Visual merchandising in retail is the display and promotion of products in a way that encourages sales. Retail visual merchandising also helps customers to find products easier and generally makes the shopping experience more appealing and enjoyable. It’s no wonder it’s known as the ‘silent salesperson.’ Great examples of visual merchandising in retail are those that have a positive effect on the customer experience and profits.

Retail merchandising involves organizing merchandise in an appealing way in order to engage and inspire shoppers to buy more items than they initially intended. The term covers everything from how merchandise is visually arranged in store, to how items are displayed to incite buyers to purchase add-ons, and how signage helps along the way. 

For clothing retailers, the arrangement and lighting of fitting rooms can also help to increase the likelihood of customers purchasing more items. Visual merchandisers are also tasked with analyzing all the behind-the-scenes data and understanding the principles of inventory management in order to work out what’s working and what’s not. 

Retail merchandising helps to encourage customers to shop in your store rather than a competitor’s. It’s an effective way of helping to convert more browsers or window shoppers into customers, by removing their confusion and helping them choose between multiple products more quickly. 

The better the merchandising and messaging, the less overwhelmed shoppers will feel, and the less likely it is that they will leave without purchasing. 

Just like SEO on web pages, when done well retail merchandising isn’t obvious. Shoppers should not notice it, but it should act to focus their attention. The lighting, for example, should draw them towards fixtures, while signage should make them curious to find out more. 

Good visual merchandisers also understand which colors are on trend and how to tie into them. They should also have knowledge about the importance of the supply chain, and of having fast-moving products rather than unprofitable dead stock. Merchandisers must also be creative and able to make shoppers feel excited by creating a sense of serendipity when people are browsing in a brick and mortar store. 

Having the following elements will provide a good basis for a merchandising plan:

• A layout plan of the instore customer journey – how traffic should move through the store
• A department plan that’s used to change store layouts according to season and holidays
• A budget for lighting, signage, props, and fixtures
• A merchandising planning system geared towards maximizing turn, limiting out-of-stocks, increasing margins, and minimizing markdowns
• An ‘open-to-buy’ system with predictive analytics to determine the variety of merchandise shoppers have available

1. Start with the storefront

When shoppers arrive at your store they need to understand what to expect, so make sure the entrance is inviting and explain exactly what they will find when they enter. 

2. Get the directional signage in place

If someone is new to your store they need to know where they can find things, so use signage to ensure shoppers can easily navigate the space. Shoppers generally want to proceed clockwise throughout a store, so counterclockwise signage could be creating friction. 

3. Lighting

People like to shop in energetic and bright spaces, so make sure you light the store adequately. 

4. Create divisions

Visual barriers between departments can help to make the store appear more intimate. Interesting barriers and backdrops can help draw shoppers towards them. Also, make sure the relationship between your different displays are obvious. 

5. Set up a merchandising calendar

There are several aspects to a marketing plan from affiliate marketing to advertising. Similarly, there are various aspects to your merchandising plan (current promotions, new products, upcoming events, and reviews of previous plans). You must take those into account and adopt a full year calendar set up. This will help you keep abreast of holidays, seasons, local events, and promotions. 

Now we’ve covered some of the basics behind retail merchandising, let’s look at two crucial aspects: firstly, store displays and visual merchandising.

The success formula in retail is to sell as much merchandise as you can at the highest possible margin. Sounds simple, right? Most retailers agree with and operate their stores based on this principle. But it doesn’t mean retailers buy products they think will be good or simply merchandise they like for their store and give each a high mark-up. Retailers need to be much more strategic.

The six types of merchandise identified below play a specific and beneficial role to the profitability of a retail store. And any retailer who wants to survive in today’s marketplace needs to consistently carry all six types. Customer experience is impacted dramatically by your merchandising skills, and the six types listed here were identified as major customer experience enhancers.

Destination Merchandise

Why do customers come to your store? What product do you sell that motivates customers enough to pass two or three other stores to come to yours instead? This destination merchandise elevates you above the competition. It may be a product no one else sells or a product that’s far better than what your competitor sells. In many cases, it is a limited edition item. But even if it’s regular stock, what do you carry that your competition ignores? Think of it as your signature merchandise, or what you are known for.

Image Enhancers

This type of merchandise wows customers and heightens their impression of your business. All retailers should maintain a level of at least 10% of this type of merchandise as part of their overall inventory mix. Note that while customers are wowed by these products, they don’t necessarily buy them; which is why you want to keep the amount low and controllable. Image-enhancer merchandise is necessary to create the wow factor that generates word-of-mouth advertising among your customers.

Transaction Builders

When customers buy a transaction-builder item, they are required to purchase several more products to use it. For example, if someone buys a gallon of paint, they’ll need to buy a brush, a roller, a drop cloth, and all the other accessories required to use the paint. Therefore, the store owner can give a huge discount on the price of the paint and rely on the huge margins of the accessories. Look for ways to incorporate more transaction-building merchandise throughout your store. And consider bundles for these types of merchandise as well to help maintain your margins.

Training is a big part of making this type of merchandising work in your store. Make sure your employees know the strategy. Remember, an employee will sell the discounted paint and think they did a good job for having sold something. You need to educate them on the strategy and make sure they are using their selling skills to add on to the sale.

Traffic Builders

What merchandise do you carry that attracts customers to your store over and over again? What products do you carry that keep customers in your store longer? For example, if you are a convenience store, you would want to carry lottery tickets. While traffic builders are usually products, they might also be strong visual merchandising ideas features like an interactive display. These kinds of products and visual merchandising techniques create buying frenzies among consumers.

Profit Generators

This is the merchandise you sell with high margins. Of course, customers don’t define these products as “profit generators,” but they should always be included in the mix of merchandise you sell. Consider buying closeouts from your vendors so you can get higher margins, but still show a discount to the customer.

Turf Protectors

Retailers typically don’t enjoy carrying this type of merchandise, but they must in order to do business. For example, a travel stop may hate carrying diesel fuel needed by large trucks. They don’t make money on the fuel, they make money on the other products and services they offer in the store, like coffee, food, or showers. But no one will come into the store if the retailer doesn’t sell the diesel fuel. This is proof that the products you sell may not be products you personally like, so start thinking in terms of what will bring customers into your store.

Retail merchandising is a broad term used to designate a vast range of services which are closely connected to in-store marketing and sales strategies, revenue generation, and a lot more. Read on as we go deeper and elaborate on the top three reasons why retail merchandising is so important for the sector.

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