In the broadest sense, merchandising is any practice which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to the variety of products available for sale and how the products are displayed to stimulate interest and entice customers to make a purchase.
Retail store
Merchandising is any practice which contributes to the sale of products to a retail consumer.
Promotional merchandising
In Retail commerce, visual display merchandising refers to the process of maximizing merchandise sales using product design, selection, packaging, pricing, and display that stimulates consumers to spend more. This includes disciplines and discounting, physical presentation of products and displays, and decisions about which products should be presented to which customers at what time.This annual cycle of merchandising differs between countries and some times within them. The cycles may relate to cultural customs like holidays, and seasonal issues like climate and local sporting and recreation. In the United States for example, the basic retail cycle begins in early January - with merchandise for Valentine's Day - and ends around mid-February. Presidents' Day sales are held shortly thereafter.
Retail supply chain
In the supply chain, 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 made substantial savings by requiring it to be done by the manufacturer, vendor, or wholesaler that provides the products to the retail store. In the United Kingdom, for example, there are a number of organizations that supply merchandising services to support retail outlets with general stock replenishment and merchandising support for new stores. Through this approach, retail stores have been able to substantially reduce the number of employees needed to run the store.
Specific income statement of merchandising operations:
Sales
- Sales Return & Allowances
- Sales Distcount
= Net sales
- Cost of goods sold
= Gross margin
- Operating expenses
= Income before taxes
- tax
= Net income