What is Retail Merchandising and Why does It Matter?

What is Retail Merchandising and Why does It Matter?

We’re living in a visual age. As a result, the way retailers merchandise their store can have a big effect on sales. Keep reading to learn more about retail merchandising and get tips for effectively merchandising your store.

What Is Retail Merchandising?

Merchandising refers to the way you display products in your store. For example, the “look and feel” of the overall store, the way the store is laid out, and the actual merchandise displays (racks, window displays, table displays, etc.) make a difference.

Good retail merchandising helps attract customers through your doors. However, once they’re inside, the way your store is merchandised can help guide their path. As a result, direct their attention to your highest-profit products. And keep them in the store longer.

Planning Your Customer Path

To get started merchandising your store, consider these factors:

  • What products do you want to promote? For  example, your most profitable, best-selling and newest products are typically what you want to focus on. The products you’ll promote will change from season to season. And they’ll change even week to week. So identify which products you want customers to notice.
  • How do you want customers to move through the store? For example, store layout can convey a lot about a store. And a shop full of crowded racks and overflowing shelves will attract people who like to hunt for treasures and bargains. As a result, a sparse, minimal store will highlight well-chosen, high-end items. Most retailers will want something in the middle, with a well-organized store. And that conveys an abundant but not overwhelming product selection.

Use your store layout to guide customers to the products you want to focus on. Depending on your space, you can lay out your store in a grid with aisles, a loop format with a circular path throughout the store or even a “free form” layout that appears haphazard. You can sketch out your layout or use planogram software for retailers to create your design.

Elements of Retail Merchandising

Once you’ve got your essential layout set, consider how best to use the following elements to merchandise your store.


Decide on the right mix of fixtures to suit your space and layout. For example, ask yourself if your products should hang from racks or sit on shelves? Do you want to display items in glass cases or make them available for customers to hold and touch?


Use lighting to draw customer focus to key areas and products. For example, you might want spotlights on the newest products or on luxury items in your store. In addition to focused lighting, use the store’s overall lighting to set a mood. As a result, you might use bright, gleaming light in an electronics store or sultry, low light in a lingerie shop.


Signage gets customers in the door and guides them through the store. In addition to basic signs indicating categories and prices, you may need wayfinding signage (“Fitting Rooms” or “Cashier”), sales signage that spotlights the benefits of a product, and display window signage.


Use decor to convey your brand and to highlight key product displays. For example, paint, floor coverings, wall coverings and window coverings can create different spaces.

Retail Merchandising Display Ideas

Common ways to group merchandise for display include:

  • By brand
  • By purpose (cooking gear, workwear)
  • By theme (fall, Mother’s Day)
  • By price (under $25, splurge items)
  • By target customer/end user (gardeners, cooks, music lovers)

Your displays should:

  • Get customers’ attention so they’ll stop and consider the product (or at least spend more time in your store).
  • Give them ideas for how they might use the product or how it might work with things they already have. For instance, displaying full outfits on a mannequin gives a customer a better idea of how a shirt will look than seeing the same shirt folded up on a table. As a result, home goods stores often show tabletop displays that customers could recreate in their own homes.

Tips You Should Follow

Follow these tips to create effective retail displays:

  • Use the “rule of three.” The eye is drawn toward groups of three items.
  • Use asymmetry. Mix up the height and size of items in the display to keep the eye moving.
  • Create a focal point. For example, each display should have one primary item with others as supporting players. As a result, display a laptop with a carrying sleeve and mouse as supporting players.
  • Make it Insta-worthy. For  example, storefront and window displays that are beautifully designed will attract people to stop and stare — and shop.
  • Put high-margin or popular products — the things you most want customers to buy — where shoppers can easily find them (like the front of the store or the window display).
  • Change your displays on a regular basis. Keeping things fresh keeps customers coming back to see what’s new. So create a calendar to keep you on track and remind you when to change things up.

A little attention to your retail merchandising can make a big difference in your sales. As a result, you need to look for your most effective merchandising tips?

Image: Depositphotos.com

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Rieva Lesonsky Rieva Lesonsky is a Columnist for Small Business Trends covering employment, retail trends and women in business. She is CEO of GrowBiz Media, a media company that helps entrepreneurs start and grow their businesses. Visit her blog, SmallBizDaily, to get the scoop on business trends and free TrendCast reports.

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