Merchandising
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Merchandising is any practice which contributes to the sale of products ("merch" colloquially) to a retail
consumer A consumer is a person or a group who intends to order, or use purchased goods, products, or services primarily for personal, social, family, household and similar needs, who is not directly related to entrepreneurial or business activities. ...
. At a retail in-store level, merchandising refers to displaying products that are for sale in a creative way that entices customers to purchase more items or products. In
retail Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is the sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholes ...
commerce Commerce is the organized Complex system, system of activities, functions, procedures and institutions that directly or indirectly contribute to the smooth, unhindered large-scale exchange (distribution through Financial transaction, transactiona ...
, visual display merchandising means merchandise
sales Sales are activities related to selling or the number of goods sold in a given targeted time period. The delivery of a service for a cost is also considered a sale. A period during which goods are sold for a reduced price may also be referred ...
using
product design Product design is the process of creating new Product (business), products for businesses to sell to their customers. It involves the generation and development of ideas through a systematic process that leads to the creation of innovative products ...
, selection,
packaging Packaging is the science, art and technology of enclosing or protecting products for distribution, storage, sale, and use. Packaging also refers to the process of designing, evaluating, and producing packages. Packaging can be described as a coo ...
,
pricing Pricing is the Business process, process whereby a business sets and displays the price at which it will sell its products and services and may be part of the business's marketing plan. In setting prices, the business will take into account the ...
, and display that stimulates consumers to spend more. This includes disciplines and
discounting In finance, discounting is a mechanism in which a debtor obtains the right to delay payments to a creditor, for a defined period of time, in exchange for a charge or fee.See "Time Value", "Discount", "Discount Yield", "Compound Interest", "Effici ...
, physical presentation of products and displays, and the decisions about which products should be presented to which customers at what time. Often in a retail setting, creatively tying in related products or accessories is a great way to entice consumers to purchase more. Merchandising helps to understand the ordinary dating notation for the terms of payment of an invoice. Codified discounting solves pricing problems including markups and markdowns. It helps to find the net price of an item after single or multiple trade discounts and can calculate a single discount rate that is equivalent to a series of multiple discounts. Further, it helps to calculate the amount of cash discount for which a payment qualifies.


