What is merchandising? Merchandising is the practice of managing how products are presented, priced and promoted to increase sales and improve customer experience in both retail and e-commerce.
McKinsey research shows effective merchandising can raise revenue by up to 10 percent.
This guide explains the purpose, types, strategies, roles and benefits of merchandising, with practical examples and tips entrepreneurs can apply globally.
See also: Proven steps to start a successful business.
Key Takeaways
- Merchandising is the process of managing product selection, pricing, placement, and presentation to drive sales and improve customer experience.
- The main types include retail, visual, e-commerce, cross-merchandising, and seasonal merchandising, each with unique strategies.
- Merchandisers play a critical role by planning assortments, optimising layouts, managing inventory, and tracking performance metrics like GMROI and sell-through.
- Effective merchandising boosts revenue, enhances brand identity, and creates consistent customer experiences across both retail and digital channels.
What Is Merchandising? Definition and Purpose
Merchandising is the process of ensuring that products are available, presented, priced, and promoted in ways that influence customer buying decisions.
It applies to retail stores, e-commerce platforms, and omnichannel businesses that operate across both physical and digital spaces.
The purpose of merchandising is to increase sales, optimise inventory, and enhance customer satisfaction by aligning product demand with supply and presentation.
The Purpose of Merchandising
The purpose of merchandising can be grouped into four key outcomes:
| Purpose of Merchandising | Description | Example |
|---|---|---|
| Drive Sales | Position products to encourage purchase | End-cap display in a supermarket |
| Optimise Inventory | Prevent stockouts and reduce excess | Replenishment systems in fashion retail |
| Enhance Customer Experience | Make products easy to find and appealing | Website filters and visual displays |
| Strengthen Brand Image | Reinforce brand identity through presentation | Consistent in-store and online branding |
Merchandising is not limited to arranging products on shelves or online catalogues. It is a business system that connects assortment planning, pricing strategies, visual presentation, and digital personalisation with customer behaviour.
When executed well, it creates a seamless path to purchase and improves both revenue and brand loyalty.
Types of Merchandising
Merchandising takes different forms depending on the channel, customer, and product. Below are the main types of merchandising entrepreneurs and business leaders should know.
Retail Merchandising
Retail merchandising focuses on how products are displayed in physical stores. It includes shelf arrangements, signage, product adjacencies, and promotions. The goal is to make products easy to find and encourage impulse buying.
Visual Merchandising
Visual merchandising is about the look and feel of a store. It uses lighting, colour, props, mannequins, and window displays to attract attention and influence perception.
A well-executed visual strategy strengthens brand identity and creates an emotional connection with customers.
E-commerce Merchandising
E-commerce merchandising applies merchandising principles to digital platforms. It includes homepage layouts, product listing pages (PLPs), product detail pages (PDPs), searchandising (optimising search results), and personalised product recommendations.
Online merchandising focuses on conversion, basket size, and customer retention.
Cross Merchandising
Cross merchandising involves placing related products together to boost sales. In physical stores, this could be chips displayed next to soft drinks. Online, it can be “Frequently Bought Together” or “Complete the Look” suggestions.
Seasonal and Event Merchandising
Seasonal merchandising leverages holidays, festivals, and events to boost sales. This includes holiday-themed displays in stores and online campaigns tied to key dates. It creates urgency and relevance for customers.
Table: Types of Merchandising at a Glance
| Type of Merchandising | Key Focus | Example |
|---|---|---|
| Retail Merchandising | Shelf space, signage, promotions | Grocery store end-cap displays |
| Visual Merchandising | Store aesthetics, props, displays | Fashion mannequins and lighting |
| E-commerce Merchandising | Online product placement and personalisation | Homepage banners, PDP cross-sells |
| Cross Merchandising | Related product placement | “Complete the Look” bundles |
| Seasonal Merchandising | Event and holiday-driven campaigns | Christmas gift sections in retail or online |
What Does a Merchandiser Do?
A merchandiser is responsible for planning, organising, and executing merchandising activities that drive sales and improve customer satisfaction.
