Developing Merchandising Strategies to Market Your Products

By Jeanette McMurtry

Merchandising strategy, the selection and assortment of products offered, creates the foundation of competitive advantage or disadvantage for retailers. The more creative the product offerings and marketing strategies, the greater advantage you have over other retailers.

Following are some general strategies and ideas that may get you thinking in new ways about your business.

General merchandise retailing

The general merchandise retailing strategy allows you to appeal to more people due to having a wide and deep assortment of products, but it also puts you in a very competitive category, which requires a lot of resources to survive. Competitors include department stores, like Macy’s and Lord & Taylor, and big‐box retailers, like Target and Walmart. These businesses have been in place for years and have shrewd negotiators who can get costs down below reason in many cases, making it hard for you to match their prices. Now with the huge sizes of Super Targets and Walmart Supercenters, it can be even harder to match the selection they offer in any category.

Limited‐line retailing

The limited‐line retailing strategy is another term for specialty or boutique store. A specialty bakery offers more depth and variety of baked items than a grocery store because that’s all it does. Starbucks is a great example of a limited‐line strategy. It sells coffee — coffee‐based specialty products, coffee cups, coffee mugs, cookies that go with coffee, and so on.

If you’re competing with an established brand like Starbucks, find a new or local twist that makes your experience a bit different. One example of a coffee shop that really competed with Starbucks and won is one that catered to the healthy sports activist. It sponsors a bike team, sells bike paraphernalia, and offers a sports‐bar type atmosphere, which draws local sports enthusiasts after a great workout or bike ride. Its prices are similar to Starbucks, but it caters to the locals’ lifestyle and offers healthy alternative snacks instead of just rich pastries, something Starbucks has not done well. It’s been successful for many years and even added a new location.

Scrambled merchandising

Consumers have preconceived notions about what product lines and categories belong together, but retailers have been redefining those notions and succeeding. People used to go to one store for one thing and another store for another thing. But now, you can pretty much find a bit of everything almost anywhere — fast‐food restaurants in big‐box stores, coffee shops adjacent to gas stations, and bookstores and ski shops with coffee shops interweaved.

This combination of non‐related product lines is called scrambled merchandising and works well in many locations because it adds interest to the shopping experience and offers consumers convenience at the same time. Think on what you can do to combine two product lines of interest to your consumer base in a way that makes sense, is interesting, and is something people want to buy at the same time.

Stimulating sales at point of purchase

The point of purchase (POP), where customer meets product, represents a critical opportunity to increase your sales. Although customers may have a planned purchase in mind when heading to your store, research shows that the majority of their purchases are actually unplanned ones.

It’s like going to the grocery store for just one thing you need and ending up with $100 worth of groceries you didn’t have in mind at the time. This is the phenomenon of POP advertising, those signs on the shelves or end‐cap aisles that “remind” consumers they need these items, too. This table shows you just how important POP is given the percentage of unplanned purchases at grocery stores and mass merchandise stores. (The statistics are from Point of Purchase Advertising International.)

Nature of Consumers’ Purchase Decisions
Supermarkets Percent of Purchases Mass Merchandise Stores Percent of Purchases
Unplanned 60% 53%
Substitute 4% 3%
Generally planned 6% 18%
Specifically planned 30% 26%

Your direct, mass, and display advertising and social media drives people to your store. Your merchandise selection, POP advertising and messaging, pricing and display strategies, atmosphere, and interactive experiences get them to purchase more. And when it all comes together in ways that are inspirational and aspirational, they come back for more and bring others with them. This should be your ultimate goal.

Here are some tools you can use to improve engagement and enthusiasm for shopping at your store:

  • Place signage on shelves to draw attention to products that you want to boost sales.
  • Set up free‐standing floor displays that grab attention for products and promotional prices.
  • Add QR codes to displays, signage, and other POP communications if you want to give customers ways to link directly to a promo or an informational web landing page.
  • Display signage with a scannable app code (supplied by a 3D app maker) that in turn produces an augmented reality display on the shopper’s phone or tablet. Let your shoppers see in augmented reality how that hat, bracelet, or other product will look on them. When you make the experience “real” through engaging technologies, consumers internalize the value of your products and become emotionally charged, and that is when you up your chances to close the sale. See the nearby sidebar on augmented reality for more.

Exciting displays increase atmosphere and the entertainment value of the shopping experience. If you’re a retailer, create displays to promote your specials. If you’re the manufacturer, create displays to help retailers sell more of your product. A good display should

  • Attract attention. Make your displays novel, entertaining, or puzzling to draw people to them.
  • Build involvement. Give people something to think about or do to involve them in the display. Again, end‐cap demonstration stations or product demo videos work well.
  • Sell the product. Make sure the display communicates the positioning of your brand and the emotional and functional values of your product. Make it as inspirational and aspirational as possible.

Before spending a lot of money on displays to ship out to retailers to help sell your products at their places of business, survey them first to assess the likelihood of use. Between 50 and 60 percent of marketers’ POPs never reach the sales floor. If you’re a product marketer who’s trying to get a POP display into retail stores, you face an uphill battle. The stats say that your display or sign needs to be twice as good as the average, or the retailer simply tosses it into the nearest dumpster.

For purely e‐commerce sales that don’t involve POP advertising, you can create similar attention for your product and spark unplanned purchases during the online shopping process. Consider using more aspirational photographs, streaming video demonstration of the product, testimonials, and special offers with time limits to create a powerful sense of urgency. Video blogs showing your product’s function and features can help drive traffic to your online store as well.

Technology changes and changes quickly for all businesses. You must stay on top of marketing technology changes that impact how you distribute, sell, and market your products and the type of experiences you can create. If you don’t, others will, and you may not survive. Best advice for anyone in marketing today? Don’t blink!