Merchandising
Encyclopedia
Merchandising is the methods, practices, and operations used to promote and sustain certain categories of commercial
activity. 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 the display of those products in such a way that it stimulates interest and entices customers to make a purchase.
using product design
, selection, packaging, pricing
, and display that stimulates consumers to spend more. This includes disciplines in pricing and discounting, physical presentation of products and displays, and the decisions about which products should be presented to which customers at what time.This 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. In the United States for example, the basic retail cycle begins in early January with merchandise for Valentine's Day
, which is not until mid-February. Presidents' Day
sales are held shortly thereafter. Following this, Easter
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). Mothers Day and Fathers Day are next, with graduation
gifts (typically small consumer electronics
like digital camera
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 ends 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, out by Memorial Day
in preparation for Independence Day (with Flag Day
in between). By July, back-to-school is on the shelves and autumn merchandise is already arriving, and at some arts and crafts
stores, Christmas decoration
s. (Often, a Christmas in July
celebration is held around this time.) The back-to-school market is promoted heavily in August, a time when there are no holidays to promote. By September, particularly after Labor Day
, the summer merchandise is on final closeout
and overstock of school supplies is marked-down some as well, and Halloween
(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 doesn't start until the day after
Thanksgiving
. Christmas clearance sales now begin even before Christmas at most retailers, though they usually begin on the day after Christmas
and continue on at least until New Year's Day
but sometimes as far out as February.
Merchandising also varies within retail chains, where stores in places like Buffalo
might carry snowblowers, while stores in Florida
and southern California
might instead carry beach clothing and barbecue grills all year. Coastal-area stores might carry water skiing
equipment, while ones near mountain range
s would likely have snow skiing and snowboarding
gear if there are ski areas nearby.
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 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 and PepsiCo
, their respective merchandiser work forces number in the thousands.
, 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
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. For the owners of the intellectual property
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 simply sit back and collect the merchandising fees.
s and games, usually those in current release and with television
shows oriented towards children.
Merchandising, especially in connection with child-oriented films and TV shows, often consists of toys made in the likeness of the show's characters (action figures) or items which they use. However, sometimes it can be the other way around, with the show written to include the toys, as advertising for the merchandise. The first major example of this was the TV show "G.I. JOE A Real American Hero.," produced by Hasbro in the early 1980s, but this practice has been common in children's broadcasting ever since.
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
).
The most common adult-oriented merchandising is that related to professional sports
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
and horror
genre
s. (Examples: Star Trek
, McFarlane Toys
) Occasionally shows which were intended more for children find a following among adults, and you can see a bit of a crossover, with products from that show oriented towards both adults and children. (Gundam
model kits)
Sometimes a brand
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 would be Harley-Davidson
branded clothing.)
market. Mainly focused on fan-made articles, prop replicas are becoming more and more famous as users tend to collect those pieces of movie memorabilia that med/big companies do not mass-produce, reaching even higher levels of quality than certain 'licensed' replicas.
Commerce
While business refers to the value-creating activities of an organization for profit, commerce means the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any...
activity. 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 the display of those products in such a way that it stimulates interest and entices customers to make a purchase.
Promotional merchandising
In retail commerce, visual display merchandising means maximizing merchandise salesSales
A sale is the act of selling a product or service in return for money or other compensation. It is an act of completion of a commercial activity....
using product design
Product design
-Introduction:Product design is the process of creating a new product to be sold by a business or enterprise to its customers. It is concerned with the efficient and effective generation and development of ideas through a process that leads to new products.Product designers conceptualize and...
, selection, packaging, pricing
Pricing
Pricing is the process of determining what a company will receive in exchange for its products. Pricing factors are manufacturing cost, market place, competition, market condition, and quality of product. Pricing is also a key variable in microeconomic price allocation theory. Pricing is a...
