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.

What is Retail Merchandising and Why does It Matter?

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.

Elements of Retail MerchandisingDescription and Importance
Fixtures- Select the right fixtures to optimize product display and accessibility.- Decide between racks, shelves, glass cases, or interactive displays.- Fixtures impact the overall store layout and customer experience.
Lighting- Utilize lighting strategically to highlight key areas and products.- Focus spotlights on new or premium items to draw customer attention.- Create a mood with overall lighting, setting the tone for the shopping experience.
Signage- Use signage for attracting customers, guiding them through the store, and providing information.- Categories, prices, wayfinding, sales benefits, and window displays can all benefit from signage.- Effective signage enhances the customer journey and product visibility.
Décor- Employ decor elements to reinforce your brand identity and emphasize product displays.- Paint, floor, wall, and window coverings can transform the store's ambiance and create distinct spaces.- Decor contributes to the overall aesthetics and atmosphere of your store.
Retail Merchandising Display Ideas- Group merchandise thoughtfully by brand, purpose, theme, price, or target customer.- Displays should grab customers' attention, encouraging them to explore products further.- Offer ideas on product use and compatibility, enhancing the shopping experience.- Effective displays inspire customers and promote product engagement.

What is Retail Merchandising and Why does It Matter?

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?

What is Retail Merchandising and Why does It Matter?

Enhancing Retail Merchandising

Effective retail merchandising is crucial for attracting customers, guiding their shopping journey, and boosting sales. Here are some additional tips to enhance your retail merchandising strategy:

  • Utilize Technology: Incorporate digital signage, interactive displays, and augmented reality (AR) to engage customers. Digital displays can showcase product information, reviews, and promotions, while AR can allow customers to visualize products in their own space.
  • Incorporate Seasonal Themes: Change your store’s decor and displays to align with seasons, holidays, or special occasions. Seasonal themes create a sense of excitement and encourage impulse buying.
  • Implement Cross-Merchandising: Pair complementary products together to encourage upselling. For example, if you sell coffee makers, display them alongside premium coffee beans and stylish mugs.
  • Focus on Accessibility: Ensure that your store layout and displays are accessible to all customers, including those with disabilities. Consider wheelchair accessibility, clear aisle paths, and easy-to-reach product placements.
  • Interactive Displays: Incorporate interactive displays where customers can touch, try, or sample products. Interactive experiences create memorable shopping moments and can lead to higher conversions.
  • Data-Driven Merchandising: Analyze sales data and customer feedback to optimize your merchandising strategy. Identify top-performing products and adjust your displays accordingly.
  • Visual Merchandising Training: Train your staff on effective visual merchandising techniques. Well-trained employees can maintain the integrity of your displays and ensure a consistent shopping experience.
  • Create Instagrammable Moments: Design unique and visually appealing areas within your store that customers will want to share on social media. Encourage user-generated content by creating Instagram-worthy spaces.
  • Incorporate Sustainability: Embrace eco-friendly merchandising by using sustainable materials for displays and packaging. Highlight your commitment to sustainability to attract environmentally conscious customers.
  • Customer Feedback: Encourage customers to provide feedback on your merchandising displays. Their insights can help you refine your strategies and cater to their preferences.
  • Collaborate with Suppliers: Work closely with product suppliers and manufacturers to create eye-catching displays that highlight the features and benefits of their products.
  • Visual Storytelling: Use your displays to tell a compelling story about your brand or products. Engage customers emotionally by showcasing the journey and craftsmanship behind your offerings.
Enhancing Retail Merchandising TipsDescription and Importance
Utilize Technology- Incorporate digital signage, interactive displays, and AR to engage and inform customers. - Digital displays showcase product details, reviews, and promotions, enhancing the shopping experience. - AR allows customers to visualize products in their own space, increasing confidence in purchase decisions.
Incorporate Seasonal Themes- Change decor and displays to align with seasons, holidays, or special occasions. - Seasonal themes create excitement, drive foot traffic, and encourage impulse buying. - Customers appreciate a fresh and relevant shopping environment.
Implement Cross-Merchandising- Pair complementary products together for upselling opportunities. - Effective cross-merchandising can increase average transaction value and customer satisfaction. - Coffee makers displayed with coffee beans and mugs, for example, create convenience for shoppers.
Focus on Accessibility- Ensure store layout and displays accommodate all customers, including those with disabilities. - Consider wheelchair accessibility, clear aisle paths, and easy-to-reach product placements. - An inclusive shopping experience fosters customer loyalty and positive word-of-mouth.
Interactive Displays- Incorporate interactive displays for hands-on product experiences. - Touch, try, or sample opportunities create memorable shopping moments and boost engagement. - Increased engagement often leads to higher conversions and customer satisfaction.
Data-Driven Merchandising- Analyze sales data and customer feedback to optimize merchandising strategies. - Identify top-performing products and adjust displays accordingly for increased sales. - Data-driven decisions lead to more effective merchandising.
Visual Merchandising Training- Train staff on visual merchandising techniques to maintain display integrity. - Well-trained employees ensure a consistent and visually appealing shopping experience. - A knowledgeable team enhances the overall store image.
Create Instagrammable Moments- Design unique and visually appealing areas within the store for social media sharing. - Encourage user-generated content by creating Instagram-worthy spaces. - Social media exposure can attract new customers and build brand awareness.
Incorporate Sustainability- Use sustainable materials for displays and packaging to highlight eco-friendliness. - Attract environmentally conscious customers by showcasing your commitment to sustainability. - Sustainable practices align with current consumer values.
Customer Feedback- Solicit customer feedback on merchandising displays to gain valuable insights. - Customer preferences can drive display improvements and tailor strategies to their needs. - Customer-centric merchandising fosters loyalty and repeat business.
Collaborate with Suppliers- Work closely with suppliers to create eye-catching displays that highlight product features. - Effective collaboration enhances product visibility and educates customers about offerings. - Well-executed displays benefit both retailers and suppliers.
Visual Storytelling- Use displays to narrate compelling stories about your brand or products. - Engage customers emotionally by showcasing the journey and craftsmanship behind your offerings. - Storytelling creates deeper connections with customers and enhances brand loyalty.

