The Impact of Brand Merchandising on Consumer Behavior

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Consumer behavior, especially consumer buying behavior, is a complex and touchy subject. It's one of the only areas in marketing where a statement can be both true and false simultaneously. But, even in an ever-changing economic landscape, you can rely on the impact of brand merchandising to pave the path toward success.

Understanding Brand Merchandising

Brand merchandising (or branded merchandising) is the process of promoting a brand through its products within a retail environment or similar setting. Examples of brand merchandising in action include the following:

• Strategic product placement
• The curation of attractive displays
• The use of promotional signage
• Competitive pricing strategies
• Many others

At its simplest, brand merchandising can be described as "bringing goods to market marked with the company's logo." In fact, in some legal contexts, that's almost a direct quote.

The Influence of Brand Merchandising on Consumers' Purchasing Decisions

From the moment a consumer steps into a store or loads a website, brand merchandising is critical in influencing their purchasing decisions. They're immediately targeted with data- and science-driven marketing strategies and gently corralled toward the section of the store where they're most likely to make a purchase.

Whether the consumer is looking at pretty window displays or clicking "shop now" in a Facebook ad, there are concepts at work at the subconscious level guiding them toward their future purchase.

Psychology and Consumers' Perceptions

Researchers like Daniel Kahneman, Amos Tversky, and Richard Thaler have identified a long list of "heuristics." Heuristics are concepts that govern the way people think. All of us, even you and I, are susceptible to their effects. Here are a few examples:

• The availability heuristic: The belief that something is more common than it is because you hear about it frequently.
• Anchoring effect: The tendency to give more "weight" to the first piece of information they hear.
• Decoy effect: The tendency to change your mind between two options when presented with a third, less favorable alternative.

Consumers' Perceptions and Your Brand

In a research paper entitled "Effects of Price, Brand, and Store Information on Buyers' Product Evaluations," William B. Dodds and his research associates found that positive perceptions of a brand have a direct, positive effect on perceived value. In other words, a strong brand presentation directly incentivizes consumers to like your brand. And, when they like your brand, they're more likely to buy your brand's merchandise.

The conclusions found in that research paper tell us that the store environment—which includes store atmosphere, store design, store image, and store layout—plays a critical role in the customer experience. To capitalize on this, take a note from Lush.

Lush is a prominent retail outlet that uses scents to offer customers a pleasant and fulfilling store environment. This practice, known as sensory marketing, is just one of the many psychologically supported ways to incentivize sales in a retail environment.

Your Brand and Impulse Purchases

This connection is not quite as clear as the other two we discussed. Whereas consumers' perceptions and your brand share a cut-and-dry relationship that's been studied and quantified, the relationship between your brand and impulse buying behavior is less clear-cut. What we do know is that the majority (73 percent) of consumer purchases are driven by consumer impulse.

There are countless ways that businesses can leverage psychology to drive impulse buying behavior. For example, placing low-cost items near the checkout queue can capitalize on consumer impulse. With an attractive product display, appealing visuals, and promotional signage, these "impulse buy shelves" can add value to your store operations.

The Impact of Visual Merchandising

Consumer impulse is a powerful thing, but why? To answer that question, let's look at a study published by Neha P. Mehta and Pawan K. Chugan called "The Impact of Visual Merchandising on Impulse Buying Behavior of Consumer: A Case from Central Mall of Ahmedabad India."

The purpose of this research was to look for any significant impact of visual merchandising within the Indian retail industry. Mehta and Chugan employed a systematic methodology to examine what they believed to be the "four dimensions" of visual merchandising elements: window displays, in-store mannequin displays, floor merchandising, and promotional signage.

Their findings, which implied that visual merchandising elements play a significant role in building brand loyalty and attracting potential customers, have informed how many businesses think about the importance of visual merchandising today. For a more comprehensive discussion of the science behind visual merchandising, contact the team at Getzler Henrich.

The Role of Visual Merchandising

In the ten years since Mehta and Chugan published their study (as of 2023), visual merchandising has come to serve several important purposes, one of which is to shape a brand's image. Businesses do this by using the techniques I mentioned earlier (like sensory marketing) alongside the strategic use of color, lighting, signage, and product placement to appeal to potential customers and capture their attention.