The role connects product availability, pricing, presentation, and promotions to ensure customers can easily find and buy what they need in both retail and e-commerce settings.
Key Responsibilities of a Merchandiser
| Responsibility | Description | Example |
|---|---|---|
| Assortment Planning | Deciding the range and depth of products to stock | Choosing styles and sizes for a fashion store |
| Pricing and Promotions | Setting prices and designing offers that attract customers | Running a “Buy One Get One Free” campaign |
| Space and Layout Planning | Allocating shelf space or designing online product layouts | Using a planogram in a supermarket |
| Visual Presentation | Creating appealing displays in-store or online | Designing a festive window display |
| Inventory Management | Ensuring stock availability without overstocking | Replenishing fast-selling products |
| Data Analysis | Tracking performance metrics such as sales, GMROI, and sell-through | Analysing which promotions generate the highest ROI |
Different Types of Merchandisers
Visual Merchandiser
Focuses on the store environment, window displays, props, and layouts that influence customer perception.
Category Merchandiser
Manages product categories, pricing strategies, and promotions to maximise sales and profitability.
E-commerce Merchandiser
Optimises digital storefronts, including search results, product recommendations, and online campaigns to improve conversion rates.
Allocator or Inventory Merchandiser
Monitors stock levels, plans replenishment, and ensures the right products are in the right locations.
Why the Merchandiser Role Is Important
The role of a merchandiser is vital because it directly influences sales, customer experience, and brand consistency. In e-commerce, it determines how easily customers find products.
In retail, it shapes how customers interact with the store environment. For entrepreneurs, hiring or developing merchandising expertise ensures products are not only stocked but also sold profitably.
If you are building a team and need expert guidance, our Ask an Expert service at Entrepreneurs.ng can connect you with professionals who will help you structure merchandising processes that fit your business.
Key Aspects of Merchandising
Merchandising combines several core aspects that determine how effectively products move from shelf or screen to customer basket.
These aspects apply to both retail and e-commerce, although the tools and execution may differ.
Product Assortment
This refers to the range, depth, and mix of products offered. Merchandisers plan assortments based on customer demand, seasonality, and profitability.
A balanced assortment ensures choice without overwhelming the customer.
Pricing and Promotions
Pricing strategies influence purchase decisions. Merchandisers set competitive prices and create promotional campaigns such as discounts, bundles, and loyalty offers to increase sales volume and basket size.
Space and Placement
In retail, this involves shelf allocation, end-cap displays, and store layouts. In e-commerce, it includes category pages, search results, and product placements. Effective space planning ensures high-demand products are easy to find.
Visual Presentation
Visual merchandising shapes the customer experience through colour, lighting, imagery, and design. Online, this translates into high-quality product photos, videos, and descriptive content.
Personalisation and Digital Optimisation
In digital channels, personalisation is a critical aspect of merchandising. It includes customised recommendations, searchandising, and curated landing pages.
Studies show that personalisation can lift sales revenue by up to 10 percent (McKinsey).
Data and Analytics
Merchandising relies on metrics such as GMROI, sell-through, and conversion rates. Tracking data helps businesses adjust strategies, improve performance, and reduce waste.
Table: Key Aspects of Merchandising
| Aspect | Focus | Example |
|---|---|---|
| Product Assortment | Range and depth of products | Offering multiple sizes and styles in fashion |
| Pricing and Promotions | Competitive pricing and campaigns | Discount codes in e-commerce |
| Space and Placement | Physical shelf or digital layout | End-cap in-store or featured product online |
| Visual Presentation | Look and feel of products | Mannequins, product images, videos |
| Personalisation | Tailored recommendations | “Frequently Bought Together” bundles |
| Data and Analytics | Performance tracking and adjustment | Monitoring GMROI and conversion rates |
Entrepreneurs who want to strengthen these aspects in their businesses can leverage our Entrepreneurs Success Blueprint program.
It provides a structured approach to building and scaling businesses with clear merchandising, marketing, and growth systems.