What is Retail Merchandising and Why does It Matter?

Enhancing Customer Engagement Through Merchandising

Retail merchandising is not just about product placement; it’s about creating a dialogue with your customers. Engaging customers goes beyond the visual; it involves understanding their needs and providing solutions in real-time. Implement strategies such as:

  • In-store Events and Workshops: Host events related to your products or industry to educate and entertain your customers. For instance, a bookstore could host author readings or writing workshops, while a home goods store might offer interior decorating seminars. These events can increase foot traffic and deepen customer relationships.
  • Loyalty Programs: Develop a loyalty program that rewards customers for repeat purchases. This not only encourages them to come back but also provides you with valuable data on customer preferences and buying habits, which can inform your merchandising decisions.
  • Personalization: Use customer data to personalize the shopping experience. This could mean sending targeted offers or recommendations based on past purchases or browsing behavior. Personalization makes customers feel valued and increases the likelihood of conversions.

Importance of Employee Training in Retail Merchandising

The role of your staff in retail merchandising cannot be overstated. Well-informed and engaged employees can significantly enhance the shopping experience, leading to increased sales and customer loyalty. Consider the following training focuses:

  • Product Knowledge: Employees should be experts on the products they’re selling. This includes understanding features, benefits, and how to use or assemble products. Knowledgeable staff can confidently answer customer questions and make persuasive recommendations.
  • Customer Service Skills: Training in customer service skills is essential. Employees should learn how to greet customers, offer help without being intrusive, and handle complaints gracefully. Excellent customer service can turn a first-time visitor into a lifelong customer.
  • Visual Merchandising Techniques: Teach your staff the basics of visual merchandising. They should understand how to maintain and refresh displays to keep the store looking its best. This includes the strategic placement of products, understanding the store’s layout, and the importance of cleanliness and organization.
  • Sales Training: While not every interaction should be about making a sale, employees should know how to identify and act on selling opportunities. This includes understanding how to upsell and cross-sell effectively, without coming off as pushy.


In today’s visual age, the art of retail merchandising has never been more critical. It goes beyond just showcasing products; it’s about creating immersive shopping experiences that captivate customers and boost sales.

Effective retail merchandising, when executed thoughtfully, can be the difference between a thriving store and one struggling to attract foot traffic.

As we’ve explored the fundamentals and additional strategies of retail merchandising, it’s evident that every aspect, from store layout to interactive displays, plays a pivotal role in shaping customer perceptions and behaviors.

Whether you’re a seasoned retailer or just starting your entrepreneurial journey, these insights can guide you in elevating your merchandising efforts.

Remember that the key to successful retail merchandising lies in understanding your products, your target audience, and the ever-evolving retail landscape. Be willing to adapt, experiment, and embrace technology to create memorable shopping moments.

By implementing these tips, you can transform your store into a captivating destination that not only attracts customers but keeps them engaged, inspired, and coming back for more. Your retail success story begins with the art of effective merchandising, so start crafting those unforgettable shopping experiences today.

Image: Depositphotos.com

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.