The retail sector's consumer packaged goods (CPG) wing is rife with examples of effective visual merchandising. CPG involves any consumer goods packaged for sale in a large-distribution retail setting — chocolate bars, hygiene products, and just about everything else you can see on the shelf fall into this category.

Retail businesses often employ graphic designers to create the most eye-catching and attention-grabbing visual elements possible. Then they hire copywriters to fill in those designs with keywords like "fat-free," "0% sugar," and "airy." When done well, this combination of visual (design) and linguistic elements has been shown to be a powerful driver of consumer behavior.

Practical Applications of Visual Merchandising Elements

All of the following are examples of practical applications of visual merchandising:

• Window displays
• Mannequin displays
• Product displays
• Promotional signage
• Floor merchandising
• General merchandise displays
• Other kinds of in-store displays
• (Online) Visual displays and UI/UX elements

The best displays serve as a medium for communicating with customers, telling a story, or creating a mood that resonates with them. Instead of stacking pans next to a sign that says "Clearance," try assembling an assortment of different cookware, cutlery, and flowers next to a sign that says, "A date she'll always remember."

There are plenty of ways to make these concepts work. What matters most is that you employ eye-catching visual stimuli to evoke an emotional response in your potential customers. Even something as simple as a vibrantly colored window display can attract more customers.

4 Factors in Effective Brand Merchandising

A strong brand merchandising campaign will need high-quality merchandise that's relevant to the target audience, that consumers perceive to be value-adding, and that evokes an emotional connection in the viewer.

1. Merchandise Quality

Merchandise quality is the most important factor in effective brand merchandising. Consumers are unlikely to repurchase a product they believe to be defective, wrought from shoddy workmanship, or useless. Commit to high-quality goods and stick to that philosophy. 

That doesn't mean everything needs to be as luxurious as possible. Find out which economic segment your target audience falls into and segment your products accordingly.

For example, let's say you're operating an apparel outlet. What would happen to your brand if your sweaters earned a reputation for falling apart in the rain? Or for pilling after a single wash? Low-quality branded merchandise can just as quickly drive consumers away from your brand as high-quality branded merchandise can attract them to it.

2. Relevance to the Target Audience

Even if your merchandise is the best there is, consumers who don't want it aren't going to buy it. Know who wants what you're offering and find ways to give it to them. Working backward is significantly more challenging (knowing what you have and trying to convince somebody to want it).

Understanding your customer demographics is crucial in ensuring your products resonate with them. This follows a similar trend to the standard supply and demand curve. For example, a car dealership would be a better place to advertise if you're selling branded car tires than a bicycle shop.

3. Consumer's Perceived Value

Consumers need to believe they're receiving a good value for their price. Now, that doesn't mean you need to offer the simplest good at the lowest price, just that you should focus on delivering a product or experience that meets or exceeds consumer expectations.

Perceived value can be increased or decreased through several factors, most notably visual merchandising elements. You can better drive consumer behavior toward your brand through high-value graphic design, clever marketing, and the combination of other merchandising techniques.

4. Emotional Connection

One way to increase perceived value is by establishing an emotional connection with the viewer. A cookie alone isn't all that valuable, but a cookie that reminds you of childhood memories with your grandma can be considered valuable. Remember that high value does not necessarily mean high price.

Consumers are more likely to purchase products from brands they feel connected to. Connections like these are most easily brought about through the sale of experiences. Today's shoppers are becoming more attached to experiential retail every year due to this commitment to providing an emotional connection through meaningful and impactful experiences. Apple is one such company.

Case Study: How Apple Uses Brand Merchandising to Direct Consumer Behavior

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Apple is a consumer software and hardware company specializing in iPhone and Mac products. Today, Apple is a household name that needs no introduction. And it owes much of its success to its ability to adeptly execute brand merchandising marketing plans.

