making a final decision. Examples of shopping products include clothing, electronics, and furniture.

Speciality Goods:

These are products that are usually found in another locale that you might travel longer distance to purchase. The stores are known as a Specialty stores which carry Specialty goods. For Specialty goods, customers are prepared to do extensive research and pay much more as these products tend to have a higher cost attached to them, causing customers to be much more selective. Examples may include expensive alcohol, cooking ingredients, health and wellness supplements and luxury cars.

Understanding: What is Retail Merchandise?

What is merchandising in retail? Since this is retail merchandising 101 I’ll keep it pretty light and less complex. Merchandising basically refers to the way products are displayed in your store, otherwise known as retail store merchandising. This is well after the planning stages, as in, when the goods actually arrive at the physical stores. For example, the “look and feel” of the overall store, the way the store is laid out, and the actual merchandise displays (racks, window displays, table displays, etc.) make all difference. Good retail merchandising helps to attract customers through the doors. As a result, you’re directing customers to the everyday goods they’re looking for and grabbing attention to the highest-profit products and impulse products to keep them in the store longer, hence the term, “retail store merchandising”.

Things to consider as you discuss retail store merchandising:

1.) What Products to Highlight?

For example, the most profitable, best-selling, newest, or most unique products are typically the focus here. The products you’ll promote will change from season to season, week to week, and sometimes, day to day. So, identify which products you want customers to hone in on.

2.) How Do you Want Customers to Move Through the Store?

For example, the store layout. A store of product racks and overflowing shelves will attract people who like to hunt for bargains. As a result, a sparse, minimal store will highlight well-chosen, high-end items. Most retailers will want something in the middle, with a well-organized store. This conveys abundancy without an overwhelming product selection.

Use your store layout to guide customers to the products you want them to focus on. Depending on your space, you can lay out your store in a grid with aisles, a loop format with a circular path throughout the store, or even a “free form” layout that appears haphazard.

Retail Merchandising: Assortment Planning

Assortment planning is key to starting out your retail merchandising plan. It’s about making the right product picks and ordering the right quantities to match market demand. These decisions, otherwise known as the merchandising basics, affect both retailers and manufacturers supplying them and tend to start during the assortment planning or range planning stage. Assortment planning starts by selecting a group or collection of various or different things to fit inside a particular category.

When retailers plan assortments, they’re planning which products might fit into a category during a period of time. For example, you’ll highlight summer toys in spring and summer instead of in winter. The buyer or category manager will focus on pervious summer toys that always sell well, but also focus on anything new and exciting. After all, it’s the new and exciting options that will attract new customers to shop the store and category. In today’s world of retail merchandising, the shopper expects to find new and unique items weekly, monthly, or seasonally.

The broad selection of goods in a planned range or theme will eventually get whittled down to the final selection before being ordered, shipped and handed over to in store merchandisers

In store merchandisers – An in-store merchandiser is a person responsible for the display of products in a store or online. Basically, someone that might plan how the products are displayed on shelf, endcap or the position of a sale item inside the store.

So Why is Assortment Planning Important?

I touched upon it a little bit above. Retail buyers and merchandiser are constantly on the hunt for new customers, just like customers are constantly on the hunt for new or unique products. Good retail merchandising includes many of the top selling products that are constant in the category, but also introduces new products into the assortment to not only attract new customers, but to increase more opportunities for impulse buys. Assortment planning is invaluable in optimizing your retail store for the highest conversion rate which boils down to the strategy and execution of the retail merchandising plan.

Retail Merchandising:
Theme Planning

Merchandisers and buyers collaborate together on the annual calendar that includes events, holidays, and visual themes to merchandise. This part of the retail merchandising plan often takes place in weekly and/or monthly brainstorming sessions, which can be exhausting. However, a visual merchandising calendar will save time so you will know which products to source sooner and which products to keep an eye out for that can be used on projects at a later date. It will also allow your team to work together with more forethought.

Merchandisers usually start with a list of public holidays to start the merchandising planning sessions and bucket each into the four seasons (Winter, Spring, Summer and Fall). That said, it can get a little more complicated once you start incorporating some specifics to your local area, such as: if you live in a warmer climate you might only experience two seasons like wet and dry or rainy and sunny. Seasons can also indicate the seasonal growth of a particular fruit, vegetable, flower or plant. You can use the different seasons as your category display theme – just remember to keep it timely and relevant.