Purpose of Merchandising
The purpose of merchandising is to connect customer needs with product availability in a way that drives sales, reduces waste, and strengthens brand loyalty.
It is about ensuring the right products are in the right place, at the right time, with the right price and presentation.
Driving Sales and Revenue
Merchandising directly impacts purchase decisions by positioning products for visibility and appeal. Well-planned merchandising increases conversion rates both in-store and online.
Optimising Inventory and Reducing Waste
Through effective assortment and replenishment planning, merchandising reduces overstocking and stockouts. This leads to healthier cash flow and better return on investment.
Enhancing Customer Experience
Merchandising makes products accessible and attractive. In retail, this could mean clear signage and store layouts. In e-commerce, it could be filters, searchandising, and product recommendations.
Building Brand Identity
Consistent merchandising reinforces a brand’s image. Colours, displays, and messaging tell a story that influences how customers perceive the business.
Table: The Purpose of Merchandising
| Purpose | Impact | Example |
|---|---|---|
| Drive Sales and Revenue | Higher conversion and average order value | Cross-sell offers online |
| Optimise Inventory | Reduce stockouts and markdowns | Automated replenishment in retail |
| Enhance Customer Experience | Make shopping seamless | Clear navigation in e-commerce stores |
| Build Brand Identity | Strengthen recognition and loyalty | Consistent seasonal displays |
Entrepreneurs who want to align merchandising with business growth can use our Comprehensive Business Plan Template. It helps structure pricing, product assortment, and marketing strategies into a profitable plan.
Merchandising Strategies
Merchandising strategies are the methods businesses use to present, promote, and manage products so that sales and customer satisfaction increase.
These strategies apply in both retail and e-commerce but take different forms depending on the channel.
Assortment Strategy
Carefully choosing which products to stock and how deep to go in each category is critical. A strong assortment balances customer demand with profitability.
Pricing and Promotion Strategy
Strategic use of competitive pricing, discounts, and bundles attracts customers and drives volume. Limited-time offers create urgency and boost sales.
Visual and Store Layout Strategy
In physical stores, using planograms, signage, and engaging displays guides customers through the store. In e-commerce, optimised category pages and high-quality images keep users engaged.
Cross-Merchandising Strategy
Placing complementary products together increases basket size. In online stores, this appears as “Frequently Bought Together” or “Complete the Look” recommendations.
Personalisation Strategy (Digital Merchandising)
Tailoring online experiences with customised product recommendations and personalised search results increases conversion rates and repeat purchases.
Table: Key Merchandising Strategies
| Strategy | Focus | Example |
|---|---|---|
| Assortment | Product range and depth | Offering seasonal items alongside core products |
| Pricing and Promotion | Attracting buyers through competitive offers | Buy One Get One Free campaign |
| Visual and Layout | Guiding customer flow and engagement | Window displays or homepage banners |
| Cross-Merchandising | Boosting basket size | Chips displayed with salsa, or online bundle offers |
| Personalisation | Customised shopping experiences | Recommended items on checkout pages |
Merchandising Business Examples
Merchandising is best understood through practical examples that show how businesses apply strategies in retail and e-commerce.
These examples demonstrate how products are positioned to maximise sales and improve customer experience.
Retail Merchandising Examples
- A supermarket placing bottled drinks near snack shelves to encourage impulse buying.
- A fashion retailer using mannequins to display full outfits that inspire customers to buy multiple pieces.
- An electronics store showcasing a laptop with compatible accessories such as headphones and wireless mice to increase basket size.
E-commerce Merchandising Examples
- Online fashion stores using “Complete the Look” features that recommend shoes and accessories with a dress.
- E-commerce platforms placing bestsellers in homepage hero banners to drive traffic to high-margin products.
- Product detail pages showing “Frequently Bought Together” bundles that increase average order value.