Promotional merchandising

The annual cycle of merchandising differs between countries and even within them, particularly relating to cultural customs like holidays, and seasonal issues like climate and local sporting and recreation. Events such as Chinese festivals and Japanese festivals are incorporated in an annual cycle of shop decorations and merchandise promotion. As just one example, in the United States the basic retail cycle begins in early January with merchandise for
Valentine's Day Valentine's Day, also called Saint Valentine's Day or the Feast of Saint Valentine, is celebrated annually on February 14. It originated as a Christian feast day honoring a Christian martyrs, martyr named Saint Valentine, Valentine, and ...
, which is not until mid-February. Presidents' Day sales are held shortly thereafter. Following this,
Easter Easter, also called Pascha ( Aramaic: פַּסְחָא , ''paskha''; Greek: πάσχα, ''páskha'') or Resurrection Sunday, is a Christian festival and cultural holiday commemorating the resurrection of Jesus from the dead, described in t ...
is the major holiday, while springtime clothing and garden-related merchandise is already arriving at stores, often as early as mid-winter (toward the beginning of this section, St. Patrick's Day merchandise, including green items and products pertaining to Irish culture, is also promoted).
Mother's Day Mother's Day is a celebration honoring the mother of the family or individual, as well as motherhood, maternal bonds, and the influence of mothers in society. It is celebrated on different days in many parts of the world, most commonly in Mar ...
and
Father's Day Father's Day is a day set aside for honoring one's father, as well as fatherhood, paternal bonds, and the influence of fathers in society. "Father's Day" complements similar celebrations honoring family members, such as Mother's Day and, in som ...
are next, with
graduation A graduation is the awarding of a diploma by an educational institution. It may also refer to the ceremony that is associated with it, which can also be called Commencement speech, commencement, Congregation (university), congregation, Convocat ...
gifts (typically small
consumer electronics Consumer electronics, also known as home electronics, are electronic devices intended for everyday household use. Consumer electronics include those used for entertainment, Communication, communications, and recreation. Historically, these prod ...
like
digital camera A digital camera, also called a digicam, is a camera that captures photographs in Digital data storage, digital memory. Most cameras produced today are digital, largely replacing those that capture images on photographic film or film stock. Dig ...
s) often being marketed as "dads and grads" in June (though most college semesters end in May; the grads portion usually refers to high school graduation, which occurs one to two weeks after Father's Day in many U.S. states). Summer merchandise is next, including patriotic-themed products with the American flag, placed on the market by
Memorial Day Memorial Day (originally known as Decoration Day) is a federal holiday in the United States for mourning the U.S. military personnel who died while serving in the United States Armed Forces. It is observed on the last Monday of May. It i ...
in preparation for
Independence Day An independence day is an annual event memorialization, commemorating the anniversary of a nation's independence or Sovereign state, statehood, usually after ceasing to be a group or part of another nation or state, or after the end of a milit ...
(with
Flag Day A flag day is a flag-related holiday, a day designated for flying a certain flag (such as a national flag) or a day set aside to celebrate a historical event such as a nation's adoption of its flag. Flag days are usually codified in national s ...
in between). By July, back-to-school is on the shelves and autumn merchandise is already arriving, and at some
arts and crafts The Arts and Crafts movement was an international trend in the Decorative arts, decorative and fine arts that developed earliest and most fully in the British Isles and subsequently spread across the British Empire and to the rest of Europe and ...
stores, Christmas decorations. (Often, a Christmas in July celebration is held around this time.) The back-to-school market is promoted heavily in August, when there are no holidays to promote. By September, particularly after
Labor Day Labor Day is a Federal holidays in the United States, federal holiday in the United States celebrated on the first Monday of September to honor and recognize the Labor history of the United States, American labor movement and the works and con ...
, summer merchandise is on final closeout and overstock of school supplies is marked-down some as well, and
Halloween Halloween, or Hallowe'en (less commonly known as Allhalloween, All Hallows' Eve, or All Saints' Eve), is a celebration geography of Halloween, observed in many countries on 31 October, the eve of the Western Christianity, Western Christian f ...
(and often even more of the Christmas) merchandise is appearing. As the Halloween decorations and costumes dwindle in October, Christmas is already being pushed on consumers, and by the day after Halloween retailers are going full-force with advertising, even though the "official" season does not start until the day after
Thanksgiving Thanksgiving is a national holiday celebrated on various dates in October and November in the United States, Canada, Saint Lucia, Liberia, and unofficially in countries like Brazil and Germany. It is also observed in the Australian territory ...
. Christmas clearance sales begin even before Christmas at many retailers, though others begin on the day after Christmas and continue on at least until
New Year's Day In the Gregorian calendar, New Year's Day is the first day of the calendar year, January 1, 1 January. Most solar calendars, such as the Gregorian and Julian calendars, begin the year regularly at or near the December solstice, northern winter ...
but sometimes as far out as February. The trend of stocking stores with merchandise many weeks prior to the actual event targeted and the period of consumption can be described by the term advance selling. Although it may seem disadvantageous for sellers, advance selling can have the opposite effect. For example, this practice works to counteract a lack of abundant capacity in stores during prime seasons and a lack of value in premature products. Merchandising also varies within
retail chain A chain store or retail chain is a retail outlet in which several locations share a brand, Management, central management and standardized business practices. They have come to dominate many retail markets, dining markets, and service categories ...
s, where stores in places like Buffalo might carry snow blowers, while stores in
Florida Florida ( ; ) is a U.S. state, state in the Southeastern United States, Southeastern region of the United States. It borders the Gulf of Mexico to the west, Alabama to the northwest, Georgia (U.S. state), Georgia to the north, the Atlantic ...
and
southern California Southern California (commonly shortened to SoCal) is a geographic and Cultural area, cultural List of regions of California, region that generally comprises the southern portion of the U.S. state of California. Its densely populated coastal reg ...
might instead carry beach clothing and barbecue grills all year. Coastal-area stores might carry
water skiing Water skiing (also waterskiing or water-skiing) is a surface water sport in which an individual is pulled behind a boat or a cable ski installation over a body of water, skimming the surface on one or two skis. The sport requires sufficien ...
equipment, while ones near
mountain range A mountain range or hill range is a series of mountains or hills arranged in a line and connected by high ground. A mountain system or mountain belt is a group of mountain ranges with similarity in form, structure, and alignment that have aris ...
s would likely have snow skiing and
snowboarding Snowboarding is a recreational and competitive activity that involves descending a snow-covered surface while standing on a snowboard that is almost always attached to a rider's feet. It features in the Winter Olympic Games and Winter Paralym ...
gear if there are ski areas nearby.