Large special events are another part of the theme planning process. For example, specific regions could have their own special events which are important to celebrate. For example, during the Boston Marathon, merchandisers who are planning themes for stores in this region might look at products, colors and materials associated with running, exercise, clothing and the overall marathon theme. Other themes to take into consideration are elements of nature. Get inspired by the places you love to play, like national parks, rivers, trails and draw on inspiration from the things we see outside every day such as trees, grass, butterflies or mosquitoes. The possibilities are endless!

When planning themes there are no wrong answers. At the end of the day it comes down to what buyers and merchandisers can put in the hands of in store merchandisers. This dictates what will bring customers into the store and what they’ll purchase. Depending on the category, arts, design, typography, painting, graffiti, sculpture, photography, and retro art are some possible themes. Some merchandisers also base themes on movies and literature. How many thousands of movies have you seen? How many popular novels, poems and stories do you know? You can use this to think of a new product theme. Think about popular novels and poems written by your favorite author(s) then use them as your new product theme. Other themes to incorporate are lifestyle, celebrities, urban streets, road trips, luxurious outdoor settings, the birthday of the queen, and royal weddings are other popular themes that have had success.

But wait, there’s more… International observances are other themes to consider. There over 300 different observances that are recognized in the world. Most of these international dedications are observed on a specific day every year like World Teacher’s Day every October 5th and Friendship Day every July 30th. Some are observed in a particular week and some are observed in a specific month, like Breast Cancer Awareness Month every October. We all experience creativity blocks, so keep in mind that annual theme planning will help your ideas flow better so that you can successfully source new and unique products that will bring customers into your stores.

Retail Merchandising Tips

Merchandising 101 is such a large concept to grasp, that it can be hard to know where to begin. In this section, we’ll give you some retail merchandising tips that will round out the merchandising basics and make getting started easier and more visual.

You’ll want to start with the category, your brand, and the story you want to tell. What does your brand stand for? What message are you trying to get across to your customers? What are your values? Are you a fun and funky brand or are you a little more sophisticated and formal? Answering these questions will help you write your brand story and find the right new products to fit your customer needs in a relatively quick timeframe.

This story should be evident in all of the decisions you make about product selection, store layout, display styling, and many more aspects of your business far beyond the scope of retail merchandising. In almost all cases, this story will be built around your company’s value proposition as well as the key qualities that make your business different from competitors. The same can be said for your target customer. The ideal buyer should be at the center of all retail merchandising decisions you make. You need to understand their ideal customer experience and do your best to create it.

To get started, put yourself in shoes of the type of shopper you want to court. Before you were a retail buyer, category manager, or even in retail merchandising, you were a customer. Think of about your ideal shopping experience. What did you expect when you walked into a store? Chances are your expectation aren’t that much different than those of your customers.

Next, think about complementary products. This is the part of the retail merchandising process that most merchants do without even realizing it. The products you stock should make sense together. This helps give your store a clear identity that’s easy for shoppers to understand and remember.
Mixing product styles dramatically only serves to confuse shoppers. For example, if you’re a children’s toy store, are you going to sell bird cages? Probably not, because it wouldn’t make much sense.

Stick with a theme and be consistent for the best results in your retail merchandising. You can always evolve this theme over time based on customer demand, but you don’t want to stray too far from your category identity.
Similarly, you’ll want to organize your products into logical groups. This can be as basic as having a boys and girls section, but we recommend going at least one level deeper than that. Continuing with our toy store example, this would mean having separate sections for board games, outdoor fun, physical sports, and video games.

You can be more creative with your groupings as long as it makes sense to your customers. You often see this approach with sporting goods stores that organize their merchandise by sport.

Organizing your merchandise in this manner eliminates doubt and questions in the shopper’s mind, which is often a huge barrier to making a purchase.

As with your broader retail merchandising strategy, you’ll want to keep your ideal customer in mind. Try to source products that create an experience that caters to the customer’s unique personality and values. Look for products that keep the retail store merchandising fresh and unique. Plan products that might pleasantly surprise the customer and keep them coming back for more surprises in the category.

Wrap Up

At the end of the day, a retail merchandising strategy is one of the most effective tools at the center of a retailer’s plethora of options to alter design, launch products, scale, add to category assortments, and to build a successful business. And while this article is more about the merchandising basics, most retailers will begin to see returns on their strategy simply by applying a few of the retail merchandising tips and techniques I’ve outlined in this article.