Table: Merchandising Business Examples
| Channel | Example | Impact |
|---|---|---|
| Supermarket | Drinks displayed near snacks | Encourages impulse purchases |
| Fashion Retail | Mannequins with full outfits | Increases multiple-item sales |
| Electronics | Laptop bundled with accessories | Raises basket value |
| Online Fashion | “Complete the Look” feature | Boosts cross-selling online |
| E-commerce Homepage | Bestseller featured on banner | Drives traffic to high-margin items |
| Online Product Pages | “Frequently Bought Together” bundles | Increases average order value |
Entrepreneurs can adopt these merchandising practices regardless of business size. If you want to position your products where business leaders and decision-makers will see them, explore our Advertising Packages. They ensure your brand reaches the right audience through strategic placement on Entrepreneurs.ng.
See also: Digital Marketing for Entrepreneurs: The Ultimate Guide to Growth in the AI Era
Benefits of Merchandising
Merchandising offers businesses measurable benefits that go beyond product presentation. I
t drives sales, improves efficiency, enhances customer loyalty, and strengthens profitability across both retail and e-commerce.
Increased Sales and Revenue
Effective merchandising influences customer buying behaviour. When products are well-placed, clearly priced, and visually appealing, customers are more likely to make a purchase.
Improved Inventory Management
By planning assortments and tracking sell-through, merchandising reduces overstocking and markdown losses. It ensures businesses invest in the right products at the right time.
Enhanced Customer Experience
Customers value easy-to-navigate stores and seamless online shopping journeys. Merchandising improves accessibility, making it easier for buyers to find what they need quickly.
Stronger Brand Positioning
Consistent presentation, from store displays to digital product pages, reinforces brand identity and helps businesses stand out in competitive markets.
Higher Profit Margins
Merchandising strategies like cross-selling and bundling increase average order value, while better inventory control improves gross margin return on investment (GMROI).
Table: Benefits of Merchandising
| Benefit | Impact | Example |
|---|---|---|
| Increased Sales | More purchases and higher AOV | Cross-sell bundles in e-commerce |
| Improved Inventory | Fewer stockouts and markdowns | Replenishment planning in fashion |
| Enhanced Experience | Better shopping journeys | Store signage or product filters online |
| Stronger Brand Positioning | Clear brand identity | Seasonal visual displays |
| Higher Profit Margins | Improved ROI and profitability | GMROI improvement through markdown control |
Merchandising vs Service Company
Merchandising companies and service companies operate with very different business models. Understanding the distinction helps entrepreneurs position their ventures correctly and choose strategies that match their operations.
Merchandising Company
A merchandising company sells physical products. Its focus is on buying goods from suppliers and reselling them to customers at a profit.
Success depends on effective inventory management, pricing, product placement, and customer demand.
Service Company
A service company provides intangible solutions rather than physical goods. Its value lies in expertise, time, or access to specialised skills.
Examples include consulting firms, software-as-a-service businesses, and cleaning services.
Key Differences Between Merchandising and Service Companies
| Feature | Merchandising Company | Service Company |
|---|---|---|
| Core Offering | Tangible products | Intangible services |
| Revenue Model | Buy, mark up, and sell goods | Charge fees for time, expertise, or access |
| Inventory | Requires inventory management | No inventory required |
| Customer Value | Product availability and price | Quality and delivery of service |
| Example | Retail fashion store | Business consultancy |
For entrepreneurs, knowing whether you run a merchandising business or a service company helps in structuring operations.
Merchandising requires investment in stock, space, and supply chain systems, while service companies focus on skills, people, and delivery frameworks.
If you are starting a merchandising business and need professional support with registration and compliance, you can use our Business Registration Service. This ensures your business is set up legally and positioned to scale.
Tips for Retail and E-commerce Merchandising
Merchandising works differently across retail and e-commerce, but the goal remains the same: making products visible, appealing, and easy to buy.
These practical tips will help you optimise both physical and digital channels.
Retail Merchandising Tips
Use Planograms and Eye-Level Placement
Position priority products at eye level and arrange items logically so customers naturally find complementary goods. Well-executed shelf planning increases visibility and reduces lost sales.
Make Prices and Promotions Clear
Ensure price tags are visible and promotional zones stand out. End caps and feature displays help draw attention to seasonal or high-margin products.
