Advantages and Disadvantages of Merchandising

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A woman is holding up a dress in a store.
A woman is holding up a dress in a store. (Image: Hill Street Studios/Blend Images/Getty Images)

Merchandising the products in your store is a challenging necessity if you want to attract more shoppers and move more products off your shelves. Understanding the advantages and disadvantages of merchandising is key to finding ways to draw people into your store who feel enthused about buying right then. Understanding the ins and outs of merchandising also helps you create a positive atmosphere in your store that entices shoppers to return to buy in the future.

Boosts Sales

One of the major advantages of merchandising, when it's done right, is the boost in sales. Effective merchandising, whether at the front of your store, in point-of-purchase displays near the cash register or on shelves or at displays scattered throughout the store, helps shoppers notice products they may not have noticed otherwise. Plus, strong merchandising helps move more of your best-selling products and proven winners, giving you a way to make even more money as the goods fly off the shelves.

Targeting Wrong Shoppers

Done wrong, merchandising may turn off shoppers from making a purchase from the display. Worse yet, they may not return to your store in the future. This makes knowing your target market important for identifying the merchandise they are most likely to buy. For example, if you sell holiday-themed products from a store located in an area with various religions but choose to only set up Christmas displays, you’ll lose sales from customers who do not celebrate that holiday.

Lack of Balance

Showcasing too few products or not changing the displays frequently enough may turn people off from coming into or returning to your store. For instance, using your front window displays to feature a few items in a big space and leaving it that way for months on end makes your store look less successful than it may be. The same holds true if you place too many items in your displays. Not only do the displays appear cramped, but the point of selling a specific item is lost on shoppers.

Getting the Most Value out of Products

Products that don’t move off of the shelf over a period of weeks or months usually require a markdown to get people to buy them, resulting in lower profit margins. Merchandising the items before they need to be marked down is key to getting full price for the products. The key to merchandising items is to take inventory frequently, especially of products with a short shelf life, to see what’s selling and what’s not. Then, you can focus on setting up displays to push the slower-moving products.

Lack of Experience

Using your staff to handle merchandising when they do not have experience in doing so can be disastrous for your store. Merchandising requires an eye for combining colors and using lighting. Knowing how to arrange shelves and create attractive displays so best-selling items stand out is also critical. If you or your staff lacks experience, you should hire a professional visual merchandise expert to set up your displays.

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