Apple's brand merchandising strategy starts with product design. "Sleek" and "minimalistic" are two terms that appear time and time again in Apple's marketing materials, a brand message that remains consistent across all product lines. These visual merchandising elements are complimented by the store atmosphere, layout, and design (both in person and online).

All Apple stores are immediately recognizable, regardless of the surrounding area's retail environment. They feature large glass window displays, row after row of interactive tactile and visual displays, and a veritable hoard of happy-to-help Geniuses. Even the title "Apple Genius," which the company calls its store agents, applies many of the principles of brand merchandising to the company's human capital (employees).

But, if you've ever seen an Apple launch event, you know it's not just about sleek and minimal designs or interactive experiences. The brand's message highlights the need to "change the world," a phrase charged with emotional impact.

All in all, it's easy to see how Apple routinely trumps its competition. The company's brand merchandising strategies present a compelling case study for how consistency, quality, storytelling, and emotional connections can guide consumer behavior and foster brand loyalty. To discuss these findings in the context of your business, contact me any time.

Examples of Brand Merchandising in Retail Contexts

Other retail sectors, like supermarkets, apparel stores, and specialty boutiques, also benefit from adopting brand merchandising techniques.

For example, visual merchandising techniques like the mannequin display showcase how outfits can be put together in apparel retailing. Not only does this stimulate the customers' imaginations, but it can also be used to evoke an emotional connection—if the store atmosphere is one that the customers connect with. Apparel retailers often appeal to youth's desire to be in the "popular crowd" by styling mannequins in that way.

Meanwhile, in supermarkets, mannequin displays are rarely, if ever, used. Instead, businesses use merchandising techniques like product placement, pricing strategies, and promotional signage to guide consumer purchasing decisions. Walmart offers a great example. At every checkout aisle, Walmart sets up a display to capitalize on impulsive purchasing behavior. These displays are easily accessible, marked with promotional signage, and offer low prices—the perfect storm for impulse purchases.

Potential Challenges and Solutions in Brand Merchandising

Although there are plenty of ways for retail stores to make merchandising techniques work, there are just as many ways to struggle with them. Here are three of the biggest challenges I've seen retail outlets encounter:

• Maintaining product relevance when faced with constantly shifting consumer trends
• Designing impactful visual merchandising while remaining within budget
• Ensuring a consistent brand image across various platforms and outlets.

To overcome these challenges, retail businesses will need people like you, who actively go out of their way to read up on market trends and consumer preferences. When you know what's going on in other retail markets and the industry as a whole, you can more accurately predict what's coming to your local market, proactively allocate resources, and solve challenges before they become problems.

In my experience, there's no better way to do this than by leveraging data analytics. Analytics can offer valuable insights into shifting trends, changing preferences, and more, helping brands like yours tailor your merchandising strategies more effectively.

The Future of Brand Merchandising and Consumer Behavior

Nobody's quite sure what the future holds. I'm no Oracle of Delphi, but I can tell you what the general consensus is, and that's that emerging technologies will pave the path to future success. I'm referring specifically to software like augmented reality (AR), virtual reality (VR), and artificial intelligence (AI).

AR and VR are two related technologies that literally control how we see and interact with the world. AR offers visual overlays to augment the in-person shopping experience, and VR offers purely virtual ways to react to the retail industry. Meta's Quest Pro and Apple's Vision Pro are two such technologies.

And then, of course, there's AI. Everybody nowadays has an opinion on AI—and for a good reason. One way or another, it's going to change the world. Companies have already begun implementing AI into in-store software to provide more immersive, personalized experiences. Look at the IBM Sterling Store Engagement Suite as an example of AI in the retail industry.

Countless other technologies are emerging that have the potential to change the world. I encourage you to take some time to learn about them in greater detail. If you have any questions, comment, and I'll happily help.

The Road Starts Now

It's my hope that, by now, you can clearly see the relationship between brand merchandising and consumer behavior. By building a marketing plan around strategic product placement, attractive visual displays, and effective promotional strategies and adopting the right tools, you can guide consumers' perceptions and purchasing decisions like never before. And if you'd like an expert guide to help you along the way, you can contact me.