What is merchandising? Definition and examples
Merchandising involves promoting the sales of products in supermarkets and other retail stores. The term, in its broadest sense, refers to any practice that helps boost the sale of goods to consumers in a retail setting.Do not confuse the term with merchandise, which simply means goods.
When a consumer or prospect is in a store, almost everything you do to try to get a sale involves activities related to merchandising. A prospect is a consumer who you believe could turn into a paying customer – the term is short for prospective customer. Much of it involves presenting goods in an attractive way to encourage consumers to buy.
BusinessDictionary.com says the following about the term:
“The activity of promoting the sale of goods at retail. Merchandising activities may include display techniques, free samples, on-the-spot demonstration, pricing, shelf talkers, special offers, and other point-of-sale methods.”
Merchandising’s concept is fundamentally to present goods:
- at the right time,
- in the best place,
- in the right quantity, and
- at the right price.
The aim, above all, is to sell as much as possible.
Examples of merchandising activities
We include the following activities as part of merchandising:
- Establishing coupons or discounts.
- Creating and implementing marketing strategies in a retail setting.
- Anything to do with the display of goods in a store.
- Deciding where in the store to place the goods.
- Setting prices.
- Determining quantities.
- Offering special deals such as four for the price of three.
According to Investopedia.com:
“More broadly, merchandising may refer to retail sales itself, that is the provision of goods to end-user consumers.”
One size fits all not good enough
‘One size fits all’ is definitely not the best approach in the world of merchandising. Each product sells better in a specific number of settings and types of offers. In the same way, certain types of consumers respond well to one approach and not to another.
Common sense, for example, will tell us not to place toys for four-year-olds, who are much shorter than most other consumers, on the top shelf. Neither would we place articles for individuals older than seventy years of age, who may find it hard to bend down, in the bottom shelf.
What does a merchandiser do?
Somebody who specializes in merchandising is a merchandiser. Next time you walk past a shop and see a sign that says: “Buy four get one free!” you can tell your friends, colleagues, children, or parents that a merchandiser thought up that offer.
In an article published by Repsly.com, Ameyna Jackson writes the following about merchandisers:
“Merchandisers are responsible for everything that happens to a product from the moment it is delivered to the store to the moment a shopper picks it up off the shelf.”
“Depending on the retailer, that may include performing stockouts, organizing the shelf, setting up displays, and setting up price and promotional signs.”
If you are creative, pay attention to detail, have good spoken and written skills, and are good at working under pressure, you should consider a career in merchandising.
Merchandising vs. sales vs. selling
Although the three terms refer to closely related functions, they are not the same.
Salespeople talk to the consumer or prospect. They try to get them to buy. If you want a career in selling, you must be good at persuading people.
In accounting, for example, the term sales refers to items that consumers buy, i.e., purchases made. The sales department of a company typically has salespeople in it. These people focus on selling to existing customers and prospects.
This is the process of leading consumers to a product; the aim being to encourage them to buy. Unlike the salesperson, the merchandiser does not meet the prospect. His or her focus is on the product’s display, its setting, where it is, what special offers to include, and how much to sell it for (price).