The Merchandising Process

Wouldn't it be great if all a retailer had to do was place the products on a table and let the customers pick up what they wanted and pay for it? Maybe the first retailers got away with that, but competition among retailers has made simple retailing a thing of the past. That's because customers wouldn't long put up with sloppy retailing: “Bob's Widgets has a much better selection in all sizes, and the clerks are so helpful.” Bob's business grows and the sloppy retailer is soon looking for another trade. Obviously, there's more to the merchandising process than just placing products on a table. There's selection, presentation, and transaction.

Product Selection

Customers want choices. They don't want just shoes; they want a wide variety of shoes for men, women, and children in a variety of sizes. A single customer wants just one pair of shoes in his size. Your shoe store sells to more than just one customer, so you must stock a wide selection. And the selection must meet the current and anticipated needs of a diverse group of people that you've previously defined as “your customers.”

Product Presentation

Products that you have put away in a forgotten location won't sell, because the customer doesn't know about them. A product that is placed in a logical location within a well-designed store has a better chance of being purchased. And if the product's packaging illustrates its use or explains the value or application of the product, that product—if value priced—may soon be part of a sales transaction.

Sales Transaction

A sales transaction occurs when a seller and a buyer agree to trade ownership of a product (or service) for money. That's the goal of your retail store: sales transactions. Lots of profitable sales transactions. These transactions occur because the products that you have selected and presented sufficiently meet the needs of your customers that they are willing to purchase them for your price.

All of this may sound like a simplification of the retail process. It is. However, most retailers fail because they forget the basics of meeting customer needs at a profit. There's certainly much more to retailing than this, but all retail success is built upon the foundation of offering value to customers.

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  4. The Merchandising Process
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