Silent persuasion

As promotional merchandise acquires a larger portion of companies' annual budgets, its appearance in the hands of unintended recipients increases. However, this has been found to generate a positive outcome for companies without any additional effort after producing the merchandise because of the concept of silent
persuasion Persuasion or persuasion arts is an umbrella term for influence. Persuasion can influence a person's beliefs, attitudes, intentions, motivations, or behaviours. Persuasion is studied in many disciplines. Rhetoric studies modes of persuasi ...
. The concept theorizes that even without the acknowledgement of the brand being promoted on the merchandise, the individual utilizing it is affected in their future actions as a consumer. Furthermore, a 2019 study found that the tactile usage of the products produced a greater response in consumers than a solely visual interaction with a product such as posters. This study concluded that considering allotting a greater sum of money to smaller pieces of merchandising that promote a brand would benefit newer companies that have yet to become quickly recognizable.


Retail supply chain

In the
supply chain A supply chain is a complex logistics system that consists of facilities that convert raw materials into finished products and distribute them to end consumers or end customers, while supply chain management deals with the flow of goods in distri ...
, merchandising is the practice of making products in retail outlets available to consumers, primarily by stocking shelves and displays. While this used to be done exclusively by the stores' employees, many retailers have found substantial savings in requiring it to be done by the manufacturer, vendor, or wholesaler that provides the products to the retail store. In the United Kingdom, there are a number of organizations that supply merchandising services to support retail outlets with general stock replenishment and merchandising support in new stores. By doing this, retail stores have been able to substantially reduce the number of employees needed to run the store. While stocking shelves and building displays is often done when the product is delivered, it is increasingly a separate activity from delivering the product. In grocery stores, for example, almost all products delivered directly to the store from a manufacturer or wholesaler will be stocked by the manufacturer's/wholesaler's employee who is a full-time merchandiser. Product categories where this is common are Beverage (all types, alcoholic and non-alcoholic), packaged baked goods (bread and pastries), magazines and books, and health and beauty products. For major food manufacturers in the beverage and baked goods industries, their merchandisers are often the single largest employee group within the company. For nationwide branded goods manufacturers such as
The Coca-Cola Company The Coca-Cola Company is an American multinational corporation founded in 1892. It manufactures, sells and markets soft drinks including Coca-Cola, other non-alcoholic beverage concentrates and syrups, and alcoholic beverages. Its stock is lis ...
and
PepsiCo PepsiCo, Inc. is an American multinational corporation, multinational food, snack, and beverage corporation headquartered in Harrison, New York, in the hamlet of Purchase, New York, Purchase. PepsiCo's business encompasses all aspects of the f ...
, their respective merchandiser work forces number in the thousands.


Channel merchandising

This concept can be linked to
marketing channel A marketing channel consists of the people, organizations, and activities necessary to transfer the ownership of goods from the point of production to the point of consumption. It is the way products get to the end-user, the consumer; and is also ...
s which bring products from the possession of the producer into the possession of the consumer. In recent decades, these methods utilized by companies to provide merchandise have expanded from in-person only, to online-only for some stores during the
COVID-19 pandemic The COVID-19 pandemic (also known as the coronavirus pandemic and COVID pandemic), caused by severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2), began with an disease outbreak, outbreak of COVID-19 in Wuhan, China, in December ...
, to a mixture of both, sometimes referred to as omnichannel retailing. The combination of both options for consumers provides a favorable encounter with retailers that makes them more likely to purchase products and return to the seller again at a future date. However, these strategies can be difficult for sellers to maintain as it can require many more physical and technical resources that may not be currently available to them.


