Guide: 6 Retail Merchandising Strategies to Increase ROI

Written by 
Dee Set Staff
3 January, 2023

Having a strong merchandising strategy is key to ensuring that your customers are engaged with your retail store and inspired to purchase your products. Providing a smooth and, more importantly, enjoyable shopping experience for your customers will help to increase ROI and promote business growth.

Merchandising plays an important role in your overall retail strategy, and promoting the right products in the right place and in a visually appealing way can make all the difference. 

To the untrained eye, a badly stocked or sparse shelf might be no big deal but, at Dee Set, we view an unorganised display as a cardinal sin and understand the thought, expertise and data that goes behind it. 

Stocking shelves has never been more exciting!

In this article, we’ll take a look at some common retail merchandising challenges for brick-and-mortar stores in an increasingly digital world. We’ll loop you in with 6 key retail merchandising strategies to improve your overall merchandising efforts, maximise your sales and make your brand stand out.

Read on to learn more…

In-store vs online retailers

With online shopping becoming ever-popular and your weekly food shop now just a click away, keeping your customers walking through those glistening sliding doors has become even more challenging. In this increasingly competitive landscape, customers quite literally have the world at their feet and the more choices they have the higher their expectations are.

This transition to a virtual space has seen a move away from shopping as a leisurely activity or event and led to a more isolated experience and subsequent lack of human contact. 

The good news? 

Physical stores can offer that unique experience that online retailers are missing.

Despite these challenges, physical outlets have many advantages. They are able to guide customers, promote new products seamlessly as part of the browsing process and encourage more shopping by visibly displaying a wider range of items. While looks aren't everything, shopping in a physical store is all about the visual experience and nothing beats a casual Sunday morning stroll along the biscuit aisle.

Turning new customers into satisfied customers and, fingers crossed, repeat customers requires an innovative retail merchandising strategy, ensuring you understand their shopping behaviours and are meeting their needs by offering relevant products in a tempting way.

The battle between in-store and online retailers continues...

6 retail merchandising strategies to drive sales

In a nutshell, your products are the beating heart of any retail store and the most important financial asset in your business. 

Effective merchandising is all about understanding your customer's purchasing behaviour and getting the most out of your retail space. The trick is to provide a seamless customer experience and display your products in a way that convinces customers to make a purchase. 

It's as simple as that!

1. Understanding why customers don’t buy

Knowing how to capture a customer's attention and get them to interact with a product in-store is all well and good, but it's also useful to understand why customers might change their minds - and it's not always because they forgot their purse! Having a customer-centric retail merchandising strategy is key. 

  • Lack of product availability and visibility
    Shoppers often enter stores with a sense of urgency - they know what they need and they won't waste any time dilly-dallying. In fact, a survey conducted by iVend Retail found that 67.3% of shoppers left the store empty-handed because they couldn't find the product they were after. If shelves are poorly stocked or the customer can't find the relevant product, this can have a detrimental impact on sales…
  • Where's the wow factor?

While you're not putting on a three-act performance, your product displays should strike the right balance between connecting with and drawing the customer in whilst not overwhelming them. A lacklustre environment is uninspiring and disengages customers - we want to stop shoppers in their tracks, not chase them away!

2. Consider the customer journey

One of the most important retail merchandising tactics is understanding and mapping out the in-store customer journey. From the moment they enter the store to the moment they leave, you want to create a simple, efficient and rewarding shopping experience.

With online stores offering a relaxed and easy shopping experience from the comfort of your own home, slippers and a cup of tea at the ready, why do customers still set foot in their local supermarkets and other retailers? 

The answer is product interaction. 

Being able to physically see, touch and examine a product adds value to that customer's experience and encourages them to make a purchase. With that being said, successful retail merchandising is as much about appealing to the five senses as it is about having eye-catching promotional signs and strategically placed purchase displays.

For example, if you're selling electronic products, such as phones or hairdryers, take the retail merchandise out of the packaging and allow your customers to experience it. 

The same goes for larger furniture items, such as chairs, or even home decor with tactile textures, like a rug or super soft throw. This is another advantage over the virtual world of digital stores - another point to the brick-and-mortar club!

An effective visual merchandising strategy will entice your customers to explore particular aisles through the use of aesthetically pleasing displays. It will keep the customer in the store longer, increasing the number of items they inevitably add to their basket and, ultimately, maximise sales. 

Knowing your target customers, their needs and purchasing behaviour will help to inform which products to promote and where to display them - improving conversion rates.  

3. Promotional activities 

Ranging from discounts by percentage through to set price discounts and multibuy savings, implementing clear in-store promotional activities is an important merchandising strategy and can lead to an uplift in conversion rates in retail settings.

