Merchandise, like everything else, goes up and down based on the popularity of the product...IE when wrestling popularity is up Merchandise sales increase, and vice versa. Fewer people watching means fewer people buying.
The only thing that really transcends this would be the "Greatest Hits" collections on DVD. These are not marketed to weekly viewers of Raw & Smackdown, they are marketed to an older demographic that likley doesnt follow WWE full time or only does so for short periods, say around WrestleMania for instance. These collections spotlight stars who either are retired/deceased or while maybe active now are in the twilight of their careers, these sets focussing mainly on their prime periods of success.
However, WWE really mined this goldmine with two Hulk Hogan sets (his matches were never that good to begin with), updated retrospectives on Steve Austin & Shawn Michaels combining WWE footage with their pre WWE careers (it helps WWE owns the video rights to so much non WWE product), and probably the gran daddy of them all, the two Ric Flair Collections (three if you count the Four Horsemen Anthology). They've also done sets for HHH, Multiple collections for Undertaker, sets for Dusty Rhodes, Roddy Piper, Ricky Steamboat, Randy Savage, even Curt Henning. After awhile it becomes hard to find stars who had careers long enough and prolific enough to spotlight, although WWE has also made a mint off of specialty collections combining WWE, NWA/WCW, World Class, ECW, & AWA footage for things like their "Greatest Steel Cage Matches" series or sets dedicated to Ladder Matches. We've also had retropsective sets celebrating the best of the biggest and most successful annual PPVs like Starrcade, WrestleMania, & Royal Rumble, sets dedicated to Raw & Nitro, Saturday Night Main Event, & Clash Of Champions. WWE has been churning these sets out with great regularity since Vince started aquiring the librararies of his old rivals circa 2002 (also around the time stars like Flair, Hogan, etc returned to the company).
At this point I think the Retro DVD market has been pretty well tapped. However, there maybe a few things that havent been done yet such as...
Greatest Hit Collections for NwO & The Attitude Era (both about to be released)
A second Brett Hart Collection or even a third Flair set (their careers are big enough to support this)
Collections for Lex Luger, Kevin Nash (separate from the NwO set) or a Steiner Bros Anthology (Scott's extremely bad reputation and constant bad mouthing of so many top wrestling stars makes this unlikely)
A Sting set (probably wont happen as long as he is under contract to TNA and unable to participate in the project) - Same with Kurt Angle
Ted DiBiase's career would make a great set, especially now that WWE recently aquired significant Mid South footage
A continuation of the" Greatest Rivalry" Series spotlighting matches and promos from other legendary rivalries (like they did for HBK-Hart)...many good ideas here if they wanted to make this a two or three times per year series, such as Flair-Steamboat or Flair-Rhodes, Austin-HHH, Randy Savage vs Hogan, Flair, and/or DiBiase, Piper-Hogan, Brett Hart vs Owen, HBK-Taker, Austin-Rock, Cena-Edge, many more
A "Best Of" set dedicated to Great American Bash/Bash At The Beach PPVs going back to the original stadium show in 1985 - Maybe one for SuperBrawl also
Set dedicated just to "Forgotten Classics" spotlighting great matches that aired on TV (like Raw & Nitro for instance) that have been forgotten because even though the match was really good it wasnt a part of a huge storyline or major feud (some of Brett Hart's early Raw title matches come to mind for instance) - This could be a great combo with stuff from the late 90s/early 00s alongside some vintage 70s/80s stuff.
As far as T-shirts, posters, etc - those things are marketed to kids and kids buy when the product is popular, those sales will rise again when the product as a whole ticks up in popularity.