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Digital Merchandising And Its Benefits To Companies

Mar 28, 2008
Merchandising is loosely defined as the selling effort through the use of promotions such as unique displays, giveaways, or discount and premium offers. In another way, it is defined as the act of managing and arranging the merchandise on display in order to promote its sale. The most commonly used ways of propping a product or service on site includes the use of signage, creative product displays, promo staff and a hybrid/combination of some or all of those mentioned.

In the last few years, a new way of promoting products called digital merchandising started gaining in popularity. In fact, a huge provider of digital merchandising services report an annual growth rate of 25% with contract renewals at 80~90%. This means that companies are continuing the use of digital merchandising most probably due to several benefits that it was proven bring.

The proven benefits include the increase in sales (more than 50% in certain categories), Better flow of communication, Enhanced customer experience and optimal return on investments.

1.Better flow of communication: With the use of digital merchandising, the seller can easily create variations of advertisements, infomercials, or anything that they want the target clients to see and control its timing. For example, a various presentations can be sequenced randomly so as not to make it monotonous and appealing to different types of customers who come in at different hours.

2.Enhanced customer experience: It can be very entertaining, educational and convincing at the same time making it a very effective sales instrument. An interview with a top advertising executive revealed that in the retail and hospital industries, digital merchandising is very successful in promoting customer satisfaction and return clients. Furthermore, the banking sector also found it a very good medium for educating clients and prompting them to inquire about bank products and services.

3.Optimal return on investments: Compared to the traditional signage, it does not require repetitive installation. Simply install the devices once and contents may be changed as often as the owner wants (through digital programming). There are no costly regular expenditures like printing, warehousing and logistical expenses. With digital merchandising, there is only an initial expense and nothing but minimal operational costs. As a result, the investment is recovered earlier than the usual.

But while digital merchandising continues to bring wonderful results for various entities, it is not the all encompassing solution to any company's requirement to increase sales and retain existing customers. Digital merchandising is simply an effective medium and it is the message being imparted that will create awareness, stimulate curiosity and eventually convert viewers into paying customers.

For instance, a lot of drugstores play a combination of product presentations, practical first aid tips and health advice. I have not made a study of hospitals but since it has the same target market, I can imagine that they present basically the same content.

Financial institutions like banks have been observed to combine their products with relevant global, national and local information that's of interest to the clients. They play business news, stock market updates, golf and other relevant items combined with their products and services.

To maximize the benefits of digital merchandising, the challenge is how to create eye catching, entertaining, informative and convincing content aimed directly at the target audience. Sales pitches (company promotion) are very important but in order to retain the customers' attention, the programming should include a good blend of contents that are best suited to the target market.
About the Author
For more information on digital merchandising contact EK3 Sources: http://www.captiv.com.au/pdf/Captiv.%20Digital%20Merchandising%20Guide.pdf http://www.captiv.com.au/digital_merchandising.asp-source http://www.avaya.com/master-usa/en-us/resource/assets/whitepapers/Retail%20Merchandising%20IND377
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