Merchandising has become a key tool that retailers use in influencing customer intent and reaching their sales goals.
What is Merchandising – Merchandising Define
Merchandising is the act of promoting goods and/or services which are available for retail sale. It includes the determination of quantities, setting prices for goods and services, creating display designs, developing marketing strategies as well as establishing discounts or coupons. On a broader scope, merchandising may refer to retail sales itself, which is the provision of goods to end-user consumers.
Types of Merchandising
Convenience goods are staples goods that are essential to daily living. These goods are items that are widely available and regularly bought with minimal effort.
Customers do not have to go through a rigorous decision-making process to get one. Demand transfer is also very common with convenience goods, where customers can choose an alternative brand if their chosen brand is not available.
Convenience goods are usually inexpensive and have a low opportunity cost for customers, but has a higher sensitivity to price. In order to make maximum profit, retailers will have to ensure they sell large volumes of convenience goods at a fast pace. Examples of convenience goods include food, newspapers, cleaning products, and personal hygiene products.
Impulse goods are goods which are purchased instantaneously without significant planning.
Impulse purchases are never planned, customers simply see them, pick them up, and simply check out. The most important factors for impulse goods to sell however lies in display and location. If impulse goods are not well displayed or located in unassuming sections of the store, they will be missed.
These products are often displayed at till and check out points in order to entice customers to quickly add it to their purchase. Impulse goods include magazines, sweets, or complementary products.
Shopping products are those products you spent hours researching, and comparing brands before you purchase. These are goods that customers gather ample product information on and compare them with other products before buying. Since they require intensive research and multiple comparisons, these products are often purchased less.
For this kind of product, customers compare a number of alternative brands based on price, quality, and content, etc., before they can make a final decision. This purchase also has psychological and emotional aspects like acceptance appreciation of belonging. Examples of shopping products are clothes, electronics, and furniture.
Specialty goods are goods that customers are prepared to do extensive research for, pay much more as well as travel long distances if need be to buy one. These products also have a much higher cost associated with them, which causes customers to be much more selective.
For specialty goods, customers are often not willing to go with another offer. They will not compare products because they know exactly what they want. Usually, an alternative offering is not acceptable. Specialty products do not need to be conveniently located either, and they include products like luxury cars, expensive alcohol, and service experts.
Here are some of the most popular ways to entice buyers to purchase:
- Samples and giveaways
- Well-stocked shelves
- Shelf signage
- Window and in-store displays
- Grouping related products together.
- In-store ads that feature the merchandise
- Spotlighting promotional items
- In-store demonstrations.
Benefits of Merchandising
With effective merchandising in place, businesses can yield the following fruits:
- Customers who are satisfied
- Increased customer loyalty
- Higher sales margin
- Buyers who spend more time in the store.
- Faster inventory sales.
Merchandising in a broader scope is linked with retail sales where businesses sell products to consumers, and technology, on the other hand, is fast changing the face of merchandising, with electronic point-of-sale terminals to targeted and personalized mobile ads.