Introducing retail merchandising: the secret to success for product-based businesses
Retail merchandising is the secret to selling more product and increasing your profits. At Flourish Retail, we’re all about helping small and medium businesses understand and use the merchandising expertise that bigger brands have at their fingertips.
Unsurprisingly, lots of small businesses don’t know what retail merchandising is. And you’ll find that plenty of bigger businesses aren’t really sure of the detail either (though they probably wouldn’t admit it).
We’re here to change all that, demystifying merchandising and introducing some of the key ways it can transform your business. Let’s start with the basics.
What is merchandising?
Merchandising (noun): [mur-chuhn-dahy-zing]
What springs to mind when I say ‘merchandising’? Window dressing? Eye-catching displays? Organising stock on shelves?
You wouldn’t be the only one. Lots of people think that this type of visual promotion is what I do.
And while ‘visual merchandising’ is really important in the world of retail, it seems that the other, crucial side of merchandising is a well-kept secret.
As merchandisers, we hold the secrets to generating sales and profit
We all want those things, right? Well, it’s all in the planning.
In big retail businesses (think ASOS, H&M or Zara), merchandisers work closely with buyers, analysing sales and trends to get the best results (and by results, we mean profit). Think of it like this:
The merchandiser writes the shopping list that the buyer uses when they select products. The list guides the buyer (and the business) on the amount of money available to spend, the number of lines and the quantities needed. I guess another way to look at it is to see the merchandiser as the buyer’s ‘accountant’.
As merchandisers, we create that shopping list to ensure that the right products appear on sale in the right place, at the right time, in the right quantity and at the right price so that we satisfy both the business’ goals and the customers’ demands.
That’s no mean feat (and one impressive shopping list).
Merchandising doesn’t stop at the shopping list, though
After the buying phase, merchandisers control the delivery of stock, distribution, and performance during the season (otherwise known as the selling phase!). As well as trading our products, we’ll be planning promotions and markdowns to maximise sales and that all-important profit.
All that makes merchandising relevant to you, me and ASOS. It’s your new BFF.
Merchandising isn’t just for big brands. It’s for you, too
The Flourish Tool Kit is your ticket to merchandising like a pro. It’ll help you
Analyse and make the right decisions
Plan your products for the days, weeks and months ahead
Er… make more PROFIT (as if you hadn’t realised that by now!), and
Free up time for the fun side of your business.
If you get your merchandising right you can focus on what you love, whether that’s being creative, crafting fantastic products, marketing your brand, delighting customers or enjoying the odd cup of tea when you get a chance*.
(*other beverages are available)
Want in on the Flourish Tool Kit?
Extra extra! What do all those words mean?
This is meant to be a starter’s guide to merchandising, so let’s give a proper introduction to some of these words and phrases. You’ve probably heard them before, but you might not be 100% clear on where they fit in the bigger merchandising picture.
1 · Sales
The amount of money you will take in a given time period.
Most merchandising plans will break down what you will need to sell at full price and at discount to hit your profit target. We call this ‘markdown’, and you can find out more about it here.
2 · Profit
The difference between the amount earned (selling price) and the amount spent to produce your product or service (cost of goods).
3 · Right place
Working out where to stock your products to potentialise your sales.
We decide where to allocate stock by analysing your previous sales and taking current trends (such as an increase in online sales) into account.
For example…
You have two stores which sell cushions. One is in London and one is in Edinburgh. You also have a website. Last year, your Edinburgh store sold more cushions than your London one, and although you only sold five cushions online, that’s increasing. You have a new line of 100 cushions, so you decide to maximise sales by sending 60 to Edinburgh, 25 to London and keeping 15 for the website.
4 · Right time
Knowing when to launch your products, so that they’re available when your customer expects to see them and wants to buy them.
For example…
You sell knitted hats. Last year they started to sell in September but didn’t go crazy until it got cold in November. Competitors have them from August, so you need to have some online then, but only in small quantities. You’ll launch the full range of hats in November so they appear ‘new’ to the customer at the time they’re looking for them.
5 · Right quantity
Working out how many products to buy or make.
We use sales analysis and current trends to calculate how many products you need to potentialise your sales and minimise markdown.
For example…
You sell sandals. Last year you bought 100 pairs of blue sandals and 150 pairs of white sandals. You sold out of the 100 blue sandals in 4 weeks, but still had 20 pairs of white sandals left at the end of the season. This year you’ll buy 200 pairs of blue sandals and 130 pairs of white sandals, potentialising your sales and reducing your markdown spend.
6 · Right price
Setting the right price for your product.
We help you understand pricing principles and your place in the market so that you price your products correctly.
For example…
You sell jeans online. They’re similar to other retailers, so you decide to lower the price this season, hoping to sell a bigger volume. However, your sales drop, because your customer can’t see the quality of the jeans before they buy online. You increase the price slightly to give a better perception of value, and sales increase. So does your profit. Cheap isn’t always best!
