Advantages and disadvantages of visual merchandising
In this guide:
- Visual merchandising for your retail business
- Advantages and disadvantages of visual merchandising
- Visual merchandising: retail branding and signage
- Visual merchandising: advantages of retail window displays
- Visual merchandising: retail store design and layout
- Visual merchandising: point-of-sale displays and price promotions
- How to improve and measure the impact of visual merchandising
Advantages and disadvantages of visual merchandising
There are advantages of using visual merchandising in your business but you should also be aware of some possible drawbacks.
Visual merchandising is the arrangement of products to maximise sales. Investing in visual merchandising can improve the buying experience for customers, be a strong marketing tool for your business and increase customer loyalty. However, good visual marketing will cost you time, effort and money so you need to be willing to make the initial investment.
Advantages of visual merchandising
The potential advantages of good visual merchandising include:
- Increased customers - Visual merchandising can increase the amount of customers who notice and enter your retail business. Merchandising should start outside where customers first see your premises (eg signage). If they like what they see and enjoy the experience you create inside, this should encourage them to return to your store. See understand your customers' needs.
- Increased sales - Effective visual merchandising can have a clear and positive effect on retail sales. Clear pricing, well-stocked shelves, simple displays and prominent sale signs can help drive profits while improving the shopping experience for your customers.
- Maximising the potential of your retail space - A creative approach to merchandising can help you to get more out of your space without the need for expansion or renovations. The layout should flow easily and direct customers to important items and displays you want to highlight. Your customers will begin to associate your clear and attractive merchandising with a positive shopping experience. This should encourage them to return.
- Getting the most value out of products - If you have products that are difficult to sell, clever visual merchandising could help you market them without having to reduce their price. Similarly, you can place low-priced items in less prominent spots to encourage the sale of high-margin items.
Disadvantages of visual merchandising
You may find that there are some barriers to introducing visual merchandising techniques within your retail store, including:
- Changing layout and space - You may have to spend time rearranging aisles, shelves, display fixtures and the general layout of the interior retail space.
- Increased demands on staff - The success of your visual merchandising techniques may mean you have to handle more daily customers, more sales and more deliveries. There may also be more customer service issues, longer hours and the need for more staff.
- Expense - If you install new fixtures, create new signage or improve the appearance of your retail space, costs can quickly add up. However, overcoming the challenges of planning and managing visual marketing can lead to profitability and increase customer loyalty.
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Visual merchandising: retail branding and signage
Your brand should be clear, concise and visible throughout your business.
Creating and promoting a strong brand is one of the most important elements of your retail business. It conveys messages to potential customers about your business' reputation and personality and can help you stand out amongst your competitors.
Your brand should be prominent throughout your business, including on street-fronted signage, the displays inside your retail premises, your website and social media channels. See branding for your business.
You can use signage throughout your business premises to communicate key messages to your customers. You should aim to keep messages clear and concise. An effective sign needs to have a simple goal.
Signs will communicate product information and direct customers around your retail premises. For example, in a convenience store, overhead signs may indicate the aisles where specific products are located (eg 'Fruit and Veg').
You should also include a call-to-action, where relevant - you need to guide your customer to complete a transaction (eg 'Pay Here').
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Visual merchandising: advantages of retail window displays
Effectively using window displays can have many benefits for your business.
A window display is often the first impression a customer will get of a retail store. Attractive shop fronts can play a key role in driving footfall in towns and cities.
Simple techniques can make a visually striking display of your products to gain people's interest. Good lighting is of key importance especially if your store and surrounding streets open late. You could promote key product lines or important customer offers to gain attention. Think about opportunities for seasonal or event-themed dressing eg Christmas, Easter or major sporting events.
You should also ensure that window imagery corresponds with your online presence. Think about using relevant hashtags, handles and social media channel URLs to encourage customers to engage with you online too. See social media best practice for business.
You could also check with your local council or chamber of commerce who may run competitions to reward the best-dressed shop window during the year.
Advantages of retail window displays
Using window displays effectively can have many benefits for your retail business:
- Instant information - Potential customers can get a good idea of what your store is about.
- Value for money - A good display can cost money, but it can pay back in increased sales. However, even a relatively inexpensive display can attract the eye of potential new customers if it is effective.
- Attracting customers - Eye-catching and appealing window displays can be the difference between potential customers coming into your store to view more or walking past.
- Building a positive image - An effective window display can provide a positive impression of your business and products.
- Increase in brand awareness - A unique and individual display can help your store stand out from the rest of the retail businesses in the area.
- Promotion of sales and special offers - A window display is an effective way to highlight promotional offers.
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Visual merchandising: retail store design and layout
The interior of your retail store can impact your customers’ decisions on what to buy.
Your retail store is a blank canvas - how you design the floor plan and use space can affect your customers' desire to buy your products.
Try to use mobile shelving and display units which you can move and easily dismantle, as these will help you to make regular changes and keep your store interesting.
Store entrance
Your shop entrance has the highest footfall in your premises so it's an impactful area to place products.
