Understanding visual merchandising

Understanding visual merchandising. Visual merchandising is a combination of elements of store environment design, merchandise presentation, and in-store communication. One example of visual merchandising is a price display or what is called a Point of Purchase (POP), especially prices that create a retail image and retail atmosphere in the minds of customers.

What is meant by point of purchase is a media in the form of a description card regarding the name of the item, price, size, and other information that is placed in such a way on the product display.

1. Purpose of visual merchandising

Usually POP is used on products that are being promoted. For example, promo or discount prices, POP prices for products that are discounted are placed in the right place and in a large enough font size so that they will attract the attention of consumers. There are several objectives of visual merchandising, including: 

• Attracting attention
• Highlighting one of the features of the product
• Winning competition in attracting consumer attention
• Dramatizing an impression
• Stimulating consumer interest to read the entire message
• Explaining a statement

Apart from point of purchase, there are many examples of visual merchandising, including installation of banners and banners, display of attractively decorated floor displays, paging systems which are carried out every few minutes, creating special areas for low prices and new products, and so on.

2. Wholesaling

Wholesaling is any activity of selling products in large quantities to final non-consumer buyers for the purpose of resale or for business use. Companies that carry out wholesale activities are called wholesalers (distributors, jobbers).

However, producers who carry out wholesaling activities cannot be called wholesalers. However, if branch warehouses are established in separate locations, they can be classified as wholesalers.

Read too Effect of price on consumer preferences

3. Reasons for the existence of wholesaling

Today, wholesalers are still important to producers for the following reasons: 

• Small producers with limited financial resources are unable to develop direct selling organizations.
• Producers who are quite capable also prefer to use their capital to expand production rather than carry out wholesale sales activities.
• Wholesalers’ operations are more efficient because of their scale of operations, the breadth of their relationship with their customers and their specialized expertise.
• Retailers who carry multiple product lines prefer to purchase an assortment of products through wholesalers rather than through the manufacturers directly.

4. The wholesaling function

Manufacturers generally use wholesalers if they are efficient in carrying out the following functions:

1. Selling and Promoting Wholesalers provide salespeople for manufacturers to reach and serve customers at low cost.
2. Buying and Assortment Building Wholesalers are able to select and determine the diversity of product items needed by customers.
3. Bulk Breaking Wholesalers buy products from manufacturers in bulk and then break it down into smaller units.
4. Warehousing Wholesalers store inventory thereby reducing inventory costs and supplier and customer risk.
5. Transportation Wholesalers can transport goods more quickly than producers because they are closer to the customer.
6. Financing Wholesalers help customers and suppliers financially by selling on credit, ordering goods in advance, and paying on time.
7. Risk Bearing Wholesalers bear risks such as theft, damage, expiration, and other losses related to the ownership of goods.
8. Market Information Wholesalers provide information to their suppliers and customers about competitor activity, new products, price developments, and so on.
9. Management Service and Counseling Wholesalers also often help retailers, for example, training their salespeople, setting up store layouts and storefronts, and setting up accounting and inventory control systems. In addition, wholesalers also help their industrial customers by providing training and technical services.

In contrast to retailers, wholesalers generally do not actively engage in product promotion or think about outlet locations and outlet accessories to entice buyers.

Wholesalers also usually have a wider area of ​​operations and larger goods transactions. Apart from that, in terms of regulations and taxes, the government also differentiates wholesalers and retailers.