, and display that stimulates consumers to spend more. This includes disciplines in pricing and discounting, physical presentation of products and displays, and the decisions about which products should be presented to which customers at what time.This 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. In the United States for example, the basic retail cycle begins in early January with merchandise for Valentine's Day
Valentine's Day
Saint Valentine's Day, commonly shortened to Valentine's Day, is an annual commemoration held on February 14 celebrating love and affection between intimate companions. The day is named after one or more early Christian martyrs named Saint Valentine, and was established by Pope Gelasius I in 496...
, which is not until mid-February. Presidents' Day
Washington's Birthday
Washington's Birthday is a United States federal holiday celebrated on the third Monday of February in honor of George Washington, the first President of the United States. It is also commonly known as Presidents Day...
sales are held shortly thereafter. Following this, Easter
Easter
Easter is the central feast in the Christian liturgical year. According to the Canonical gospels, Jesus rose from the dead on the third day after his crucifixion. His resurrection is celebrated on Easter Day or Easter Sunday...
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). Mothers Day and Fathers Day are next, with graduation
Graduation
Graduation is the action of receiving or conferring an academic degree or the ceremony that is sometimes associated, where students become Graduates. Before the graduation, candidates are referred to as Graduands. The date of graduation is often called degree day. The graduation itself is also...
gifts (typically small consumer electronics
Consumer electronics
Consumer electronics are electronic equipment intended for everyday use, most often in entertainment, communications and office productivity. Radio broadcasting in the early 20th century brought the first major consumer product, the broadcast receiver...
like digital camera
Digital camera
A digital camera is a camera that takes video or still photographs, or both, digitally by recording images via an electronic image sensor. It is the main device used in the field of digital photography...
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 ends 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, out by Memorial Day
Memorial Day
Memorial Day is a United States federal holiday observed on the last Monday of May. Formerly known as Decoration Day, it originated after the American Civil War to commemorate the fallen Union soldiers of the Civil War...
in preparation for Independence Day (with Flag Day
Flag Day
A flag day is a flag-related holiday—either a day designated for flying a certain flag , or a day set aside to celebrate a historical event such as a nation's adoption of its flag....
in between). By July, back-to-school is on the shelves and autumn merchandise is already arriving, and at some arts and crafts
Arts and crafts
Arts and crafts comprise a whole host of activities and hobbies that are related to making things with one's hands and skill. These can be sub-divided into handicrafts or "traditional crafts" and "the rest"...
stores, Christmas decoration
Christmas decoration
A Christmas decoration is any of several types of decorations used at Christmastime. The traditional colours of Christmas are pine green , snow white, and heart red. Blue and white are often used to represent winter, or sometimes Hanukkah, which occurs around the same time. Gold and silver are...
s. (Often, a Christmas in July
Christmas in July
Christmas in July refers to Christmas-themed celebrations held in July.In the northern hemisphere some people throw parties during July that mimic Christmas celebrations, bringing the atmosphere of Christmas but with warmer temperatures. Parties may include Santa Claus, ice cream and other cold...
celebration is held around this time.) The back-to-school market is promoted heavily in August, a time when there are no holidays to promote. By September, particularly after Labor Day
Labor Day
Labor Day is a United States federal holiday observed on the first Monday in September that celebrates the economic and social contributions of workers.-History:...
, the summer merchandise is on final closeout
Closeout
A closeout or clearance is the final sale of an item or items to zero inventory. It may be a given model of item that is not selling well, or in the case of the final closure of a retailer because of a relocation, a fire , or especially because of a bankruptcy. In the latter case, it is usually...
and overstock of school supplies is marked-down some as well, and Halloween
Halloween
Hallowe'en , also known as Halloween or All Hallows' Eve, is a yearly holiday observed around the world on October 31, the night before All Saints' Day...
(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 doesn't start until the day after
Black Friday (shopping)
Black Friday is the day following Thanksgiving Day in the United States, traditionally the beginning of the Christmas shopping season. On this day, most major retailers open extremely early, often at 4 a.m., or earlier, and offer promotional sales to kick off the shopping season, similar to Boxing...