Apply Cross-Merchandising
Pair related products together. Pasta displayed with sauces or razors with shaving cream encourage customers to buy more in one trip.
Refresh Displays Regularly
Rotate key displays often to maintain a sense of newness. Seasonal themes keep customers engaged and increase foot traffic.
Localise Product Assortments
Adapt inventory to fit the preferences of your store’s location. Matching cultural and regional buying habits improves relevance and sales.
E-commerce Merchandising Tips
Strengthen Internal Search
Shoppers using search often convert at higher rates. Make results relevant and easy to refine with filters like size, colour, and price.
Curate Product Listing Pages
Place high-demand and in-stock products at the top of categories. Use sorting and filtering options to simplify the shopping journey.
Optimise Product Detail Pages
Clear titles, quality images, customer reviews, and concise descriptions reduce hesitation and improve add-to-cart rates.
Use Personalised Recommendations
Show tailored suggestions on product pages, baskets, and checkout. Personalisation keeps customers engaged and encourages repeat purchases.
Bundle Complementary Products
Offer “Frequently Bought Together” or “Complete the Look” bundles. Bundling raises average order value while creating convenience for customers.
Design for Mobile First
Most shoppers browse on phones. Ensure fast load times, easy navigation, and clear visuals on mobile devices.
Omnichannel Merchandising Tips
Align Messaging Across Channels
Keep promotions and hero products consistent in-store and online. This builds trust and strengthens brand identity.
Integrate Store and Online Inventory
Allow customers to check local store stock online or use click-and-collect services to capture more sales.
Leverage Data Across Channels
Use insights from online search and browsing data to guide in-store displays, and apply store sales data to improve digital rankings.
Table: Quick Wins in Merchandising
| Channel | Quick Win | Why It Works |
|---|---|---|
| Retail | Eye-level placement | Improves product visibility and sales |
| Retail | Cross-merchandising | Encourages larger basket size |
| Retail | Regular display refresh | Keeps store experience fresh |
| E-commerce | Optimised product detail pages | Reduces hesitation, boosts conversion |
| E-commerce | Personalised recommendations | Builds loyalty and repeat sales |
| Omnichannel | Consistent promotions | Creates a unified customer experience |
Core Merchandising Processes: Step-by-Step
Merchandising is a structured process that connects product planning, pricing, space, and presentation to customer demand.
Following a clear step-by-step approach helps businesses manage inventory efficiently, improve sales, and create a consistent customer experience across retail and e-commerce.
Step 1: Define Objectives
Set measurable goals for sales, profit margins, customer experience, and inventory turnover. Objectives guide the entire merchandising process.
Step 2: Analyse Data
Use past sales, market trends, and customer behaviour to understand what products to stock, how much to order, and how to price them.
Step 3: Plan Assortment
Select the right range and depth of products. A good assortment balances core items with seasonal or trend-driven products to meet customer needs without overwhelming them.
Step 4: Optimise Pricing and Promotions
Decide on pricing strategies and promotional plans that align with customer demand and profitability targets.
Step 5: Design Space and Layout
For retail, create planograms and store layouts that guide traffic flow and highlight key items. For e-commerce, design homepage, category, and product detail pages with customer navigation in mind.
Step 6: Execute the Plan
Implement product placement, displays, pricing, and promotions across all channels. Consistency ensures customers experience the same brand message everywhere.
Step 7: Monitor Performance
Track key merchandising metrics such as sell-through, GMROI, conversion rates, and average order value.
Step 8: Adjust and Improve
Use insights from performance tracking to refine assortment, promotions, and layouts. Continuous improvement ensures long-term success.
Table: Core Merchandising Processes
| Step | Focus | Outcome |
|---|---|---|
| Define Objectives | Set sales and profit goals | Clear direction for merchandising plan |
| Analyse Data | Review sales and customer behaviour | Evidence-based decisions |
| Plan Assortment | Choose product range and depth | Balanced and relevant offering |
| Optimise Pricing & Promotions | Set competitive prices and campaigns | Increased sales and margin control |
| Design Space & Layout | Allocate physical and digital space | Improved visibility and accessibility |
| Execute the Plan | Implement across retail and e-commerce | Consistent brand experience |
| Monitor Performance | Track KPIs like GMROI and conversion | Identify successes and gaps |
| Adjust and Improve | Refine based on results | Continuous optimisation |
This step-by-step process shows how merchandising is not just about product placement but a complete business system that combines strategy, execution, and measurement.