Placing promotional offers here can reassure and confirm a customer's decision for deciding to enter your store. However, you should also make sure you don't crowd the entrance by keeping the space uncluttered.
Place your essential items as far from the entrance as possible. For grocery stores, this could be bread or milk, and for office supply stores, it could be paper and ink cartridges. This is so that customers spend more time in the store, covering as much ground as possible, which hopefully equates to how much money they will spend.
Impactful displays
Make the space you have well-designed and impactful - think about the types of products you stock and your options for displaying them. Use striking colours, group similar products together, plan symmetrical displays or use repetition to make a statement.
Keeping high-profit items at eye level could also boost your profitability - customers will be more likely to bend or reach for cheaper items, but you should make it easier for them to purchase those products that will boost your margins.
Try to provide your customers with enough space to allow them to think and move freely around the store, even if you have very limited space. Also, decide what path you want them to take - use displays and racks to create a clear path to gain maximum exposure to your products, because the more products customers see, the more they tend to buy.
Create a focal point
Create a focal point in an area of your store that gets the most traffic and is the most visible. A well-planned area that stands out can increase sales. Make sure customers can easily view the products that you're highlighting and give them a clear call-to-action, for example, 'Buy now'.
It could also be worthwhile to make use of the space between the displayed merchandise and the ceiling. You could use it to provide information about your products or profile a designer or supplier.
Your checkout area and point of sale display should be located at a natural stopping point in the shopping experience. See visual merchandising: point-of-sale displays and price promotions.
Customer experience
Create an atmosphere in your store that mirrors your image. For example, if you want customers to feel they're getting a good promotional deal, stripped down facilities could contribute to their idea of a discount retailer. However, this sort of presentation wouldn't work in an exclusive jewellery store.
In addition, don't worry if your store is on the smaller side - sometimes a smaller space is preferable as it can provide a warmer, more welcoming feel than a larger space in which customers may feel uncomfortable and alone.
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Visual merchandising: point-of-sale displays and price promotions
Customers can be encouraged to make impulse purchases by using point-of-sale displays and price promotions.
Just because a customer is waiting at the check-out area doesn't need to mean they've finished shopping. Impulse purchases can be encouraged by adding a point-of-sale display.
A point-of-sale display is a specialised form of sales promotion that is found near, on, or next to a checkout counter.
This can work well for low-value items or goods that customers might even expect to find stocked at the point of sale. For example, convenience retailers find that chewing gum and chocolates are key impulse purchases and greeting card retailers find stocking pens and gift tags by the till popular.
Think about small or complementary items which customers can forget about or can be used to up-sell or add value to their main purchases.
Price promotions to attract customers
Retailers can attract customers to their premises by using various pricing tactics.
One method, called 'loss leader', involves selling a product deliberately below its profit margin. These items are often on display at the entrance to a retail store to attract customers inside to purchase goods that are more profitable.
Read more on different types of pricing tactics.
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How to improve and measure the impact of visual merchandising
Monitoring your visual merchandising can help you to decide whether to continue or change what you’re doing.
You should monitor the effectiveness of your visual merchandising to make sure you're getting value from the time and effort you're spending on it. This will also help you to improve future techniques.
Measuring the success of your visual marketing methods will allow you to:
- decide whether to continue or change what you're doing - for example, if something is difficult to sell, try moving the product or the same display to another location before completely giving up on it
- improve your decision-making on which techniques to apply and when - for example, if you have sold all of your inventory and you have no back stock, change your visual merchandising plan to something you have plenty of
How to measure the impact of your visual merchandising techniques?
Here are some ways to help you measure the success of your visual merchandising practices. You can evaluate:
- Return on investment - if you have made significant changes to your retail space, it is important to measure sales performance against previous weeks, months or seasons for comparative analysis and future planning purposes.
- Customer visits - capture figures on the number of people that come into your store and those that walk by your shop. This will help you to evaluate the opportunities and options to attract those who are less inclined to enter.
- Customer spend - evaluate a customer's average spending in one visit - is this more or less money than before you applied your visual marketing changes?
- Browsing time - consider how long customers spend in your store - is this a space where you are making a connection with customers and creating a welcoming experience.
- Returning customers - look at whether customers are coming back to your store and how often they return within a specific timeframe. This may also influence how you choose to target customers who visit less often.
Alongside evaluating customer spending and interaction in response to your visual merchandising techniques - consider the following to help drive ongoing improvement:
- Using retail analytics tools: There are resources that you can use to gain detailed data and insight into in-store customer journeys and track how they affect sales.
- Benchmarking your business: Setting benchmarks will allow you to compare your business with others. You can identify areas for improvement or adapt specific best practices to increase your own performance. See measure performance and set targets.
- Entering awards: Seek recognition for visual merchandising best practice. This will help raise the profile of your business in addition to increasing your exposure to what other businesses are doing well. See how to enter and win business awards.
It's worth remembering that measurements will probably only show the immediate impact of your visual merchandising activity. The biggest benefit can be the long-term improvement in your sales and return customers.
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