Merchandising: Understanding the Concept and its Types

In marketing, it’s important to showcase your products appealingly to your customers to get more sales.

To achieve this, various methods and strategies are implemented that attract customers, sell products and increase sales. Knowing the customer’s interest plays an important role in merchandising.

These strategies give value to the product that tempts the customer’s mind to buy it. There are different types of strategies involved in merchandising your products.

Keep reading the article to learn more about what merchandising is and its types.

Table of Content

  • What is Merchandising?
  • Types of Merchandising
    1. Product Merchandising
    2. Visual Merchandising
    3. Retail Merchandising
    4. Omnichannel Merchandising
    5. Digital Merchandising
  • What is Merchandising Hierarchy?
  • Layout for better Merchandising
  • Strategies for Merchandising
  • Points to Keep in Mind while Planning Merchandise

What is Merchandising?

Merchandising is promoting the goods and products to customers and making sales. To sell a product, it is important to merchandise it in a way that attracts customers.

It is a process that involves various strategies to present a product that looks appealing to the customer’s eye. Various factors involve merchandising such as offers, attractive packaging, decorating products shelves, display designs, and more.

It is important to keep yourself updated on the latest trends and customers’ needs. This will help you apply new strategies to sell your products. Before moving further down, you would like to explore Traditional merchandising vs eCommerce merchandising.

Types of Merchandising

Merchandising can be divided into various categories. Here are five types of merchandising:

1. Product Merchandising

It involves promoting the products by highlighting their features. Activities like banners describing product features and their specialty written on them come under this category.

product merchandising

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2. Visual Merchandising:

It involves visual attractions to call the attention of customers using display design, lighting, arrangement, color combinations, and more.

visual merchandising

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3. Retail Merchandising

It refers to selling products in a physical store. This can be expanded to shopping malls and retail markets.

retail merchandising

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4. Omnichannel Merchandising

This type of merchandising includes selling the products through both online and offline stores. This can be done via shops, mobile apps, and websites.

omnichannel merchandising

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5. Digital Merchandising

When products are promoted online through social media, emails, digital marketing, and other mediums; it reaches a wide range of audiences who later become customers.

Click here to learn about what is digital merchandising.

digital merchandising

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Interesting read for you: Top e-Commerce merchandising strategies

What is Merchandise Hierarchy?

Merchandise hierarchy is the group of levels that contribute individually to merchandising and selling. This involves six levels that will help the customer easily reach their needs. Below are the levels that can help your merchandise better:

what is merchandise hierarchy

  • Store: This is the highest and most important level to design and populate in a way that is not cluttering the products and looks disciplinary attractive.
  • Department: Customers usually look for a particular department when they visit a store. Placement of products based on their categories will help customers find products easily.
  • Division: Here it is important to divide the department into further sections and place products according to that division. This way it will be easier for customers to buy what they are looking for.
  • Product: Grouping similar products would engage the customer to look for more variety. This will help to increase sales and profits.
  • Class: Products that share similar qualities can also be grouped to add variations that help to know customers’ interests.
  • Sub-class: This includes attributes due to which customers buy the products that share similarities in terms of color, size, etc, that can be grouped.

Layout for Better Merchandising

Layout refers to the store layout that is designed in a way to merchandise the products, keep customers engaged, and buy more products.

The store layout is also equally important to merchandise and increases sales. Space in-store should be enough for the customer to move around comfortably and access the items on the display.

The design of the store layout should be in a way that engages the customer toward the product section and encourages them to make more purchases.

The layout should not be confusing for customers which might irritate them. Changing the look of the store every 6 months or 1 year will make it more appealing and attractive to the customers. The placement of the products should be categorized and assembled for better visibility and accessibility.

Guiding the customers to show the best products in the store can help in increasing sales and profits. Place the most purchased products on another side of the store. This will allow customers to walk around the store to have a look at other products available.

Strategies for Merchandising

To merchandise products, strategies are important to plan and implement. Creativity helps to think in a unique way to gain customers’ attention. Below are a few strategies listed:

  • Follow the trend
  • Display the premium products in a creative way
  • Proper attention to customer needs
  • Customer Service
  • Multiple payment options
  • Theme as per festivals
  • Eye-level visibility of products
  • Grouping of products
  • Categorizing products properly
  • Vouchers for future purchases

Points to Keep in Mind while Planning your Merchandising Strategies

  • Turnover Ratio: It is important to plan everything you do to merchandise your products. It will also help to stock your warehouse to increase the inventory turnover ratio.
  • Out of Stock: Planning can save you from Out of Stock situations. The products, their availability, their selling price, and their time will ensure the maintenance of stock in inventory.
  • Cost: Regular maintenance of stock inventory reduces other costs like labor, maintenance, depreciation, etc, and makes sure there is no unwanted stock in the inventory.
  • Revenue: Product availability and increased sales help to generate revenue.


Merchandising is a marketing approach that focuses on keeping a customer’s attention and interest in your store. It is a key part of the customer service model, which focuses on the relationship between the store and its customers.

All these methods and strategies elaborate on what merchandising is and how to implement it. From setting up a business to selling products, following these pointers will speed up your merchandising and the sales process.