Last Updated on April 12, 2023

Merchandising business definition and examples

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What is the first thing that captures your attention when you walk into a retail and merchandising business store? Is it the vibrant colors? The fragrant perfume that also seems to float across the entire store? The way lighting hits products in merchandising business by drawing your eyes in, causing an itch in your wallet so bad that you have to scratch it?

Merchandising business, whatever it is, you swear that the decision you made in buying that sweater that looks awful as the others in your wardrobe was your choice. What others don’t know, is that when you step into a store or visit your favorite online shop, you’re under the magic spell of a merchandising business. 

So, what is merchandising business?

This is also, an entity that sells tangible goods to customers. It can be through a location or online through an eCommerce store/ website. Merchandising business might be the producer of the goods or retailer of the products without actual ownership of the goods in-store or on its website.


The term ‘merchandising’ is for promoting and selling goods. Other actions performed by companies that might fall under the broad term ‘merchandising’ include;

  • Use of interactive displays that incorporate sound, scent, and motion technology to influence the buyer’s decision and increase sales.
  • In-store and window displays with eye-catching shapes and styles.
  • Product promotions and giveaways, especially during holidays such as Easter, Christmas, ‘Back-to-school’ promotions. This is useful for seasonal products.
  • Free product tasting sessions and distribution of samples.
  • In-store demonstrations
  • Well planned eye-level product placement.
  • Well-stocked shelves and displays.

For merchandising strategy, Business must care about its customers, tastes, preferences, and beliefs.

This is to avoid promotions that might be deemed ‘off-putting’ or offensive. Like Cinderella with her glass slipper! Merchandising strategies were the difference between being found and selected by the prince or being cast out like the stepsisters.

Therefore, some large companies hire merchandising experts to advise on aspects that could influence the consumers’ decisions. For a merchandising business strategy to be effective, it must be specific in terms of the goals it seeks to reach.

Is it to increase brand awareness, draw foot traffic to the location, increase sales, or garner customer loyalty? The merchandising strategy must be developed and expertly executed for business benefit. E-commerce businesses, similar to merchandising tactics are also employed for enticing both potential and existing customers by increasing sales, such as;

  • Live chat to support customer queries and concerns.
  • Ensuring the search bar is easily visible to the site visitor.
  • Offering free shipping for selected products.
  • Status bar to show progress as the customer moves through the sales process.
  • Season-specific content and product offers.
  • Unique product descriptions supported by high-quality images, copy, attributes, videos, and other digital data.
  • Product recommendations
  • Authentic ratings and reviews
  • Effective product categorization

Although this sounds like Sales, it’s not! The two terms, though similar, have a slight but perceptible difference. 

The difference between Sales and Merchandising

Merchandising refers to all activities performed to lead a potential customer to a sale. All actions we’ve described so far, such as product placement on shelves, scented retail shops, interactive displays, promotions, and product giveaways.

These count as efforts performed by a merchandising business to interest people and interact with the brand. On the other hand, Sales is the actual selection and purchase of a product by a customer. For a more layman understanding: Merchandising and sales are different between admiring a pretty woman And taking her out on a date!

Types of Merchandising

Merchandising is a reference to business strategies for customers. Concrete terminologies recognized in the business world, such as;

1. Product merchandising

This refers to all activities undertaken to promote and sell products both in-store and online. The term product merchandising means service merchandising. Although similar to a degree, service merchandising refers to the promotion and sale of services only. 

2. Retail merchandising

This refers to all the promotional and marketing activities employed to sell products within a retail space. The term Retail Merchandising is mainly for products sold from a physical retail space. Nevertheless, it can also be extended as a reference to selling off goods from pop-up shops and other temporary locations.

3. Visual merchandising

This refers to the display techniques used to highlight the appearance and benefits of products and services sold in a retail store. Visual merchandising would include lighting, spacing, and design that physical and online stores. can apply.

In respect to the online retail experience, visual merchandising would incorporate aspects such as web design, the use of GIFs, videos, and any other visually appealing tools. This is to whet the appetite of prospective consumers and entice them to buy.

4. Digital merchandising

Although quite similar to visual merchandising, digital merchandising refers to all promotional activities to influence consumers to buy from a particular eCommerce store or website. Digital merchandising can incorporate everything from website performance, digital product displays, digital marketing, and email marketing initiatives.

Benefits of merchandising

The practice of merchandising business is as old as the word itself, with ancient Indians quickly realizing that to beat their competition (fellow exotic spice and silk merchants), they also had to devise innovative ways to capture their customer’s imaginations and earn their loyalty.

Little has changed in today’s world except for the drastic increase in distractions vying for a potential customer’s mind and wallet. Whether a store chooses; to hire pretty girls at the check-out counter, spray scented floral perfumes at the entrance or install mood lights to create the right atmosphere in the store.