The Merchandising System: The 4+2 Ps You Actually Control
The merchandising system is built around six levers that businesses can control to influence customer decisions and sales.
These are often referred to as the 4+2 Ps: Product, Price, Place, Presentation, plus Personalisation and Placement.
Product
Product is the foundation of merchandising. It covers assortment planning, product mix, and depth. Choosing the right products ensures relevance and customer satisfaction.
Price
Pricing strategies impact how customers perceive value. Merchandisers manage price points, discounts, and markdowns to balance sales growth with profitability.
Place
Place refers to product positioning. In retail, this includes shelf space, planograms, and end-caps. In e-commerce, it includes product listings, filters, and homepage layout.
Presentation
Presentation focuses on the look and feel of the shopping experience. In-store, it involves lighting, signage, and displays. Online, it means product photography, descriptions, and UX design.
Personalisation (Digital P)
Personalisation is critical in e-commerce. It involves tailoring recommendations, search results, and promotions based on customer behaviour. Studies show personalisation can lift revenue by up to 10 percent.
Placement (Digital P)
Placement covers how products are displayed digitally. This includes paid placements, featured listings, and algorithmic ranking in search results or category pages.
Table: The 4+2 Ps of Merchandising
| P | Focus | Example in Retail | Example in E-commerce |
|---|---|---|---|
| Product | Assortment and mix | Seasonal and core products | Balanced product catalogue |
| Price | Pricing and promotions | “Buy One Get One Free” offer | Flash sales or promo codes |
| Place | Physical and digital positioning | End-cap displays in supermarkets | Homepage featured collections |
| Presentation | Visual appeal and UX | Window displays, signage | High-quality photos, videos |
| Personalisation | Customised experiences | Loyalty offers in store | Recommended items online |
| Placement | Digital prioritisation | NA | Sponsored or algorithmic search results |
The 4+2 Ps show that merchandising is more than stocking shelves or updating product pages. It is about controlling the levers that shape how customers discover, value, and buy products across channels.
Metrics That Are Important in Merchandising
Measuring performance is central to effective merchandising. Metrics reveal whether strategies are improving sales, managing inventory, and delivering profitable growth.
The following key metrics help businesses evaluate merchandising success across retail and e-commerce.
Gross Margin Return on Investment (GMROI)
GMROI measures how much gross profit is earned for every unit of currency invested in inventory. A higher GMROI means inventory is generating more profit.
Formula:
GMROI = Gross Margin ÷ Average Inventory Cost
Sell-Through Rate
This measures the percentage of inventory sold within a given period. A strong sell-through rate shows efficient inventory management.
Formula:
Sell-Through % = (Units Sold ÷ Units Received) × 100
Inventory Turnover
Inventory turnover shows how often stock is sold and replaced. Higher turnover indicates efficient stock management and reduced holding costs.
Formula:
Inventory Turnover = Cost of Goods Sold ÷ Average Inventory
Average Order Value (AOV)
AOV tracks the average spend per transaction. Merchandising tactics like bundling and cross-selling directly influence AOV.
Formula:
AOV = Total Revenue ÷ Number of Orders
Conversion Rate
This metric measures how many visitors complete a purchase. For e-commerce, conversion rate is a key indicator of how well products are presented and promoted online.
