The Ultimate Small Business Guide to Retail Merchandising Strategies

Good retail merchandising practices help you attract customers and drive sales. In this guide, we go through the benefits of retail merchandising and how to perfect your merchandising strategy.

Not everyone has an eye for detail or creativity, but how your products are displayed in your retail store matters just as much as the products’ quality.

How many times have you been drawn to a retail display because of how appealing it looks and left that store with a product that you had no initial intention of buying? Or, how many times have you left a store empty-handed, either because you couldn’t find what you needed, or because the store was visually unappealing?

Therein lies the importance of good retail store merchandising strategies. Often, and without our realizing it, retail and visual merchandising displays are making our purchasing decisions for us as customers.

Read on to discover the benefits of retail merchandising, and several in-store merchandising tips you can employ to attract customers and drive sales.

Overview: What is retail merchandising?

Retail merchandising is a term that refers to how retailers place and display products within their brick-and-mortar stores. Retail merchandising aims to attract customers and drive sales by creating visually appealing product displays and store layouts, and also by enticing customers to make purchases through attractive retailer promotions and discounts.

For this reason, retail merchandising is an important part of retail management.

Each store’s merchandising process will differ, but the primary goal is to appeal to customers and boost sales.

The Kate Spade brand is known for its colorful, playful storefront merchandising. Image source: Author

3 benefits of retail merchandising

Even the highest quality products need to be displayed well to sell well. Here are the benefits retail merchandising will bring to your store.

1. Increased customers and sales

Attractive product displays are more apt than lifeless ones to lure customers into your store. Even if your brand and products are built around a neutral or toned-down color palette, you still have endless opportunities to get creative with window displays that will tempt shoppers inside.

When visual merchandising is done right, customers often leave with what they came for -- plus additional items they were tempted into buying.

Despite Muji’s signature neutral color palette, the brand is still able to appeal to the eye of the customer in other ways. Image source: Author

2. Enhanced customer experience

An attractive store doesn’t just tempt shoppers inside; it also delivers a great customer experience once buyers have come through your doors.

Take quirky cosmetics brand Lush, for example. When you think about shopping for shampoo and soap, you’re probably transported to an aisle in a generic supermarket. Nothing mind-blowing about that.

However, Lush has turned the task of buying regular household items on its head. Aside from its “naked” policy, which means that most products are sold without packaging and therefore their bright colors illuminate the stores, Lush also encourages customers to test and interact with the products.

The inside of a Lush store is not only unique but also incredibly appealing to customers. Image source: Author

Merchandising is not merely about drawing people in. You have to make sure customers have a great experience while they’re in your store.

3. Better value for money

Visual merchandising can be a cost-effective way of promoting products. There are endless ways of approaching visual merchandising without breaking the bank. For example, color-blocked clothing rails or book displays and interesting product groupings often pique customers’ attention.

The key to getting retail merchandising right is trial and error. Try out a few different techniques and you’ll soon find your merchandising groove.

How to perfect your in-store merchandising strategy

In-store merchandising focuses on the visual element of merchandising, and how to present your products, displays, signage, and even lighting to drive sales. Here are a few tips to enhance your store’s visual merchandising strategy.

Deck out your point-of-sale

Your point-of-sale (POS) area is one of your most important pieces of merchandising retail estate.

We’ve all, at some point, been standing in line at a store, and added impulse items from product bins or mini-shelves to our baskets. In fact, we each spend up to $5,400 each year on impulse products alone.

The POS area is basically your last chance to market extra products to customers who have already made a purchase decision. Many retailers choose to stock lower-priced items at their POS, as customers are more comfortable picking up low-cost items.

However, don’t forget about your point-of-purchase displays, too. Incorporate end-of-aisle product displays, product bins, and eye-level promotional displays into your retail merchandising strategy.

Cross-merchandise to your heart’s content

Cross-merchandising is a tried and tested visual merchandising strategy beloved by almost all retailers.

This approach boosts sales by placing complementary products alongside one another in displays. In-store merchandisers carefully choose to display secondary products from different categories together in order to increase add-on sales.

A common example of cross-merchandising is when retailers build outfits from different items of clothing to show how they complement each other, or when retailers display common food items together, such as placing strawberries next to fresh cream or placing chips next to dips.

Cross-merchandising is great for retailers, but it also benefits customers in a range of ways, such as saving them time searching for related products that they would have bought anyway, or reminding them to pick up secondary products they might otherwise have forgotten.

Move seasonal products to the front of the store

Place holiday-specific products, such as those for Christmas, Thanksgiving, and Valentine’s Day, at the front of the store. Most people will likely be looking for these types of products, and if they’re not, they’re likely to make an impulse purchase if these displays are the first they see.

Heighten customers’ senses

When customers walk into a store, all five of their senses are likely engaged, which gives brick-and-mortar stores a huge advantage over e-commerce stores when it comes to merchandising.

Of course, visuals are important, but, as much as you can, try to engage customers’ other senses. Here are a few ways you can achieve this:

• Touch: Textures are a very important aspect for customers. Make it easy for customers to touch store merchandise, and aim to place most products within customer reach.
• Taste: Retailers who sell food or drink products are in a great position to win customers over with free samples.
• Hearing: There’s nothing worse than not being able to hear yourself think when you’re shopping, but deathly silence can also be incredibly off-putting. Try to strike a balance by playing soft, upbeat music throughout your store.
• Smell: Fresh popcorn and the movies, freshly baked bread and the local bakery: There are some smells that automatically make us think of very specific places. That’s why many retailers are deliberately incorporating the sense of smell into their stores as a strategy to heighten brand connection.

It’s not just what’s in store that matters

You already know that your products are great, but marketing them to your customers in the right way is the key to making more sales.

Now more than ever, retailers need to make smart merchandising decisions both to help make the most of their square footage and accommodate their customers’ safety during COVID-19.

If you’re looking for more tips on how to boost sales, check out this article for a fuller look at retail management best practices, and how retail management software can benefit your store.