What is the aim of product differentiation in retail merchandising?

The aim of product differentiation in retail merchandising is to distinguish products from competitors. This approach focuses on highlighting unique features, quality, design, or branding that set a product apart in the market. By creating a distinct identity for products, retailers can attract consumers who are looking for specific attributes or benefits that competitors may not offer. This differentiation helps create a loyal customer base, enhances brand recognition, and can justify premium pricing.

When products are differentiated effectively, retailers can compete not just on price but also on the value provided to customers, fostering a strong competitive advantage. This strategy is fundamental in a saturated market, where many similar products exist, and consumers cannot readily distinguish between choices based solely on price. Instead, they look for unique characteristics that appeal to their preferences and needs.