Merchandising: A Comprehensive Guide

Merchandising is the backbone of any successful shopping experience. Whether you're curating displays in a physical store or personalising recommendations using online storefront software, it's all about delivering the right products to your customers in ways that grab their attention and inspire purchases.

Done right, merchandising has the power to boost sales, build brand loyalty, and create a memorable journey for your shoppers. Here are a few key strategies to optimise your merchandising, and how to overcome common challenges.

Merchandising is the process of presenting and promoting a brand's products and services to attract customers and encourage them to make a purchase. At its core, merchandising is about positioning products effectively — whether in-store or online — to meet the needs and expectations of your shoppers.

In retail marketing, merchandising might look like eye-catching displays or carefully organised shelves that help customers quickly find what they need. For ecommerce merchandising, it's about creating a seamless experience through the use of tools and strategies like personalised promotions and intuitive navigation on your ecommerce website.

The ultimate goal of merchandising is simple: to increase sales while enhancing the customer experience.

Merchandising isn't a one-size-fits-all approach; it's a mix of strategies designed to meet specific business goals and customer expectations. Whether you're enhancing your store layout or refining your ecommerce strategy, the following merchandising methods can help you optimise the way products are presented and sold:

• Visual merchandising: This is how products are displayed to capture attention and create a visually appealing shopping environment. For brick-and-mortar stores, this might include shelf arrangements, signage, or window displays. In ecommerce, it's about high-quality images, videos, and product pages that make browsing intuitive and enjoyable.
• Digital merchandising: In online storefronts, digital merchandising focuses on presenting products in ways that improve the customer journey. This includes personalised product recommendations and effective site search functionality to help customers find exactly what they need.
• Pricing strategies: Product prices directly impact customer behaviour. Promotions, discounts, and dynamic pricing strategies can create urgency and drive purchases. New advances in AI are making this aspect of merchandiser easier, faster, and more intelligent than ever. Now, merchandisers can work side-by-side with autonomous agents that can analyse vast amounts of data (like historical sales, customer preferences, and more) to determine which prices and promotions result in higher conversions.
• Product assortment and variety: Offering the right mix of products ensures your inventory reflects customer preferences. This approach includes understanding trends and demand patterns, and creating a selection that balances variety with focus.
• Cross-merchandising: Cross-merchandising involves strategically pairing related items to boost sales. For example, suggesting accessories alongside clothing items or bundling complementary products in your online store to make purchasing decisions easier.
• Omnichannel merchandising: This strategy integrates product presentation across multiple channels — such as your ecommerce website, physical store, and mobile app — to create a consistent experience for your customers. Omnichannel retail means that customers can shop seamlessly, no matter which sales channels they use to engage with your brand.

You don't have to rely on guesswork to build a great merchandising plan. You can use a combination of data, creativity, and customer insights to drive real results. Here are some of the key elements.

Offering the right product mix is critical to meeting customer expectations and maximising sales. For example, an electronics retailer might stock the latest trending gadgets alongside practical accessories (think: batteries, chargers, and carriers), while a sports equipment store might also offer athletic apparel. Assortment planning relies on understanding customer demand and anticipating trends to build a lineup that attracts buyers and drives sales.

Pricing is one of the most effective levers for influencing customer behaviour. Dynamic pricing (adjusting prices based on demand), promotional campaigns, or bundling discounts can encourage purchases while driving up average order value. Think about how subscription streaming services offer ‘family plans’ to appeal to broader audiences while increasing revenue per user — similar principles can apply to your pricing strategy, no matter what types of products you offer.

Striking the right inventory balance is an art and a science. Overstock can lead to excess costs, while understock risks customer dissatisfaction. To solve this, you can rely on tools to track demand, forecast trends, and optimise inventory turnover.

For instance, a meal-kit service could leverage inventory management systems to avoid waste while ensuring popular recipes remain available. The smarter your inventory management tools, the better.

AI can also help here, by keeping a watchful eye on inventory levels and analysing the supply chain flow automatically. AI agents can complete complex inventory tasks quickly, like facilitating communication with suppliers, automating reorder processes, and ensuring timely restocking. Agents can also monitor inventory levels in real-time, alerting teams when stock is low or when it's time to reorder.