Online merchandising

A challenge that online retailers face in comparison to the traditional in-store shopping experience is the sensory exploration that isn't available to consumers through a screen. An area this is especially prevalent in is clothing or fashion
retail Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is the sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholes ...
in which potential sizing issues can be a large factor in a customer refraining from purchasing an item online. Moreover, accurately portraying the texture and quality of a product in all areas of retail, not limited to fashion, remains a challenge in the field of online merchandising as the lack thereof has been proven to result in more indecision for consumers. Because of this, many companies look for ways to improve their online shopping options to make browsing merchandise as similar to an in-store experience as possible while keeping up with the growing online market.


Licensing

In
marketing Marketing is the act of acquiring, satisfying and retaining customers. It is one of the primary components of Business administration, business management and commerce. Marketing is usually conducted by the seller, typically a retailer or ma ...
, one of the definitions of merchandising is the practice in which the brand or image from one product or service is used to sell another.
Trademark A trademark (also written trade mark or trade-mark) is a form of intellectual property that consists of a word, phrase, symbol, design, or a combination that identifies a Good (economics and accounting), product or Service (economics), service f ...
ed brand names, logos, or character images are licensed to manufacturers of products such as toys or clothing, which then make items in or emblazoned with the image of the license, hoping they'll sell better than the same item with no such image.ABC News: Coffins bearing baseball team logos.
(accessed 2007-01-06)
For the owners of the IP (
intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, co ...
) in question, merchandising is a very popular source of revenue, due to the low cost of letting a third party manufacture the merchandise, while the IP owners collect the merchandising (royalty) fees. In 1903, a year after publishing '' The Tale of Peter Rabbit'', English author
Beatrix Potter Helen Beatrix Heelis (; 28 July 186622 December 1943), usually known as Beatrix Potter ( ), was an English writer, illustrator, natural scientist, and conservationist. She is best known for her children's books featuring animals, such as '' ...
created the first
Peter Rabbit Peter Rabbit is a fictional animal character in various children's stories by English author Beatrix Potter. A mischievous, adventurous young rabbit who wears a blue jacket, he first appeared in ''The Tale of Peter Rabbit'' in 1902, and subseq ...
soft toy and registered him at the
Patent Office A patent office is a governmental or intergovernmental organization which controls the issue of patents. In other words, "patent offices are government bodies that may grant a patent or reject the patent application based on whether the applicati ...
in London, making Peter the oldest licensed fictional character. Erica Wagner of ''
The Times ''The Times'' is a British Newspaper#Daily, daily Newspaper#National, national newspaper based in London. It began in 1785 under the title ''The Daily Universal Register'', adopting its modern name on 1 January 1788. ''The Times'' and its si ...
'' states, "Beatrix Potter was the first to recognise that content—as we now call the stuff that makes up a book or a film—was only the beginning. In 1903, Peter hopped outside his pages to become a patented soft toy, which gave him the distinction of being not only Mr. McGregor‘s mortal enemy, but also becoming the first licensed character".


Children

Merchandising for children is most prominently seen in connection with
film A film, also known as a movie or motion picture, is a work of visual art that simulates experiences and otherwise communicates ideas, stories, perceptions, emotions, or atmosphere through the use of moving images that are generally, sinc ...
s and
videogames A video game or computer game is an electronic game that involves interaction with a user interface or input device (such as a joystick, controller, keyboard, or motion sensing device) to generate visual feedback from a display device, mo ...
, usually those in current release and with
television Television (TV) is a telecommunication medium for transmitting moving images and sound. Additionally, the term can refer to a physical television set rather than the medium of transmission. Television is a mass medium for advertising, ...
shows oriented towards children. Merchandising, especially in connection with child-oriented films, TV shows and literature, often consists of toys made in the likeness of the show or book's characters (action figures) or items which they use. This was first seen with the Peter Rabbit soft toy in 1903, with the '' Smithsonian'' magazine stating Beatrix Potter "created a system that continues to benefit all licensed characters, from
Mickey Mouse Mickey Mouse is an American cartoon character co-created in 1928 by Walt Disney and Ub Iwerks. The longtime icon and mascot of the Walt Disney Company, Mickey is an anthropomorphic mouse who typically wears red shorts, large shoes, and white ...
to
Harry Potter ''Harry Potter'' is a series of seven Fantasy literature, fantasy novels written by British author J. K. Rowling. The novels chronicle the lives of a young Magician (fantasy), wizard, Harry Potter (character), Harry Potter, and his friends ...
." However, sometimes it can be the other way around, with the show written to include the toys, as advertising for the merchandise. Sometimes merchandising from a television show can grow far beyond the original show, even lasting decades after the show has largely disappeared from popularity. In other cases, large amounts of merchandise can be generated from a pitifully small amount of source material ( Mashimaro).