Formula:
Conversion Rate = (Number of Purchases ÷ Number of Visitors) × 100
Table: Key Merchandising Metrics
| Metric | What It Measures | Formula | Why It Matters |
|---|---|---|---|
| GMROI | Profitability of inventory | Gross Margin ÷ Avg. Inventory Cost | Shows return on inventory investment |
| Sell-Through Rate | Inventory efficiency | (Units Sold ÷ Units Received) × 100 | Indicates product demand and turnover |
| Inventory Turnover | Frequency of stock sold/replaced | COGS ÷ Avg. Inventory | Reduces holding costs and improves cash flow |
| Average Order Value (AOV) | Average spend per customer | Total Revenue ÷ Orders | Tracks basket-building effectiveness |
| Conversion Rate | Visitors who buy | (Purchases ÷ Visitors) × 100 | Reflects merchandising and UX effectiveness |
Tracking these metrics allows businesses to fine-tune merchandising strategies and ensure resources are driving profitable growth.
Merchandising Tools and Team Roles
Merchandising requires the right tools and skilled teams to deliver consistent results. Tools provide structure and insight, while teams translate strategy into execution across retail and e-commerce.
Merchandising Tools
| Tool Category | Purpose | Example of Use |
|---|---|---|
| Planogram Software | Designs shelf layouts and product facings | Arrange end-caps in supermarkets |
| Analytics Platforms | Tracks sales, GMROI, and sell-through | Monitor conversion rates and AOV |
| Pricing and Promotion Tools | Automates markdowns and promotional campaigns | Run flash sales online |
| Recommendation Engines | Personalises product suggestions | Show “Frequently Bought Together” bundles |
| Content Management Systems (CMS) | Manages digital product listings and media | Update e-commerce product detail pages |
| Inventory Management Systems | Tracks stock levels and replenishment | Align supply with demand in retail |
Merchandising Team Roles
Visual Merchandiser
Focuses on the store environment by creating engaging window displays, layouts, and signage that drive customer attention.
Category Merchandiser
Manages product categories, pricing, and promotions to maximise sales and profitability.
E-commerce Merchandiser
Optimises digital storefronts by managing searchandising, product recommendations, and online promotional banners.
Allocator or Inventory Merchandiser
Ensures the right products are sent to the right stores at the right time. Monitors sell-through and replenishment cycles.
Merchandising Analyst
Uses data and reporting tools to track performance and guide decision-making. Analysts are critical for refining assortment, pricing, and promotions.
Table: Merchandising Roles and Responsibilities
| Role | Key Focus | Example Activity |
|---|---|---|
| Visual Merchandiser | Store layout and displays | Designing seasonal shop windows |
| Category Merchandiser | Pricing and product categories | Planning promotions for a product line |
| E-commerce Merchandiser | Online product placement | Managing homepage banners |
| Allocator | Stock distribution | Sending more units to high-demand locations |
| Merchandising Analyst | Data and performance metrics | Tracking GMROI and making recommendations |
Merchandising Audit Checklist
A merchandising audit allows businesses to evaluate how effectively products are being presented, priced, and promoted.
Below is a 10-point checklist presented as subheadings, covering both retail and e-commerce.
Product Visibility
Best-selling and seasonal products should always be positioned where customers can easily see them.
In retail this means eye-level shelves and end-caps, while in e-commerce it means homepage banners and featured product sections.
Pricing Clarity
Prices must be accurate, visible, and competitive. Clear shelf labels in stores and transparent pricing on product detail pages online prevent confusion and build trust.
Promotional Execution
Campaigns should be consistent across channels and run as planned. Seasonal displays in-store and digital campaigns online should complement one another.
Stock Availability
Popular items must be in stock and replenishment systems should prevent shortages. Real-time inventory updates online and reliable supply management in-store are both essential.
Cross-Merchandising
Complementary products should be grouped together. In physical stores, this means strategic shelf placement, while in e-commerce it appears as “Frequently Bought Together” or “Complete the Look” features.
Visual Presentation
The shopping environment should reflect brand identity and remain visually appealing. Window displays, product images, and page layouts must all align with the same standard.
Customer Navigation
Shoppers must be able to find products easily. Clear signage in retail and intuitive search with effective filters online make the experience seamless.
Personalisation
In e-commerce, recommendations should be tailored to customer preferences. Loyalty offers in-store can serve a similar purpose by reinforcing individualised experiences.