Visual media is about telling a story and guiding the customer on a journey. In physical stores, this could mean creating themed displays that evoke emotions or celebrate cultural events, like a holiday-specific showcase for a home goods retailer. Online, it's about improving your ecommerce website with engaging videos, immersive product demos, and interactive 360-degree images that let shoppers experience products before buying. For example, think of how beauty brands allow customers to “try on” lipstick shades virtually using augmented reality technology.

The best merchandising strategies evolve with customer needs. Regularly reviewing performance metrics — like conversion rates, sell-through percentages, or abandoned cart rates — can reveal valuable opportunities for improvement. For example, a fashion brand may notice a product trending in one geographic region and decide to localise its marketing efforts or adjust inventory accordingly. With the right data at your fingertips, you can pivot quickly and fine-tune your merchandising plan for long-term success.

Merchandising is so much more than just making your products look good — it's the engine behind stronger sales, happier customers, and smoother operations. When done right, it can create experiences that stick with your shoppers and set your business apart from the competition.

The right merchandising strategies make it easier for customers to say “yes” to buying. Whether it's personalised product recommendations on your ecommerce platform or pairing items together in-store (like coffee mugs and premium beans), customers are more likely to find value when products are thoughtfully presented.

Merchandising has the power to turn a simple shopping trip into a memorable experience. Imagine walking into a store and seeing everything you need for taco night grouped together — or hopping onto an ecommerce site where you can filter products by your exact style or preferences. Thoughtful merchandising removes friction, makes shopping enjoyable, and leaves your customers feeling like the experience was made just for them.

Your merchandising is one of the first impressions customers have of your brand. Whether it's beautifully styled displays in a physical store or crisp, professional photos on your website, these details can make a big difference in how people perceive and feel about your brand. For example, a home décor retailer might create styled room displays that not only sell products but inspire ideas, positioning the brand as a go-to for creativity and quality.

Great merchandising doesn't just benefit your customers — it makes life easier for your business, too. When you use data to track demand and optimise inventory, you can avoid costly mistakes like overstocking items that don't sell or running out of your bestsellers. Automated tools can even adjust product displays based on real-time customer behaviour, helping you focus on what matters most while still delivering results.

Keeping the right products in stock at the right time is a balancing act, but smart merchandising helps you pull it off. By using inventory data and performance insights, you can avoid empty shelves or excess stock gathering dust. There may be a big product launch or you may simply be preparing for seasonal demand. Whatever the case, merchandising gives you the tools to keep customers happy.

While merchandising is key to driving sales and creating a great customer experience, it's not without its hurdles. Here are some of the most common challenges — and how to overcome them.

Customer preferences shift constantly — what's in demand today might be outdated tomorrow. For example, trends like sustainability and personalisation are reshaping how customers make buying decisions, from seeking eco-friendly packaging to wanting curated product recommendations. Staying ahead of these changes means constantly analysing customer behaviour and being ready to pivot your strategy to meet new demands.

Today's merchandising decisions rely on data, but collecting, analysing, and applying it effectively can be overwhelming. Think about the sheer volume of information from sources like sales reports, customer preferences, and digital interactions. Without the right tools or processes, it's easy to miss out on insights that could elevate your merchandising strategy.

Technology is essential for modern merchandising, but implementing it effectively can be challenging. Tools like AI-driven analytics, inventory management systems, and point-of-sale (POS) solutions are powerful, but they can also feel overwhelming if you don't have the technical expertise or resources to make the most of them. For example, integrating a point-of-sale system with your ecommerce store might seem daunting, but it's necessary for creating a seamless shopping experience.

Merchandising might come with its challenges, but the rewards are more than worth it. When your strategy accounts for your customers’ needs and uses the right tools, you can turn merchandising into a unique competitive advantage. And that means higher sales as well as a stronger brand.

From AI-powered insights to tools that unify your ecommerce marketing and in-store experiences, Commerce Cloud gives you everything you need to elevate your merchandising approach and outcomes. Get started now with Commerce Cloud.