Merchandise and the Effect on Retailers and Retail Companies

Many merchandise retailers find it difficult to stand out from the crowd because many of their products are available in other stores. Retailers are forced to differentiate themselves, whether it is through innovative products or outstanding customer service. If a retailer cannot offer these services, they will be left with little to no competition. Given the narrow margins in food retailing, this is a risky game.

Although there are many ways that retailers can measure success, the most important metric is the ability to sell as much merchandise at the highest profit margins. These are the characteristics that all retailers must have:

Types of Retailers

Customer service is essential to all types of retail. It builds customer loyalty and enhances the customer’s shopping experience. Retailers must decide how much service they provide for their customers.


The newest entry to this level of retail is concept stores like Amazon Go, where there are no associates nor checkout lanes. 

Proprietary technology allows you to enter the store, pick your items up, and then leave the premises without having to go through checkout. As you leave the store, the system tracks the products you choose and charges them to your Amazon account. 

No service retailing is made possible by cameras and sensors placed throughout the shop that can monitor what products a customer takes from the shelves. This system also detects when a customer changes their mind and leaves the item behind. 

ArsTechnica discovered this isn’t always as reliable and accurate as the company would have you believe.            


This is what you see in most grocery stores and other big box stores. The product is on-hand for a customer’s selection and self-checkout allows them to scan the products, complete the transaction, and then bag the product.


  • Full-service retailers offer support at all points of the shopping process. This includes not only personal interaction but also includes services that make shopping easier.
  • Many customers still prefer full-service because these retailers:
  • Accept multiple payment methods, including cash, check, or credit card.
  • Offer delivery services.
  • Make recommendations and provide demonstrations such as cooking classes, recipes, or product samples.
  • Allow exchanges and returns.
  • Allow special orders.
  • Customer loyalty programs.

The Trade-Offs in Retail

Many services come at a cost to retailers, most often as labor costs. Retailers must weigh the need to offer multiple services and the willingness of customers to pay extra for these services. 

Full-service usually requires premium pricing. Full-service retail stores must ensure that their staff is trained to deliver exceptional customer service and make them stand out from the rest. Factors that set full-service apart include:

Counter Service – where the goods are not available to buyers and must be purchased from the seller. This is a common type of retail for smaller, more expensive items like jewelry and controlled items such as medicine and liquor. Counter service is usually provided by associates at the deli counter and meat department. They will make suggestions, portion the items and pack them for the customer.

Special orders can also be placed online, in person, or by telephone. This service is offered by many food retailers in bakery departments where cakes can be customized. Similar services may be offered by the floral and meat departments.

Home delivery and in-store pickup (ship to store) – Wal-Mart has begun to offer similar services, including in-store pickup or home delivery for online grocery orders. InstaCart is used by many other retailers.

Self-service – another option, where goods can be handled and examined before purchase. This is more common in food retailing, where samples or product demonstrations are offered. Warehouse club stores offer samples to help offset the high-ticket price and large quantities of their products.

Types of Merchandise

The greatest impact on a retailer’s bottom line is the one that has the most influence: assortment and variety of merchandise. So that their products can meet the needs of their customers, retailers must be strategic in their purchases.

Convenience products

We cannot live without certain products in our daily lives. Though no one wants to live without their smartphones or favorite shoes, these are products that are truly essential for daily living. These products are called convenience goods because they are easily available and can be purchased with minimal effort.

Customers shouldn’t have to make a decision as they are frequently purchased. Convenience goods are also a common area for demand transfer. Customers will choose another brand if the one they prefer is unavailable.

Convenience goods can be very affordable and offer customers a low opportunity cost. However, this also means that they are more sensitive to price. Retailers must balance price and demand to ensure that price increases don’t have an adverse effect on the sales of their goods.

To maximize profits, retailers must ensure that they sell high volumes of convenience goods quickly to make the most profit. Convenience goods can include newspapers, personal hygiene products, and cleaning products.

Impulse goods

“Two-thirds of the economy are impulse buying.”

Paco Underhill

Have you ever tried to stick to a shopping list and budget? You might have budgeted well, but then you stumbled upon extra items that you needed to add to your shopping basket. You’re not the only one who feels like this. 9 out 10 shoppers make these purchases.

This is a retail strategy that focuses on stocking impulse goods – goods that can be bought instantly with no thought.

Display and location are the most important aspects of impulse goods. They will not be noticed if they aren’t well placed or in unassuming areas of the store.

To entice customers to add these products to their orders, they are often displayed at check-out points and tills. These products can include magazines, sweets, or complementary products.

Shopping Products

You’ve probably spent hours researching a product and comparing different brands before making a purchase. Customers want to compare products and get detailed product information. These products are less popular because of the extensive research and multiple comparisons required.

Customers often compare various brands based on price, quality, and content. Before making a final decision, customers will compare a variety of brands based on price, quality, and content. This purchase can also have psychological and emotional implications such as acceptance, appreciation, or belonging.

Many people buy their iPhone for its utility, but also because it is associated with status symbols.  

Specialty Products    

Customers will spend more, do extensive research and travel far distances in order to purchase specialty goods from a specialty store. They are more selective because these products have a higher price.

Customers are not likely to transfer their demand. They will not compare products if they already know what they want. Alternative offerings are unacceptable. It is unnecessary for specialty products to be easily accessible. You can find luxury cars, expensive alcohol, and service professionals.

There are many variables that factor into retail merchandising, and that is why it is such a demanding yet rewarding line of work.            

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