Merchandising and its various applications help shape the world around us and our perception of that world as much as advertising and the media. Simply put, merchandising constitutes the manner in which retail outlets and marketers present products for sale to the consumer, both in form and content.
On the most basic level, the importance of merchandising is reflected in sales. Retail stores must make a certain amount of money each day, week, month and year in order to stay in business. The sale of products generates this revenue. Merchandising concerns selling merchandise to generate profit. Poor merchandising does not drive up sales, while successful marketing does. According to R. Srinivasan, author of “Case Studies In Marketing,” merchandising directly influences approximately two-thirds of all sales.
Merchandising impacts a business and, thereby, its employees. Poor merchandising means poor sales, which impacts retailers and manufacturers. This changes the nature of the economy through potential job loss.
Merchandising within a retail outlet creates product awareness and works to associate products with one another. For instance, a customer shopping for a new computer may want speakers to connect to that computer. Successful merchandising places speakers in visual range of the computers, raising customer awareness of the product and potentially increasing sales. Another example can be found at the checkout line of large stores like Target and Best Buy, where everything from DVDs to magazines to snack food sit. Retail outlets use merchandising to remind customers that certain products exist and that they complement other products.
Visual merchandising constitutes a special branch of merchandising concerned with creating the look of merchandise within a store. The role of the visual merchandiser entails creating an aesthetically pleasing interior space and a logical flow of products. Visual merchandisers use the layout of a store to maximum effect by placing displays in key locations. The importance of visual merchandising lies in its ability to make merchandise appealing to the eye of the beholder. If a display catches the eye of a customer, that individual lingers on the product. The longer an individual lingers on a product, the more likely that individual is to purchase a product.
In many respects, the importance of merchandising lies in its ability to psychologically manipulate the customer. Ultimately, beyond food, water and clothing, no piece of merchandise found in a store constitutes a necessity for the customer. Merchandising uses visual cues such as color, shape and associations created through imagery to convince a customer to buy or at least consider buying a certain product. When successful, the psychological impact of merchandising drives up sales, generates product awareness, creates a comfortable visual environment for the customer and pumps money into the retail outlet. It can also affect the way people see certain products, thus influencing future purchasing decisions.