Picture this: you’re walking into your favorite coffee shop. Right from the doorway, you’re greeted by the aroma of freshly ground coffee, and your eyes are drawn to a beautifully displayed case of pastries. This isn’t a coincidence—it’s merchandising in action!
In this article, we’ll examine this topic in more detail, from its fundamental principles and key elements in the online space to practical applications across different industries. You’ll learn the most important merchandising techniques and the benefits of implementing them effectively.
Stay with us and discover how to make your customers more likely to purchase.
What is Merchandising?
Merchandising encompasses thoughtful strategies for promoting products and boosting sales, both in physical spaces and on digital platforms. It’s much more than just arranging products on shelves—it’s a strategic approach to product presentation and sales that can make or break a retail business.
Take a supermarket, for example. Have you noticed that bread and baked goods are usually at the store’s back? That’s no coincidence! As you go through the store looking for fresh rolls, you pass dozens of other products that might end up in your cart. And those candies by the checkout? That’s a classic example of merchandising that takes advantage of the moment you’re standing in line and more susceptible to impulse purchases.
The 5 Ps of Merchandising
The foundation of effective merchandising is known as the 5 P’s rule. It defines five key elements that determine successful product sales. Let’s look at how they work in retail practice.
- Planning: comprehensive preparation of sales strategy based on historical data and forecasts. It includes analyzing past sales periods, predicting trends, and inventory planning. It’s particularly crucial when managing seasonal assortment changes and planning promotions.
- Positioning: strategic building of product image relative to competition. It determines how the brand is presented, its values, and target audience. An example of this practice is displaying premium products at eye level while cheaper items occupy lower shelves.
- Promotion: active measures to increase sales through customer incentives. It uses tools such as loyalty programs, displays, and POS (Point of Sale) materials like stands and posters. Examples include food tastings in grocery stores or testers in beauty shops.
- Pricing: setting optimal prices that consider costs, competition, and customer expectations. It includes discount strategies and margin management. In practice, it means varying prices based on location, season, or target group.
- Placement: strategic organization of retail space to maximize product exposure. It considers hot zones (near entrances, at eye level) and cold zones (bottom shelves, end aisles). Key products are placed in areas with the highest customer traffic.
Online Merchandising – Key Elements
In the online world, merchandising works similarly with the same goal – maximizing sales and customer satisfaction. The key difference lies in the use of technology and data.
Below are several key elements used by e-commerce platforms and other online services to influence visitors’ purchasing decisions effectively.
Personalization
Personalization means tailoring content to individual users based on their history and preferences. It works like a virtual salesperson who remembers customer preferences. The main personalization techniques include:
- recommendations based on purchase history and behavior
- customized banners and content based on user preferences
- personalized promotions and special offers
- dynamic page content changes
Product Presentation
In the online space, the key challenge is replacing physical product interaction. A well-prepared presentation should give customers all the information needed to purchase. The main elements of effective presentation include:
- High-quality photos from different angles
- Detailed descriptions and technical specifications
- Customer reviews and ratings
- Video content and 360° presentations
Navigation
Website navigation using merchandising techniques must be maximally intuitive and efficient. Well-designed navigation allows users to find desired products and discover new ones quickly. Effective navigation relies on the following:
- Intuitive categories and subcategories
- Advanced filters and search functionality
- Search suggestions
- Simplified purchase path
- Cross-selling
Analytics
Online platforms have the unique ability to track user behavior in detail. Collected data enables continuous optimization of sales strategy. Key analytical tools include:
- user behavior tracking
- A/B testing of layout and content
- promotion effectiveness analysis
- cart monitoring
- conversion optimization
Visual Merchandising
In the online world, the first visual impression is crucial for building brand image and encouraging purchases. Consistent visual identity builds trust and professionalism. The most important elements are:
- consistent page layout
- visual highlighting of promotions
- page scalability (including mobile optimization)
- ad optimization
Benefits of Merchandising – How Proper Product Presentation Impacts Sales
Increased Store Traffic
Merchandising techniques, such as professionally designed retail spaces, significantly influence customers’ purchasing decisions. Studies show that 76% of consumers enter previously unknown stores, attracted by just the signage and storefront.
Sales Growth
The main reason brands use merchandising is, of course, increased sales. Techniques like well-planned product displays in stores can boost sales by up to 540% compared to chaotic or neglected displays.
Retail Space Optimization
Understanding natural customer behaviors allows for effective retail space design. Supermarket chains effectively utilize the fact that 90% of customers turn right upon entering the store – that’s why fresh products, bakery items, and fruits are often located in this part of the store. Clothing stores, in turn, take advantage of the tendency to scan products first horizontally (looking for categories) and then vertically (selecting specific products) – hence their characteristic department and display layouts.
Impulsive Shopping Stimulation
Strategic merchandising effectively encourages unplanned purchases. Statistics show that 62% of all brick-and-mortar store purchases are impulsive buys. Beauty retailers like Sephora and Douglas capitalize on this by strategically placing testers, while grocery stores place candies and beverages at checkout counters.
Enhanced Brand Image and Customer Loyalty
Research shows that merchandising positively impacts customer loyalty. Loyalty programs are particularly effective tools, with 62% of shoppers being members. Moreover, 95% of them admit that the discounts offered influence their purchasing decisions.
Increased Shopping Cart Value
A well-created atmosphere significantly affects shopping behavior. For example, 70% of customers admit that appropriate music encourages them to stay longer and make larger purchases. Luxury boutiques especially utilize this by playing classical music, noting that customers not only spend more time in their stores but also tend to choose more expensive products.
Examples of Merchandising Across Different Industries
E-commerce
This sector represents the most dynamically developing area of merchandising. E-commerce platforms use purchase history and customer behavior data to create personalized recommendations and optimize page layouts. They focus on strategic product positioning in search results and creating effective cross-selling in shopping carts.
Travel
Online travel agencies use advanced merchandising techniques to present travel offers. One example is the Pin Item feature in Qtravel Search, which allows strategic pinning of selected offers at the top of search results based on specific criteria or keywords. It enables travel agencies to highlight their best offers effectively and increase conversion rates.
Moreover, travel platforms also employ dynamic package bundling, countdown timers for offers, “last seats at this price” notifications (popular with airlines), highlighting bestsellers, and cross-selling additional services (such as hotel or car rentals in destinations where flights have been booked).
Retail
Traditional retail remains the area where merchandising has its most tangible dimension. Clothing stores use mannequins and themed displays to showcase current collections. Supermarkets design aisle layouts based on consumer behavior research, while drugstores create product testing zones.
Food Industry
The food service sector uses merchandising to build appetite and increase order values. Restaurants and cafes use glass displays to showcase fresh pastries and desserts, while professionally designed menus with food photos encourage larger orders.
Entertainment and Culture
The entertainment and cultural sector uses merchandising to build emotions and interest in offerings. Movie theaters display large-format posters and movie standees, theaters create atmosphere through costume and prop displays, and museums use interactive installations to present exhibitions. All these elements serve not only to inform about offerings but primarily to build audience engagement.
Try Merchandising for Yourself
As you can see, merchandising is a key element of effective sales, both in physical and digital spaces. Proper product presentation techniques, offer personalization, and strategic positioning can significantly influence customers’ purchasing decisions and build long-lasting brand relationships.
And if you want to see how effective merchandising works in practice — try out the Qtravel Search demo and discover how easily you can manage the visibility of travel offers and increase their sales.