Aim of a retailer is to maximize the goodwill and sales thereby increasing the profit of the retail outlet. Merchandising activities are activities done to achieve these goals. For a retail store, it includes all activities which promote the sales of the products including special offers, display and all techniques designed to influence consumers’ buying decisions. Merchandising is all about presenting products at the right time, at the right place, in the right quantity and at the right price to maximize sales.  

Issues that may occur related to merchandising in a retail outlet can be divided in to: 

• Quality-related issues 

• Service-related issues 

• Inventory related issues 

Quality of products is a priority for the clients. In the retail industry, the quality issues are related to defective products and products with identifiable issues. This can be avoided by sorting out defective products before placing them on the shelves. 

In the modern market, almost all retailers provide high-quality products. The only thing that will help to bring customers to you compared to your competitor is good service. So, even for a product-oriented retailer, service has already become an integral part which decides his/her competitive position. Issues in service will affect retail sales. Some of them can be related to behavior and knowledge of services personnel, providing physical facilities such as related to the easiness of billing, etc. Providing appropriate training for the in-store staff is a method to ensure the quality of service provided. This will improve the overall shopping experience of the customer and will lead to improved sales. 

Last but important source of issues is product related. Inventory handling and product-related issues in a store can lead to closing down of the store. One such issue is understocking. Under stocking of the products can lead to loss of sales for the retail outlet and gradually the store reputation will be affected. If all necessary products are available, the next issue that can occur is with the arrangement of the product on shelves. The product arrangement should be logical and non-confusing. Products in the retail outlet should be arranged according to the categories and placing should be decided according to customer psychology. Retail display arrangement should be designed and implemented according to the historical sales data, purchase pattern and industry trends. It is important to make sure the products placed on the shelf is the same as the predetermined display arrangement pattern. Lack of compliance of the shelf space with the predetermined retail display arrangement can cause a lot of problems and the predetermined arrangement will lose relevance. So, compliance should be ensured. 

A method to avoid the above issues is to create planogram for the shelf space. Planogram is the visual representation of the shelf space. It can be created with planogram design software. Planogram compliance is making sure the shelf space is in compliance with the planogram. Planogram compliance is a must, lack of compliance will also create problems such as understocking. Another benefit of using planogram in-store is shelf arrangement is creating attractive shelf space arrangement that will attract more customers and improve sales.