Merchandising Overview: 7 Elements of Visual Merchandising

Merchandising, also called visual merchandising, involves all of the visual presentation strategies that a company uses to sell its inventory in stores and online. In their visual merchandising, brick-and-mortar retail businesses focus on physical display techniques, like in-store and point-of-purchase displays, window merchandising, and focal points. Meanwhile, online stores focus on digital product presentation, email marketing, and other digital merchandising techniques and marketing strategies. They also consider the customer journey, including which products the customer sees first and how they will reach the point of sale.

In addition to increasing sales, effective merchandising has many potential benefits for businesses, including increased in-store foot traffic for physical businesses, customer loyalty, optimized floor space for more merchandise, and quicker product turnover. Product merchandising may also include the supply chain strategies and methods to streamline the purchase, manufacturing, or distribution of wholesale goods or products.

Many visual merchandising strategies can help businesses increase sales and enhance the customer experience. An effective visual merchandiser will consider the potential customers they can attract and create an experience tailored to their interests. Here are some fundamental variables that store owners typically consider when planning store merchandising:

1. 1. Store layout: Retailers often use a planogram, or schematic drawing, to help optimize their store layout, ensure proper product placement, and maximize sales. An effective store layout maximizes the amount of inventory that customers can browse and allows you to cater to their needs. This floor-space optimization helps businesses streamline the natural flow of foot traffic and is why stores often display similar inventory together. For example, a clothing store might stage clothing organized by style or gender before their fitting rooms, typically located in the back of a store. A toy store might have lower shelving for kids to access the inventory.
2. 2. Signage: Physical or digital signage, both outside and inside your store, alerts customers to current promotions and highlights specific products that are new or on sale. Signage can also notify your customers about points of interest in your store, such as the sales section, the register, fitting rooms, and restrooms. E-commerce stores will often use banners at the top or bottom of a webpage to recommend similar products or showcase new inventory.
3. 3. Product displays: Store displays—like point-of-purchase displays, “speed bumps,” or focal point displays—present your newest and most noteworthy inventory throughout the store in eye-catching ways that entice customers to browse. Merchandising displays might be at the entrance to the store or an endcap at the checkout right before a customer makes a purchase.
4. 4. Window merchandising: This merchandising element is one of the most effective ways to attract customers to your storefront. Retailers might place special merchandise outside in window displays or near the store’s entrance to showcase what kind of products they sell. An online store might use banners or pop-ups to highlight sales or new products on the site’s front page.
5. 5. Lighting: Stores can use lighting to highlight specific areas of the floor strategically, using bright or dim lighting to set the mood for a shopping experience. Some retail stores will place a light over their checkout counter to show customers where to go to pay for their items. Displays are another popular place for stores to place lighting to highlight the newest and most interesting inventory.
   
6. 6. Pricing: Pricing plays a large role in convincing a customer to purchase. For example, tactics like pricing a product at ninety-nine cents versus one dollar can help sell products. Promotional pricing—like limited-time percentage markdowns—can create a sense of urgency, encouraging your customers to buy a product during the short period when you are selling it at a lower price. Most e-commerce and retail businesses will use percent discounts to motivate buying decisions.
7. 7. Seasonality: A major component of retailing is preparing for holiday sales, and most retail chains will customize their experience for holidays like Valentine’s Day or Easter in the springtime. Stores will decorate the interior and exterior of their stores and may change the types of merchandise they sell to match the particular season.

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