Data and Metrics Tracking
Merchandising success depends on tracking metrics such as GMROI, sell-through rates, conversion, and average order value. Regular reporting supports informed decisions.
Consistency Across Channels
The brand message, promotions, and pricing should align across retail and e-commerce. This unified approach strengthens brand credibility and builds trust.
Table: Merchandising Audit Checklist
| Checklist Item | Retail Focus | E-commerce Focus |
|---|---|---|
| Product Visibility | End-caps, eye-level shelves | Homepage banners, featured items |
| Pricing Clarity | Clear shelf labels | Transparent pricing on PDPs |
| Promotions | Seasonal displays | Digital campaigns and pop-ups |
| Stock Availability | Replenishment cycles | Real-time stock updates |
| Cross-Merchandising | Grouping complements | “Frequently Bought Together” |
| Visual Presentation | Window displays | High-quality images and videos |
| Customer Navigation | Signage and layout | Search and filters |
| Personalisation | Loyalty offers | AI-driven recommendations |
| Data and Metrics | Store sales reports | Analytics dashboards |
| Channel Consistency | Same promotions offline and online | Unified brand message |
Conclusion
Merchandising is more than arranging products on shelves or digital pages. It is a business system that connects product selection, pricing, placement, and presentation with customer demand to drive sales and strengthen brand identity.
For entrepreneurs, mastering merchandising means creating seamless shopping experiences, improving inventory efficiency, and increasing profitability across retail and e-commerce.
The principles and strategies shared in this guide give you a foundation to apply merchandising effectively in your business. Start small, measure results, and refine your approach to build long-term success.
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Frequently Asked Questions About Merchandising
What is merchandising in simple terms?
Merchandising is the process of making products available, visible, and attractive so customers are more likely to buy them. It covers product selection, pricing, placement, and presentation in both retail stores and e-commerce.
What are the types of merchandising?
The main types of merchandising are retail merchandising, visual merchandising, e-commerce merchandising, cross-merchandising, and seasonal merchandising. Each focuses on how products are presented and promoted to increase sales.
What does a merchandiser do?
A merchandiser plans and manages how products are stocked, priced, displayed, and promoted. Their role covers assortment planning, visual presentation, inventory control, and analysing performance data to ensure products sell profitably.
What is the purpose of merchandising?
The purpose of merchandising is to connect customer demand with product availability. It drives sales, improves inventory turnover, enhances customer experience, and builds a strong brand image.
What are merchandising strategies?
Merchandising strategies are the methods businesses use to influence customer purchases. These include assortment planning, pricing and promotions, cross-merchandising, personalisation, and visual storytelling.
Can you give examples of merchandising in business?
Yes. In retail, a supermarket placing soft drinks next to snack foods is an example of cross-merchandising. In e-commerce, a clothing store offering “Complete the Look” suggestions is a merchandising example that boosts average order value.
What are the benefits of merchandising?
Benefits of merchandising include increased sales, reduced stockouts, higher profit margins, improved customer experience, and stronger brand positioning.
How is a merchandising company different from a service company?
A merchandising company buys and sells physical products, focusing on inventory and sales. A service company provides intangible offerings such as consulting, training, or software.
The key difference is that merchandising requires product management, while service businesses rely on expertise and delivery.
What are the best tips for retail merchandising?
Best tips for retail merchandising include using planograms, keeping prices clear, applying cross-merchandising, refreshing displays regularly, and adapting assortments to local customer needs.
What are the best tips for e-commerce merchandising?
For e-commerce, focus on optimising internal search, curating product listings, strengthening product detail pages, using personalised recommendations, bundling products, and ensuring mobile-first design.
What is GMROI in merchandising?
GMROI stands for Gross Margin Return on Investment. It measures how much gross profit is earned for every unit of currency invested in inventory. It shows how effectively stock generates profit.
Is merchandising part of marketing?
Merchandising and marketing are connected but not the same. Marketing creates demand by promoting a brand and its products, while merchandising converts that demand into sales through product availability, placement, and presentation.