The ultimate aim is to increase sales and gain customer loyalty in the merchandising business. Aside from the more apparent benefits, merchandising also helps to:

  • Increase profits through an increase in customer traffic both in-store and offline.
  • It leads to higher shopper satisfaction as potential customers experience the subtle perks added to their shopping experiences, such as soothing music, free samples, good lighting, and others.
  • It ensures faster inventory turnover through increased sales.
  • Relationships with potential and current consumers are solidified, thereby increasing brand loyalty.
  • There is an increase in brand recognition, especially if all stores have the same standard of service, shop outlay, and customer experience.
  • While comparing to other marketing techniques, merchandising is mostly a reasonably inexpensive way of increasing sales.

Merchandising business solutions are not a ‘one size fits all. Therefore, merchandising companies base their decisions on what merchandising solutions they will follow carefully while considering varied factors. The techniques employed by merchandisers globally though unique, carry some similar essential components such as;

1. First impressions

In merchandising business, like in most other aspects of life, first impressions count and creating a genuinely memorable first-time experience, whether in-person at a physical store location or on a website landing page.

That could be the difference between building a long-lasting and profitable relationship with a customer, or never seeing that person again. Extra care and attention are paid to each detail in order so as to captivate the potential customer’s mind. This might mean a change in colors, lighting, music, and other elements that subtly influence the mind.

For online retailers, speed is one of the most critical elements. Research indicates that slow-loading pages lose as high as 53% of their site visitors if it takes longer than 3 seconds for the page to load.

2. Lights. Action. Camera!

Suppose you’ve ever watched a play or production at a theatre. You must have also noticed the way that lights were manipulated so as to enhance certain moods and highlight performances, also emphasizing certain scenes.

In the same way, lights in a retail store are often employed for merchandise. Customer’s attention is thus drawn to unique products by elevating customer’s mood, or even by setting a certain ‘tone’ within the store. Apple stores, for instance, often use exclusively white backgrounds against their steel grey computers to emphasize precision, craftsmanship, and also the elegance of products.

3. Don’t hold the traffic!

Ever wondered why supermarkets the world over insist on placing the milk section at the back of the store? So, over the years, merchandising business companies have devised clever ways to manipulate and control traffic within their physical locations. This is to increase the amount of time a customer is likely to spend in a store.

Merchandising companies know that everyone will need milk at some point or the other. Milk is placed at the back hoping that a casual stroll around the supermarket will encourage the purchase of other products.

The websites hereby encourage in order to navigate their site traffic through different prompts. This increases the amount of time spent on site and hopefully translates into increased sales.

4. It’s not rocket science, per se!

In a bid to win the hearts and minds of consumers across the globe, merchandising business companies have turned to data science to help solve unique retail challenges. By means of application from a responsive merchandising business, eventually, the merchandising companies are given real-time insight into the needs and wants of customers.

Merchandising companies have also turned to the world of psychology to understand the human mind, its pleasure triggers/center, also artificially enhance dopamine levels through manipulation of elements of store design.

Like mad scientists in a lab, merchandising companies have gone to great lengths to understand the inner workings of their target customer’s brains. Although highly competitive, a few global companies have made a second language of merchandising by outpacing the others using unique strategies. A few examples include:

1. Browzwear

Being the leading provider of 3D fashion, development, and merchandising solutions. It connects brands and retailers globally. This is done by aiding processes, decreasing the number of samples, and merchandising garments even before they are produced.

The headquarters are in Singapore and R&D in Israel. The customer service centers are located in the US and Europe. The company is perfectly poised for handling complex merchandising needs for brands across the globe.

2. Spice technology group

For organizations with complex supply chains, the spice technology group enables modern commerce for organizations. Spice has over 7500 organizations worldwide, ranging from global brands and retailers to local manufacturing and distribution companies.

3. WestRock

WestRock is an American corrugate packaging company which created in July 2015. So after the merging of MeadWestCo and RockTenn, recognized as the second-largest packaging company in America.

4. 7thonline

This is a leading merchandise planning and execution platform. The company gained recognition for its transformation of merchandise planning and execution in the apparel, footwear, and accessories industries.

5. Aptos

Aptos is one of the leading merchandising companies globally with an expert level specialization in merchandising, commerce, customer, and so order management solutions. The company operates in a diverse range of industries, including apparel, cosmetics, and more.

This employs the skills and talents of millions of people across the globe. So, bringing along products and services to your doorstep through the implementation of unique marketing techniques.

Look at the items within your home alone. Therefore the majority would not be available without the coordinated marketing efforts of merchandising companies and getting you what you need.

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