Merchandising in Retail Sales Management

As competition in the retail market grows, retailers are forced to pay more attention to creating competitive advantages. It is not enough to use only traditional levers of influence on customers. You need to look for new ones. You can achieve success in retail by implementing merchandising technologies.

The history of the emergence of merchandising is associated with the development of self-service, under the influence of which the product itself, the buyer, the manufacturer and the retailer changed. As a result of the changes, merchandising emerged, which is necessary today for both manufacturers and retailers.

Merchandising  is a sms marketing for ecommerce: 2023 beginner’s guide complex marketing and commercial direction that stimulates retail sales by attracting the attention of end customers to certain brands or product groups without the active participation of sellers.

From the perspective of retail sales management, the term “merchandising” means:

• organization of trade and technological processes and their management through optimization of the text services layout of the sales area, the arrangement of equipment and the display of goods, taking into account the psychology of consumers;
• technology for promoting individual product units or groups of products, when some products push others to sell without the use of additional marketing tools;
• methods of organizing the trade and technological process and the sale of goods, in which the role and influence of sellers is reduced, while the consumer, on the contrary, increases;
• sales technologies based on the principle of compatibility of consumer properties of goods and services with their psychological perception by customers in the sales area;
• ways to stimulate sales.

Accordingly, merchandising is carried out through events and is always aimed at a specific result: stimulating the desire of the end customer to choose and purchase the promoted product. The main goal is to increase sales volumes and attract new customers.

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In addition, other goals have been set:

• creating competitive advantages for the store and individual product brands;
• effective presentation of products;
• providing the client with the necessary information;
• forming loyalty to the store, increasing the number of loyal customers;
• attracting customers’ attention to new products, special offers for individual goods;
• influencing the behavior of clients while respecting social legitimacy and ethics;
• increasing the time the consumer spends in the store and the number of purchases.

The main tasks of merchandising include:

• Retail Sales Management:
• effective presentation of products at the point of sale;
• stimulating customer interest in new products;
• reinforcing in the minds of customers the distinctive characteristics of products and brands;
• product positioning based on consumer psychology and attention regulation factors;
• maintaining the store’s competitiveness:
• ensuring the most complete satisfaction of customer needs;
• fixing in the minds of consumers a distinctive image of the store and its product range;
• creating an atmosphere in which customers would enjoy shopping even more;
• improving trade and technological processes in the store:
• creation of an optimal layout of the retail space and equipment placement system;
• efficient use of retail space;
• regulation of customer flow in the sales area;
• ensuring the availability of products to consumers in the selection process without the participation of sellers;
• reducing the adaptation period for store visitors;
• creating an environment in the store that matches the mood of customers;
• Customer behavior management:
• increasing the length of time customers spend at a retail outlet and the number of purchases they make;
• increase in the average check amount;
• increasing the level of customer decision-making directly in the store;
• improvement of advertising and communication policy:
• use of navigation tools in the store;
• providing clients with the necessary information;
• creation and placement of advertising in stores.

There are two types of merchandising: visual (window display, product presentation, etc.) and communicative (information for customers, sales area design, etc.).

Practice shows that not only retailers need merchandising, but also all participants in the turnover of goods, primarily manufacturers. The manufacturer and the seller have different tasks in merchandising. However, this does not exclude the possibility of identifying effective ways of their interaction.

Merchandising, as an applied science, involves knowledge of sales methods, advertising, logistics, psychology, principles of composition and design.

Golden principles and laws of merchandising in retail sales management

The principles underlying merchandising relate to the specifics of presenting any category of goods in any retail outlet. They determine the success of creating an impression on customers.

The basic principles of merchandising include:

1. Exposure.

   This means that the product must be visible to the buyer. Here it is very important how the shop windows are formed, how the products are displayed. It is also necessary to highlight special offers using visual advertising means.

   Influence. The product should look attractive, stimulating the consumer to buy. The more the product influences the customer’s feelings during presentation, the higher the probability of purchase. The store should seem to invite potential buyers to come in, open, and taste.

1. Price presentation.

   A person must understand what benefit the product will bring to him. Many consumers refuse to buy if they cannot find out the cost of the product. And the main role here is played by the price tag as a means of identifying the price, as well as the correct design and presentation of the product. There is a saying: “If there is no price tag on the product, the consumer thinks that it is expensive. If it really has a high price, you need to explain what it is due to.” Accordingly, the presentation of the cost in the store can form the image of the product, attract or scare away customers.

2. Convenience.

   First of all, we are talking about the convenience of getting to know the product. A person should have the opportunity to look at it, touch it, get to know it. And this principle is best implemented using progressive sales methods, especially self-service.

   From the key principles, we will move on to a global description of merchandising and dwell on its laws. Considering that merchandising is based on the concept of “5P” (product, place, promotion, price, personal), three of its fundamental laws are used: the unity of effective stock, location and presentation of products.

An effective inventory  involves creating an optimal assortment and stock of goods, a rule for the presence of products on the shelf and their rotation, as well as inventory control.

When determining the order of product placement , it is important to follow the following rules: select priority places in the sales area and at points of sale, display products taking into account their profitability and turnover rate, duplicate points of sale, and conduct cross-merchandising.