What is Merchandising?
- rbaconsultingltd
- Jun 2
- 4 min read
What is Merchandising?
Merchandising is a broad term used for the activities and strategies that support product promotion, generally in retail – or, increasingly these days, etail environments. It covers product design, placement, pricing, and promotion.
I’ve mentioned in past blogs and comments that sales is the fourth science, merchandising could just as easily be considered one too.
Types of Merchandising
1. Retail Merchandising
Retail merchandising involves how products are presented in physical stores (e.g. shelf placement, signage, promotions).
In a retail environment, there are primary, secondary, and tertiary sales areas. Primary areas are the most valuable – locations where the product is seen quickly and easily. Secondary areas have slightly less visibility. Tertiary? Think back corners, poor lighting, unattractive spaces with little footfall.
I was once offered the opportunity to have my product placed in such an area by a potential customer. While the customer was desirable, my response was a polite “no thanks”. Negotiation followed and eventually... we agreed on a primary store position, where the benefit would be mutual.
On another occasion at River Island Ltd, I witnessed a single product, a bright green luminous surf T-shirt in a primary location selling 50 units per hour, equating to around £3,000 a day.
Why? In the shop window, the mannequin wore it. Was it an impulse purchase? Maybe. Did it entice the customer inside and up the escalator? Yes. Where was it placed? Right at the top, the very first product in sight. It was the easiest sale I’ve ever witnessed. All that was needed was to keep restocking the shelf. But what if staff had left that shelf empty...? Remember the previous post about data.
Has IKEA cracked it? Their layout leads customers on a journey through every product category – inspiring them with fully designed living spaces. Yet, for the customer who knows exactly what they want, there are shortcuts to expedite the specific sale. Genius imo. Particularly if you lack shopping patience such as myself!
2. Visual Merchandising
This focuses on the visual presentation of products – window displays, lighting, colour schemes, and the overall look and feel.
Next Retail PLC would often create seasonal themes or looks based on fashion trends, pairing products to encourage the full purchase journey. Not just the suit, but the shirt, tie, belt, shoes, and beyond: suit bag, cufflinks, shoe polish. That £200 suit sale? Suddenly it’s £500.
Colour is a fantastic merchandising tool. Organised by colour, displays appear more appealing and emotionally engaging. A considered palette evokes calm and coherence. Random placement, by contrast, can feel chaotic and overwhelming.
Kerakoll created a brilliant in-store display for a customer, with colours arranged by tone, from light to dark. United Colors of Benetton are masters of this – see the image above. Original Style, where I worked, used a similar approach in the mosaics section of the brochure. It made it easy for customers to find mosaics that met their specific functional requirements (wet/dry areas) while matching their chosen colour scheme.
Fundamentally, whatever the product – make it look attractive. In interior design, context is everything. Inspiring room settings that showcase the products in use are far more impactful than isolated shots that feel disconnected.
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3. Product Merchandising
This is about selecting and offering the right mix of products for your target market.
In the porcelain and ceramic tile industry – or the KBB industry (Kitchen, Bedroom, Bathroom) – it makes sense to tailor your range to your customer profile and offer a “one-stop shop”: bathroom products that complement tile, adhesives, grouts, sealers, cleaners, and maybe even furnishings.
These days, essential oils are a very popular point-of-purchase item. Why? Because scent can trigger an impulse buy.
Another example. Take Reebok – product types are tailored to the sports shop they’re in. Or you might target a specific demographic via ATL marketing – for instance, a Welsh rugby fan reached via a publication and promotion relevant to them.
Also worth remembering:
“Eye height is buy height”
The bestseller rule
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4. Digital / E-commerce Merchandising
This is how products are displayed and promoted online – homepage banners, category organisation, personalisation, and recommendations.
Most of us are on social platforms like Instagram and TikTok – both highly visual. Companies link these platforms to their websites, making the consumer journey key to generating sales.
The same merchandising principles apply digitally as they do in-store – and yet, the same mistakes are often repeated.
Keep the customer journey simple:👉 See something → Click → Go straight to product or service → Get the right info → Checkout
How long does a customer stick around if they can’t find what they want? Under 15 seconds.
Recently, I clicked on an Instagram ad that caught my eye. I was redirected to the brand’s homepage – not the product page. I tried to search for it... no luck. I left. Sale lost. And this was a market leader.
One independent company that constantly try to improve their digital engagement using the above principles is HyperionTile.co.uk
Find product by colour, collection, bestseller or living space. A great example of appealing to the site visitor subject to need.
Remember – all types of merchandising can and often should be intertwined.
👉 Want to know more? rbaconsultingltd@gmail.com
Goals of Merchandising:
Attract customers
Convert interest into sales
Enhance the customer experience (in-store or online)
Build brand recognition and loyalty
In Summary
Merchandising is about making the right product available in the right place, at the right time, at the right price, in the right quantity – to trigger a positive decision or a purchase.
👉 Want to know more? rbaconsultingltd@gmail.com or call 07951 596112
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