Let's take, for instance, this Anthropologie display of shoes and bags. How was it conceived? And why does it work? First of all, it is rich and neat at the same time; it looks full but it doesn't get crazy. And you want to give your customer choices, but not overwhelm them with too many options.
Another great merchandising practice is, whenever possible, to keep together the items that are not competing between each other. Take, for instance, the first cubicle from the upper left corner: a pair of heels, a pair of sandals, and a clutch. The customer could just as easily grab the heels and the clutch, as they could the sandals and the clutch, depending on the type of outfit they're trying to complete. If they are looking for a more elevated outfit, the choice is clear, whereas if they are going for a more casual look, it's pretty straightforward, too. Different options for the same kind of shoe or the same kind of bag should be spread out.
It's not a perfect science, though, and "the puzzle" sometimes won't allow for all of these factoring "pieces" to come together, but the goal is to make it as inviting, exciting and pleasant as possible. Ultimately, you want to guide the consumer throughout the story that you're telling, and have it be consistent with the concept within which your product is framed, always thinking about the business and the needs of your specific location, as well as your specific target customer's shopping habits, behavior and, most importantly, their needs and desires.