It's a win-win - retailers can utilise purchase displays to advertise deals and sale items. Meanwhile, adding bold discount signs and product tags can help to make those displays, and your products, appear more attractive to the customer. 

Cross-merchandising also comes into play here, with the likelihood of customers purchasing non-sale items increasing significantly when placed next to sale items. As a persuasive retail merchandising tactic, displaying related products beside promotional activity can influence a purchasing decision.

For example, when the festive season is around the corner, deals on drinks are usually accompanied by a variety of snacks, dips and dinnerware - a party fit for a satisfied customer!  

4. Avoid out-of-stocks

There's nothing worse than an empty shelf or that dreaded 'out-of-stock' label. Failure to provide the right products at the right time and price will lead to customers feeling disappointed and, therefore, less likely to return, resulting in a decrease in sales. In other words, consistent product availability will keep shoppers in store for longer and exposed to more of your merchandise, leading to a positive experience, increased items per basket and improved retail sales. 

As a retailer, the aim of the game is to have the correct amount of stock and ranges available in order to motivate customers to make regular purchases, thus winning their loyalty.   

Similarly, stocking the wrong products on shelves will lead to a large amount of dead stock and a loss on ROI, so know your customers!

The simple solution is to align demand with stock availability - category management and forecasting will come in handy here. As well as keeping shelves healthy, using data-driven merchandising principles can help improve shelf layout and the visual appeal of stores. 

Planograms are a great visual merchandising tool, decluttering shelves and allowing you to better control the replenishment rate of your products. Fast-moving lines can be used to create 'hot spots' in stores, driving sales and improving stock turnover. 

5. It's all about the retail display

According to Dr. Russel Lazarus, around 80% of the information we process comes through our eyes. The windows to our soul and, in a retail setting, the windows to our wallet, appealing to the visuals through vibrant displays is fundamental to converting customers. At Dee Set, we have a wealth of knowledge when it comes to creating show-stopping displays that help to boost sales and increase ROI.

One of the most important retail merchandising rules is to create immersive and uncluttered retail displays that are accessible and can be easily viewed - e.g. at the front of the store. Effective displays will showcase products in a clean-line form and ensure the features and benefits of those items are highlighted. A top visual merchandising tip is to keep products at eye-level, creating a focal point that helps to push specific items, such as new arrivals, seasonal features or a beloved brand.

The trick is to capture the customer's attention before they've even picked up a basket and entered the store. Captivating window displays that are simple and bold in appearance are a great way to both convince the customer to invest in your products and showcase product features. 

Like the changing of the seasons, a store's setup should continuously evolve throughout the year. Using seasonal displays to build excitement around a particular holiday and promote special offers - alongside showcasing a variety of fresh, seasonal products - will enhance the overall customer experience. 

Deck the halls with Christmas decor and a classic colour scheme or play on the heartstrings with gorgeous flowers and Valentine's Day goodies - the options are endless!

Connecting with customers on an emotional level through the use of retail signage is also key in motivating them to connect with your products in-store and make a purchase. For example, signs that remind shoppers of significant life events, such as birthdays, holidays and anniversaries, assign products a sense of necessity while also adding sentimental value. 

The use of evocative imagery is another impactful merchandising strategy that enables customers to relate to the items on display. It's all about creating that tangible, real-life experience for shoppers - gifs and emotionless pop-ups can get annoying after a while, right?

6. Research retail merchandising trends

Unsurprisingly, emerging data and industry insights have pointed to an increase in customers craving a more sensory shopping experience, with 70% of shoppers highlighting the value of being able to interact with physical products

Further supporting this claim, Google has reported that more than 60% of people prefer to shop with brands in retail stores as opposed to online

As of 2022, more than 30% of businesses are focused on cross-selling initiatives, with research pointing to a more streamlined customer journey and an all-important increase in revenue. 

The retail space is constantly shifting and evolving to keep up with customer demands. Keeping an eye on these developing trends and improving your retail merchandising strategy in response to data-driven insights will allow you to stay competitive and position your business as a top player in the industry. 

Looking to revamp your merchandising strategy? Work with Dee Set today

With a proven track record of implementing successful retail merchandising strategies across multiple stores, the Dee Set team is on hand to provide professional expertise and devise a plan to maximise sales and increase ROI - those products will be flying off the shelves!

Using our professional expertise and years of experience, we'll help you to understand who your customer base is, their needs and expectations, and how you can implement strategic retail merchandising to keep your shoppers happy and their baskets full. 

If you’d like to learn more about Dee Set and the services that we can offer to your business as a full-service field marketing agency, you can check out some of our success stories here!

Alternatively, get started and release your potential today by giving us a call or filling out our online form!

Dee Set Logistics Ltd/Dee Set Confectionery Ltd, trading as Dee Set, registered in England, Scotland and Wales. Registered No: SC208421/04297287.Vat No: 896110414.