Merchandising Your Small Business
 
What is Merchandising?
Why is Merchandising Important?
Key Elements to Effective Merchandising
Where Businesses Go Wrong When it Comes to Merchandising
Questions to Ask Yourself When Merchandising
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WHAT IS MERCHANDISING

You can think of merchandising as the art of designing and implementing displays for merchandise into your store. These displays should create a mood for purchasing by your customers. It is possible to create more than just a mood for buying, though. If you are successful with your displays and store layout, you customers will begin to realize that they are buying more than just items, they are experiencing the anticipation of a positive and conducive shopping environment within your store. It is these experience that create a loyal customer base, which will distinguish your business from others.

 
References
anonymous. (1997) Visual Merchandising. Cincinnati, OH:  ST Publications

Mills, Kenneth H. (1988) Applied Visual Merchandising. Englewood Cliffs, NJ:  Prentice Hall Publishing

Rosenburg, Jerry M. (1995) Dictionary of Retailing and Merchandising. New York, NY:  Wiley Publishing

Shuch, Milton. (1988) Retail Buying and Merchandising. Englewood Cliffs, NJ:  Prentice Hall Publishing

Tharp, Lewis. (1989) The Complete Guide to Promotional Merchandise. Homewood, IL : Dow Jones Irwin

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WHY IS MERCHANDISING SO IMPORTANT

Because customers are the people who will eventually make or break your business, it is important to make you store more visually appealing. Your customers’ purchasing decisions will be heavily influenced by the presentation of the merchandise in your store. To do this effectively you will want to stimulate your potential customers in a number of ways, from initially attracting them in your store to having displays which will entice them into purchases. They key to having a successful is to understand and implement effective visual merchandising into your business objectives.

 
References
anonymous. (1997) Visual Merchandising. Cincinnati, OH:  ST Publications

Mills, Kenneth H. (1988) Applied Visual Merchandising. Englewood Cliffs, NJ:  Prentice Hall Publishing

Rosenburg, Jerry M. (1995) Dictionary of Retailing and Merchandising. New York, NY:  Wiley Publishing

Shuch, Milton. (1988) Retail Buying and Merchandising. Englewood Cliffs, NJ:  Prentice Hall Publishing

Tyreman, David and Walton, Clark. (1998) Visual Merchandising Ups Sales. Discount Store News, 37(13), 19

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KEY ELEMENTS TO EFFECTIVE MERCHANDISING

• windows and walls - Windows, if properly used, can help to draw customers into your store. Although they are clearly an external part of the store, they are an important ingredient in displaying merchandise that will stimulate your potential customers into entering your store. Window displays provide a visual image about the type of merchandise for sale in your store and he type of image that your store is trying to portraying. The display that you place in your windows should be tied to other merchandise and other displays that you have set up within your business. Another important area that is often overlooked is wall space. Since retail space is often scarce and expensive, it is important that you increase your ability to store extra stock, display merchandise, and creatively present a message by utilizing wall space. While your merchandise is stored on shelving and racks, displays that you place near the ceiling that coordinate with your merchandise will help the customer identify with that merchandise and help to increase sales.

• lighting - Good lighting in your store is more than just the illumination of space. Effective use of lighting is used to highlight your merchandise, to sculpt space and to help capture a mood or feeling to enhance your customer’s image of your store. A good lighting system helps to create a sense of excitement in your store. When determining The lighting of your outlet, you will want to remember that the lighting should complement the customer and make the items which you are selling to become more attractive to that customer. Another key use of lighting is focusing spotlights on special feature areas or items within your store. Learning to use lighting to focus on strategic pockets of your merchandise will begin to train your customers’ eyes on the merchandise and will draw them through the layout of your store. The use of non uniform lighting with warm, white light in your store will create a sense of privacy, personalized service, and high service. Where as a store with higher light levels, cooler tones of white and more peripheral wall brightness are usually associated generic products, lower prices, and fewer sales associates.

• color - The creative use of color will help to enhance your store’s image and help to create a mood for your customers. Customers associate certain colors with different moods and images, and by changing the color of the store or window displays within your store can dramatically alter the visual image that your customers have of your business. For instance, the use of warm, white light colors can create a feeling of privacy, personalized service, and high quality for you customers. Whereas, cool tones of color can create a sense generic products, lower prices, and fewer employees to assist your customers.

• store layout - To design a good store layout, the managers/designers of your store must meet certain objectives. First, the layout of your store should entice customers to move around the store in order to purchase more merchandise than they had originally planned on purchasing. A second objective that you will want to meet, is to provide a good balance between giving your customers adequate space in which to shop and using this space as productively as possible. If you happen to fill your store with too many racks and displays, it will cause your customers to become disoriented and even confused. To assist you in meeting these objectives, there are alternative store layout design types that will make your decision making easier. These three design types are grid, boutique, and free form, no one way to organize your store is better than the other.
 