Thanksgiving
Thanksgiving (United States)
Thanksgiving, or Thanksgiving Day, is a holiday celebrated in the United States on the fourth Thursday in November. It has officially been an annual tradition since 1863, when, during the Civil War, President Abraham Lincoln proclaimed a national day of thanksgiving to be celebrated on Thursday,...
. Christmas clearance sales now begin even before Christmas at most retailers, though they usually begin on the day after Christmas
Boxing Day
Boxing Day is a bank or public holiday that occurs on 26 December, or the first or second weekday after Christmas Day, depending on national or regional laws. It is observed in Australia, Canada, New Zealand, the United Kingdom and some other Commonwealth nations. In Ireland, it is recognized as...
and continue on at least until New Year's Day
New Year's Day
New Year's Day is observed on January 1, the first day of the year on the modern Gregorian calendar as well as the Julian calendar used in ancient Rome...
but sometimes as far out as February.
Merchandising also varies within retail chains, where stores in places like Buffalo
Buffalo, New York
Buffalo is the second most populous city in the state of New York, after New York City. Located in Western New York on the eastern shores of Lake Erie and at the head of the Niagara River across from Fort Erie, Ontario, Buffalo is the seat of Erie County and the principal city of the...
might carry snowblowers, while stores in Florida
Florida
Florida is a state in the southeastern United States, located on the nation's Atlantic and Gulf coasts. It is bordered to the west by the Gulf of Mexico, to the north by Alabama and Georgia and to the east by the Atlantic Ocean. With a population of 18,801,310 as measured by the 2010 census, it...
and southern California
Southern California
Southern California is a megaregion, or megapolitan area, in the southern area of the U.S. state of California. Large urban areas include Greater Los Angeles and Greater San Diego. The urban area stretches along the coast from Ventura through the Southland and Inland Empire to San Diego...
might instead carry beach clothing and barbecue grills all year. Coastal-area stores might carry water skiing
Water skiing
thumb|right|A slalom skier making a turn on a slalom waterski.Waterskiing is a sport where an individual is pulled behind a boat or a cable ski installation on a body of water, skimming the surface.-History:...
equipment, while ones near mountain range
Mountain range
A mountain range is a single, large mass consisting of a succession of mountains or narrowly spaced mountain ridges, with or without peaks, closely related in position, direction, formation, and age; a component part of a mountain system or of a mountain chain...
s would likely have snow skiing and snowboarding
Snowboarding
Snowboarding is a sport that involves descending a slope that is covered with snow on a snowboard attached to a rider's feet using a special boot set onto mounted binding. The development of snowboarding was inspired by skateboarding, sledding, surfing and skiing. It was developed in the U.S.A...
gear if there are ski areas nearby.
Trading industry
In Eastern Europe, particularly in Russia, the term “merchandising” is commonly used within the trading industry and denotes all marketing and sales stimulation activities around PoS (point of sale): design, creation, promotion, care and training of the sales staff. Basically a merchandiser is someone who is continuously involved in business promotion by buying and selling of goods. In Asian countries such as India, this term is more synonymous with activities right from sampling or idea conception to dispatching of the shipment. It is a job description that involves leading and working with different departments within the organization, suppliers and buyers to deal with timely deadlines and accepted quality levels.Retail supply chain
Supply chain
A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to...
, 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 and PepsiCo
PepsiCo
PepsiCo Inc. is an American multinational corporation headquartered in Purchase, New York, United States, with interests in the manufacturing, marketing and distribution of grain-based snack foods, beverages, and other products. PepsiCo was formed in 1965 with the merger of the Pepsi-Cola Company...
, their respective merchandiser work forces number in the thousands.
Licensing
In marketingMarketing
Marketing is the process used to determine what products or services may be of interest to customers, and the strategy to use in sales, communications and business development. It generates the strategy that underlies sales techniques, business communication, and business developments...
