Buyers and sellers have always entered into dynamic relationships whereby the former was focused on providing enough value to make the sale and the latter was focused on understanding if the value was worth the buy. What we see today as new merchandising techniques are simply fresh takes on what has existed for millennia. For them, constantly creating new chocolates, discounts, and enticing displays will not be as important as making sure they have a strong merchandising strategy for the months of October, November and December.
Additionally, what merchandising is and what form it takes depends quite a bit on the variety of geography and of the products and services themselves. So while the fundamentals of merchandising will remain the same, the strategies and techniques of the practice will change.
This can include changes in the following, among others:. Lastly, no discussion of the basics of merchandising can be complete without mentioning the merchandising supply chain. The display of the products at the retail store must entice the customers. The merchandiser in coordination with the store manager must ensure that the products are according to the season as well as latest trends.
By mid of August and early September, the summer merchandise is generally on a close out and stores begin stocking merchandise for the winter season. Warm clothing, full sleeves apparels, jackets, pullovers start replacing cut sleeves, capris, ankle length dresses, shorts and so on.
Colourful clothes dominate the shelves as compared to the subtle colours in summers. A Reebok store in Central India or Southern India would stock summer merchandise between April to September whereas a retail store under the same brand somewhere in a cold area would source woollen merchandise along with summer clothing as per the demand of the season.
You might just restock the mascara you had been selling through for the last few months, but you check the Amazon best sellers page again and see that the same mascara brand has come out with a new version of the mascara you already have, and it is moving up in the best seller charts. You decide to order the new mascara, placing you ahead of the curve, and ready for the next wave of demand.
Gather a small group of potential customers in your area to get feedback on different products and product categories in exchange for cash or a gift card compensation.
Consumer panels and focus groups are great for offering fast and actionable feedback at a relatively low cost. They also offer insights into longitudinal customer attitudes, as they tend to survey the same people several times over a long period of time. They will also give you more information than a survey, and you will be hearing directly from your customers unlike when looking at broader industry trends.
Consumer panels and focus groups offer different benefits and drawbacks. Take a look at this article comparing focus groups and consumer panels to help you determine which option will be better for you. Take a trip to competing stores to see what products they are stocking.
Be sure to pay attention to what products seem popular, as well as what products are being marked down. Also visit retail websites to see what products they have available online. Read reviews to see what kinds of products customers are most satisfied with. Also check out social media sites to see which products other retailers are actively promoting. A common mistake many retailers make is only purchasing products that they personally would wear or use.
Stocking products based on measurable product feedback, trial and error, and industry trends will be far better indicators of good product selection than your own personal taste.
When I ran my boutique, we regularly stocked items that I did not like and would never wear myself. I quickly learned, however, that I cannot base customer taste on my own preferences as all those products I disliked flew off the shelves, and sometimes even demanded a restock.
You truly never know exactly how a product will perform until it is in your store. Buy a smaller quantity first to test the waters. Constantly track how each product is performing in your store. Track how quickly each item is selling, but also look at profit margins, sell-through rates, and category sales to determine which products and general product categories are bringing in the most revenue. You can keep track of these data points manually with a pen and paper system, or you can opt for an integrated POS system like Lightspeed to give you real time sales data.
Learn more about different retail data analytics and how to put them into practice. Your pricing needs to be attractive and competitive enough to motivate shoppers to buy.
However, it also needs to be high enough that you are making a decent profit margin. Pricing strategies fall into two main groups: physiological and promotional. Here we will review a number of pricing strategies that motivate buyers to make purchases, while still maintaining those profit margins. Psychological product pricing strategies give customers the impression that they are getting a deal or are saving money. The most common way that businesses do this is through the.
The idea is that customers focus more on the first number on the price tag, so they feel like they are paying a much better price when in reality you have only decreased your margins by one cent. By knocking down your price by just a penny and giving your products that.
Most retailers choose to mark all their goods with a. Some, however, will reserve the power of psychological pricing for their sale pieces to try to incentivize a faster turnover of older merchandise. Tip: You can learn more about pricing strategies and how you can devise one for your business through our Product Pricing Guide. Promotional Pricing Promotional pricing is when a business temporarily drops its prices to quickly increase its sales.
Promotional pricing creates a sense of urgency among buyers to capitalize on deals, inciting faster and larger purchases. Promotional pricing is great for moving products at the end of a season, drawing customers in around a holiday or other special shopping occasion, attracting new customers, re-engaging old ones, and increasing sales volume. A flashy window display advertises a discount promotion to encourage more buying. Be sure to advertise promotions either outside or at the entry of your store, as sales will draw customers to your business when they might have just kept walking.