Adult

The most common adult-oriented merchandising is that related to
professional sports In professional sports, as opposed to amateur sports, participants receive payment for their performance. Professionalism in sport has come to the fore through a combination of developments. Mass media and increased leisure have brought larger a ...
teams (and their players). A smaller niche in merchandising is the marketing of more adult-oriented products in connection with similarly adult-oriented films and TV shows. This is common especially with the
science fiction Science fiction (often shortened to sci-fi or abbreviated SF) is a genre of speculative fiction that deals with imaginative and futuristic concepts. These concepts may include information technology and robotics, biological manipulations, space ...
and horror
genre Genre () is any style or form of communication in any mode (written, spoken, digital, artistic, etc.) with socially agreed-upon conventions developed over time. In popular usage, it normally describes a category of literature, music, or other fo ...
s. Occasionally, shows which were intended more for children find a following among adults (for example, ''
Gundam is a Japanese military science fiction media franchise. Created by Yoshiyuki Tomino and Sunrise (now Bandai Namco Filmworks), the franchise features giant robots, or mecha, with the name "Gundam". The franchise began on April 7, 1979, with ...
'' model kits). An early example of this phenomenon was the cartoon character Little Lulu, who became licensed to products for adults, such as Kleenex facial tissue. Sometimes a
brand A brand is a name, term, design, symbol or any other feature that distinguishes one seller's goods or service from those of other sellers. Brands are used in business, marketing, and advertising for recognition and, importantly, to create and ...
of non-media products can achieve enough recognition and respect that simply putting its name or images on a completely unrelated item can sell that item. An example is
Harley-Davidson Harley-Davidson, Inc. (H-D, or simply Harley) is an American motorcycle manufacturer headquartered in Milwaukee, Wisconsin. Founded in 1903, it is one of two major American motorcycle manufacturers to survive the Great Depression along with i ...
branded clothing.


Idol goods

Idol goods or idol merchandise are various types of merchandise related to
celebrities Celebrity is a condition of fame and broad public recognition of a person or group due to the attention given to them by mass media. The word is also used to refer to famous individuals. A person may attain celebrity status by having great w ...
("idols"). Consumption of idol goods is a significant part of the idol fandom. Such goods create and reinforce a more physical connection between fans and celebrities. Examples of common idol goods include
stationery Stationery refers to writing materials, including cut paper, envelopes, continuous form paper, and other office supplies. Stationery usually specifies materials to be written on by hand (e.g., letter paper) or by equipment such as computer p ...
items, compact discs, photo albums, calendars, telephone cards, T-shirts (see also concert T-shirt), key chains, lapel pins, and various other goods. Virtual idols can be considered an idol good themselves as they can be bought and sold. An idol can have a tremendous effect on sales of merchandise, an example being
David Beckham Sir David Robert Joseph Beckham ( ; born 2 May 1975) is an English former professional footballer, the president and co-owner of Inter Miami CF and co-owner of Salford City. Primarily a right winger and known for his range of passing, cross ...
upon his arrival at Real Madrid in 2003, with an Adidas spokesman stating, "Put Beckham's name on any product and Real Madrid didn't stop selling". In the 1960s
the Beatles The Beatles were an English Rock music, rock band formed in Liverpool in 1960. The core lineup of the band comprised John Lennon, Paul McCartney, George Harrison and Ringo Starr. They are widely regarded as the Cultural impact of the Beatle ...
were pioneers in conventional retailing in music, setting up their own retail store in London, Apple Boutique, that sold Beatles merchandise.


See also

* * * * * * * *


References


Further reading

*


External links


Procter&Gamble merchandising standards
{{Authority control Marketing techniques Promotion and marketing communications Retail processes and techniques no:Spin-off#Salgsvarer