Why Is Retail Merchandising Important?

by Melanie McIntosh

Recently I was told that merchandising and display are frivolous extra expenses for the small business owner who is just starting up. The implication was that expenses such as marketing, rent, inventory, utilities, staffing, etc. are 'serious' expenses, while merchandising and display are 'frills'.

I couldn't disagree more. Merchandising and display are an important part of the marketing plan, and should have a reasonable budget allocated - even for a retailer operating on a shoestring.

In today's competitive retail environment a retailer cannot afford to consider merchandising as a 'frill'. Everyone is competing for the customers' dollar. There are more choices out there for consumers than ever before.

With all these choices, what will grab the consumer's attention? You've invested the money to get that expensive, high traffic location, but how will you keep the customers from walking right by your door? How will you encourage them to return? What is unique about your store? After investing money on the important priorities such as merchandise, great location, part-time staff, insurance, accountant, advertising, your carefully budgeted money can be lost if your store doesn't measure up to the customers' expectations.

Posters covering the door and windows, hand lettered signs, lack of lighting and untidy displays send the message that your business isn't serious. If your store looks like a bargain basement, customers will expect bargain basement prices and may draw the conclusion that your product is poor quality. This judgment may have little to do with the product itself, but be the result of poor presentation.

Merchandising is more than simply the arrangement of products on the shelf. It is an integral component of the business image. It should be considered when you design your logo, business cards, brochures, letterhead, packaging, and product mix.

When you examine your merchandising, you examine what the customers' experience, from their first sight of your store front, until they leave store - hopefully with a purchase in hand. Merchandising is also about understanding the way customers shop. By using this knowledge, you can position your merchandise to increase sales.

You need to create an environment that attracts the customer, is comfortable to shop, and encourages the customer to return.

- Are the store front and windows attractive & inviting?
- Is all signage clear, professional and legible?
- Is the store interior welcoming and comfortable?
- Is merchandise presentation appealing?
- Are seasonal and high-margin merchandise placed in high profile locations?
- Overall, is the store appearance professional?

Of course, if you are on a shoestring budget, you need to start small, but make sure you include a plan for growth. One of the exciting things about retail is that it is dynamic. If you don't grow and change, customers assume you have nothing new to offer them. You don't have to overhaul the
entire store, but rotate merchandise, change displays, and change signage to make the customer feel that there is always something new for them to see or experience.

Including merchandising in your marketing plan and budget makes sense. It can make the difference between selling a product, or having it sit on the shelf.