 GRID - In a grid layout, you should arrange the merchandise on long racks in a repetitive pattern. Though this is not the        most aesthetically pleasing arrangement for a retail outlet, it is very good for customers who plan throughout the entire store. There is also less wasted space with this layout because all of the aisles are all the same width and you can display more merchandise with this design than any other. The grid layout is the most space productive and also the most cost effective.

 BOUTIQUE - The main idea behind the boutique layout design is to get your  customers to visit multiple area of your store and to entice them through the store  with a series of minor loops of feature merchandise. This design layout is more  common in larger department store settings, but it ban be applied to smaller retail  businesses.

 FREE FORM - The free form layout has been most successful for small business operators. With this design layout, you will want to arrange fixtures and displays  asymmetrically to create a more relaxed atmosphere. In this relaxed environment,  your customers will feel more like they are at someone’s home, which facilitates  shopping. One problem with this design is that your customers are not naturally  drawn around your store, so it becomes more important that your employees assist  the customers with their needs. You will also sacrifice some storage and display  space to achieve this pleasant atmosphere. Be aware that this pleasant atmosphere  in not inexpensive, but if your store is carefully designed, the increased cost will  easily be offset by your increased sales and profit margins.

• eye level shelving - The ideal shelf space that you can provide is at eye level because that is where your customers will look first. When making merchandise presentation decisions, it is important that you view your store through your customer’s eyes. Shelving that is either lower to ground or above the customer’s heads should be tilted in the appropriate direction so that it is more readily viewed by your customers. It is also important that when displaying your merchandise that you expose as much of the product as possible to try to catch the customer’s attention.

References
anonymous. (1997) Visual Merchandising. Cincinnati, OH:  ST Publications

Bolen, William H. (1982) Contemporary Retailing. Englewood Cliffs, NJ:  Prentice Hall Publishing

Colbornes, Robert. (1982) Fundamentals of Merchandise Presentation. Cincinnati, OH:  ST Publications

Pegler, Martin. (1996) Lifestyle Stores. Glen Cove, NY: Rizzoli Publishing

Wahl, Michael. (1992) In Store Marketing: A New Dimension in the Share Wars. New York, NY:  Sawyer Publications

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WHERE BUSINESSES GO WRONG WHEN IT COMES TO MERCHANDISING

• space productivity - In recent years, many small retail businesses have been confronted with the problem of a decline in space for merchandise while prices for retail outlets our on the rise. Tom combat this problem, you will want to improve space productivity by getting greater use of cubic space in your store. To increase the profitability of that space, you will want to begin thinking of store layout by utilizing height to your advantage. Designing your store with the greatest utilization of cubic feet, not just floor space. You should avoid creating long, boring aisles of merchandise by varying the height of displays by using feature items.

• customer service - Your customers will be motivated to evaluate your store and its staff when an unexpected or unusual problem arises or when they need special attention. It is very important to educate and train your employees well on your policy(s) so that they can inform customers about what is happening, what can be done, and why their requests can or cannot be met. In many situations that may arise, your customers will be content simply be receiving accurate information. In other situations, your employees will need to be empowered to use their best judgment in dealing with service problems. In such situations, your employees will be the vital link between your business and your customers and they need enough authority to take the appropriate action(s). Your customers and how you service them is what will eventually make or break your business.

• the need for stimulation - You must not be satisfied with flat empty spaces filled with long rows of racks or shelves. Merchandise presentation like this does not stimulate your customers into making further purchases at your store. To aid in the customer stimulation of your store, make your store multilevel or add ramps. If your floor must be flat for certain needs, at least vary the height of your displays to help avoid the monotonous presentations that plague some retail outlets.

References
anonymous. (1997) Visual Merchandising. Cincinnati, OH:  ST Publications

Bolen, William H. (1982) Contemporary Retailing. Englewood Cliffs, NJ:  Prentice Hall Publishing

Colbornes, Robert. (1982) Fundamentals of Merchandise Presentation. Cincinnati, OH:  ST Publications

Pegler, Martin. (1996) Lifestyle Stores. Glen Cove, NY: Rizzoli Publishing

Wahl, Michael. (1992) In Store Marketing: A New Dimension in the Share Wars. New York, NY:  Sawyer Publications

 
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QUESTIONS TO ASK YOURSELF WHEN MERCHANDISING

1. Are there any new trends, in your particular industry, that deserve your attention?
2. What is your competition doing with concern to merchandising?
3. Is the merchandise vendor using a “national” merchandising campaign?
4. Does the merchandise vendor help share the risk of failure?
5. Does the merchandise provide the opportunity for the sale of complementary  goods?

References
anonymous. (1997) Visual Merchandising. Cincinnati, OH:  ST Publications

Rosenburg, Jerry M. (1996) Dictionary of Retailing and Merchandising. New York, NY: Wiley Publishing
 

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This page was written by Michigan State University student Benjamin Cruickshank
Dept. of Park, Recreation & Tourism Resources