Merchandise is any possible memorabilia of the movie. There are tons of posters and tinplates and such that you can buy, never mind even more mundane things like magnets, mugs and other household items as well as "conversation pieces".
Your view won't shake my impression of over 30 years. It was *never* a big deal in my lifetime; I am well aware of the changes in TV and media options from then to now. Only mentioned in some text books, especially film classes where they love it, of course. Had to see it in a liberal-arts basic film class (I'd seen it before).
Along with a true masterpiece like "Singin' in the Rain". At least they had some perspective of true greatness! ;D
SITA is another movie that was 'just another musical' until French critics in the 60s took it up and passed it along to American critics in the 70s. At the time 'An American in Paris' was much more highly regarde'.