Percent discount promotions typically run for a limited amount of time, or until the sale stock is completely sold out. This strategy is relatively low risk and drives your sales volume. Plus, percent discounts can make customers feel good about their purchase with you, building brand loyalty and trust. A similar type of promotional pricing is a flat-dollar amount discount. Gift with purchase GWP promotions involve giving the customer a free item with either a minimum dollar purchase or purchase of a specific usually high-ticket product.
Sometimes the gift with a GWP promotion is a retail product. However, another effective strategy is to offer a store gift card that can be used at a later date. Gift cards encourage shoppers to return and spend more at your store. Vend , for example, comes pre-set with gift card and customer management features that make running promotions a breeze. Buy-one get-one BOGO promotions involve shoppers receiving a second product for free or at a deep discount with the purchase of one product.
BOGO promotions do, however, cut deeper into your profit margins than other types of promotional pricing, so they should be used sparingly.
Generally, retailers employ this strategy when they need to move older inventory, when they need immediate cash flow, or when they need to move perishable goods. Additionally, retailers tend to only run their BOGO sales for a very limited amount of time—hours or a weekend. Bundle pricing is a promotional tool that lumps together multiple products to sell as a single unit. For example, insurance retailers will often bundle multiple insurance plans to keep the price down, but also get you to sign up for multiple services that you may have otherwise not purchased.
Retailers will often bundle an expensive but slow-moving item with a popular item at a discount, making the final package look like a great deal for shoppers, while also helping business owners move more products. Additionally, by discounting the less expensive item, profit margins are not too heavily impacted, and you are still able to move greater product volume. Ecommerce merchandising is the practice of displaying and promoting products on your online store. All the basics of merchandising: layout, design, pricing, and displays all translate to your ecommerce website.
And, just like with merchandising your storefront, your online presence should speak to your brand goals, and align with your products and customer base. It may sound obvious, but keeping your store as neat and tidy as possible is important for encouraging sales. Being attentive to details like sparkling floors and clutter-free checkout counters shows customers that you take pride in your business, and also indicates that you will show them equal attention and respect.
Whereas a scuffed floor and dusty corners show a lack of attention, and shoppers will assume that your level of service is equally inattentive. The best way to maintain a clean store is to adopt a cleaning schedule. To do this, you will want to break your store into zones, and assign a different zone for cleaning each day. Keep in mind that some areas, like the entrance and exit as well as the bathrooms and checkout areas, will need to be cleaned more frequently than others.
This resource from Dill Cleaning Service offers a comprehensive downloadable cleaning zone checklist. In addition to keeping your store clean, updating your merchandising is another important part of store upkeep.
But, how often should you be updating? The costs associated with merchandising vary widely, but you do not have to break the bank to create a beautifully merchandised storefront. Before you begin merchandising, you will need to determine your budget.
To give you a little space to accommodate unforeseen issues or otherwise, also have a flexible budget, or the maximum you would spend. Your budget will largely depend on how much revenue you bring in. The U. Merchandising is a type of marketing. Marketing refers to all promotional efforts inside and outside of a store, and merchandising refers to promotional efforts that happen within a retail store or website.
Here are a list of things you should consider and tips to help you stick to a budget:. Merchandising is a major part of starting your retail business and will determine how you use your space, your pricing strategies, and your display techniques. Making effective merchandising choices will also help you define your brand, customer experience, and drive sales. Learn more about merchandising your business by checking out our visual merchandising best practices guide.
Meaghan Brophy is Fit Small Business's authority on retail and ecommerce. Before joining FSB, she managed a storefront for several years, working in everything from merchandising, to buying, to sales analysis. Brigitte also has a background in writing, research, and publishing with an undergraduate degree in writing. Sign up to receive more well-researched small business articles and topics in your inbox, personalized for you.
Fit Small Business content and reviews are editorially independent. We may make money when you click on links to our partners. Learn More. Published May 25, Why Is Merchandising Important? Cultivating your brand : Merchandising creates visual consistency between multiple locations and your online presence, making your brand recognizable and retainable for customers. Enhancing customer experience : The experience that customers have when they are shopping and their overall impression of your business will be positively impacted by effective merchandising strategies, such as store layout and display techniques that promote customer interaction.
Driving sales : Clear and effective merchandising can directly lead to increased sales through well-designed and well-stocked product displays, clear pricing, and creating an overall comfortable shopping experience. Grid Loop Free-flow Grid layouts typically utilize long aisles, with end-cap displays featuring impulse buy items and POP displays. Send Out Surveys Use GoogleTrends and Amazon Best Sellers Conduct Focus Groups and Panels If you have an existing store, send out email surveys to your regular customers asking them to rank their interest in specific products, their satisfaction with their shopping experience, or blank surveys where customers can make their own requests.
Online tools can help you pick up on larger industry trends and anticipate decreasing demand.
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