, 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
Trademark
A trademark, trade mark, or trade-mark is a distinctive sign or indicator used by an individual, business organization, or other legal entity to identify that the products or services to consumers with which the trademark appears originate from a unique source, and to distinguish its products or...
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. For the owners of the intellectual property
Intellectual property
Intellectual property is a term referring to a number of distinct types of creations of the mind for which a set of exclusive rights are recognized—and the corresponding fields of law...
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 simply sit back and collect the merchandising fees.
Children
Merchandising for children is most prominently seen in connection with filmFilm
A film, also called a movie or motion picture, is a series of still or moving images. It is produced by recording photographic images with cameras, or by creating images using animation techniques or visual effects...
s and games, usually those in current release and with television
Television
Television is a telecommunication medium for transmitting and receiving moving images that can be monochrome or colored, with accompanying sound...
shows oriented towards children.
Merchandising, especially in connection with child-oriented films and TV shows, often consists of toys made in the likeness of the show's characters (action figures) or items which they use. However, sometimes it can be the other way around, with the show written to include the toys, as advertising for the merchandise. The first major example of this was the TV show "G.I. JOE A Real American Hero.," produced by Hasbro in the early 1980s, but this practice has been common in children's broadcasting ever since.
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
Mashimaro
Mashimaro is a Korean fictional character who resembles a fat rabbit, created by Kim Jae In . He is also known as Yupki Tokki . He debuted in a series of Flash animations on the internet...
).
Adults
Professional sports
Professional sports, as opposed to amateur sports, are sports in which athletes receive payment for their performance. Professional athleticism has come to the fore through a combination of developments. Mass media and increased leisure have brought larger audiences, so that sports organizations...
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
Science fiction is a genre of fiction dealing with imaginary but more or less plausible content such as future settings, futuristic science and technology, space travel, aliens, and paranormal abilities...
and horror
Horror fiction
Horror fiction also Horror fantasy is a philosophy of literature, which is intended to, or has the capacity to frighten its readers, inducing feelings of horror and terror. It creates an eerie atmosphere. Horror can be either supernatural or non-supernatural...
genre
Genre
Genre , Greek: genos, γένος) is the term for any category of literature or other forms of art or culture, e.g. music, and in general, any type of discourse, whether written or spoken, audial or visual, based on some set of stylistic criteria. Genres are formed by conventions that change over time...
s. (Examples: Star Trek
Star Trek
Star Trek is an American science fiction entertainment franchise created by Gene Roddenberry. The core of Star Trek is its six television series: The Original Series, The Animated Series, The Next Generation, Deep Space Nine, Voyager, and Enterprise...
, McFarlane Toys
Todd McFarlane
Todd McFarlane is a Canadian cartoonist, writer, toy designer and entrepreneur, best known for his work in comic books, such as the fantasy series Spawn....
) Occasionally shows which were intended more for children find a following among adults, and you can see a bit of a crossover, with products from that show oriented towards both adults and children. (Gundam
Gundam
The is a metaseries of anime created by Sunrise studios that features giant robots called "Mobile Suits" ; usually the protagonist's MS will carry the name Gundam....
model kits)
Sometimes a brand
Brand
The American Marketing Association defines a brand as a "Name, term, design, symbol, or any other feature that identifies one seller's good or service as distinct from those of other sellers."...
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 would be Harley-Davidson
Harley-Davidson
Harley-Davidson , often abbreviated H-D or Harley, is an American motorcycle manufacturer. Founded in Milwaukee, Wisconsin, during the first decade of the 20th century, it was one of two major American motorcycle manufacturers to survive the Great Depression...
branded clothing.)
Prop replicas
Yet another path official merchandising follows sometimes is the one so-called prop replicaProp replica
A prop replica is a collectible recreation of a movie or television prop that is intended to accurately re-create the item as it appeared in the original media...
market. Mainly focused on fan-made articles, prop replicas are becoming more and more famous as users tend to collect those pieces of movie memorabilia that med/big companies do not mass-produce, reaching even higher levels of quality than certain 'licensed' replicas.