What Is Ecommerce Merchandising?
Just like in brick and mortar stores, ecommerce retailers need to make an atmosphere in their store that encourages sales. The overall goal of ecommerce merchandising is to boost conversions and average order value. This is done by connecting the right customers with the right products. Simple, right?
Maybe not so much… Merchandising is actually incredibly complex. Firstly, it requires that each merchant knows their customers, as the success will depend fully on this. It’s not just about choosing products, setting a discount and making it visible: it’s about knowing which shopper is most likely to buy.
On top of that, product and price changes, frequent promotions and alternating business models can complicate the process, and without being equipped to deal with all these issues, merchandising efforts can fall apart.
So, why bother with merchandising? You might now be wondering, since it seems like a lot of effort. Well, to put it shortly; when done well, it really works. Top-notch merchandising is able to; attract customers, generate traffic, increase a variety of sales and turn casual browsers into buyers. It can create a seamless shopping experience, increase brand loyalty, and increase brand recognition.
The concept all depends on this: presenting products at the right time, in the right place, to the right customers. So how can we go about doing this?
Merchandising strategies are the practices that we can put in place in order to achieve these merchandising goals. Choosing to take on certain strategies can break down the overall aim of merchandising, allowing us to focus on what we want to achieve, and how we want to achieve it.
In order to implement strategies, it is important to decide which business goals your company is currently focussing on, and adjust the strategies accordingly. Having the right strategies is one of the most powerful tools available for capturing shopper attention and driving conversions.
When deciding on strategies, there is not a ‘one size fits all’ comprehensive approach. A holistic approach is needed, individual to each company, and within the company individual to each category or segment. Finding the specific goal the company is working towards is the first step.
One useful way of approaching this is working with customer focused eCommerce strategies; so leading with the customer intent. This means noticing what the customers want, and adjusting the strategies to suit the users. There are different customers segments that can be appealed to:
- Returning customers: those who have come back to the site, so are interested
- High purchase intent shoppers: those who come to the site with a clear idea of what they want
- Browsers: customers who are there to browse
In order to appeal to all these categories, implementing a range of strategies is the smartest way forward. One way of not letting this become overwhelming is by setting weekly KPI’s (key performance indicators), in order to track where you want the strategies to take you, and how long this should take. Then combine this with the business objectives, and start to create your strategy list.
Strategies To Choose From
So now we know that there are many different strategies that can be employed depending on what the business goals are. Let’s take a look at a helpful list of strategies that you might consider using.
What it is: Ranking strategies focus on how the products are ranked within the website, which can be dependent on different variables. These can apply on the search results page, the drop-down options from the search bar, or product pages in general. These merchandising strategies are crucial to ensuring that products are presented in the most beneficial way, so let’s take a closer look at some of the ranking strategies:
- Stock Availability Ranking Strategy
A stock availability strategy uses the quantity of products available to determine where items are placed in good view. If the stock of one t-shirt is very high, for example, and the merchant is interested in prioritizing the sales of this product for that reason, this one could be placed first in the search bar menu, or product page. On the other hand, if a product is in low stock and the merchant is interested in shifting the last of the items, this one could be placed with a higher visibility in rankings, meaning that all inventory is sold.
On the other hand, low stock items could be buried, meaning that only customers who search for this item can find it and the browser doesn’t come across an item that they may not be able to buy, as it is low availability.
This strategy could be particularly useful for fast fashion brands, or any other company with a frequently changing product list. When the moving of inventory is priority, this is a ranking strategy that can be really useful.
- High Margin Items Ranking Strategy
The high margin ranking strategy is ideal for a business that prioritizes the sales of big ticket items, or is focused on increasing profit. Placing items that generate a higher sales margin in a more prioritized spot increases the chance that people will purchase these items, and will boost the AOV and overall company gain. If increasing payback is the motive; this could be the strategy for you.
- New or Old Items Ranking Strategy
The ranking strategy that places new or old items first could be useful for a company that has seasonal collections, with different styles according to the weather, the time of year, or trends of the time. If the target market is keeping up-to-date with relevant trends or newest products on the market, then putting the new items first could be a great strategy. If old items may soon stop being produced, then it could be a good idea to place these items at the top in order for people to see them.
On the other hand, old items could be placed lower down, as they may be less appealing to the customers. It’s important to know what your market is interested in, but using this knowledge can result in a great increase in conversions.
- Reviews Ranking Strategy
The ranking strategy that emphasizes items with positive reviews, or with many reviews is great for companies that are looking to build their brand community and work on increasing social proof. Having positive reviews ranked first means that customers are instantly aware of the positive response your product elicits from the customers, enriching trust. Highly ranking items with many reviews shows to customers that these products are tried and tested, liked by other customers, and can be trusted. Whether you opt for positive, or many reviews, this strategy will build brand trust, and is a great way of encouraging customers to spend their money with you.
- Best Sellers Ranking Strategy
Making sure that best selling items rank highly on the collection page or search bar menu is using what you already know to work, to your advantage. Since these items have already sold so well, ranking them highly in results lets other people know their success, and encourages them to buy them. It makes a lot more sense to place the best selling items higher, rather than obscure items that people might not be so interested in. The result? Increased conversions and AOV.
- Recently Trending Items Ranking Strategy
This ranking strategy would be useful for businesses that rely on the latest trends, and want to present a brand image that gives the impression of being ‘up to date’ or ‘on trend’. Whether this is to do with fashion, technology or any other store that is part of a fast paced industry, showing that the business is aware of what the customers are looking for is vitally important. This ranking strategy can therefore increase trust, and customer loyalty.
What it’s useful for: Depending on the business aims, these strategies can be adjusted and made to suit you and your business perfectly. The importance of ranking is not to be downplayed, as the first things the customer sees when they look on your website are of huge importance; exactly the same as in a brick and mortar store. So don’t waste those opportunities! There are many different ranking strategies to choose from, so take a look and decide which one suits you best. Then put it into play, either way- a ranking strategy is definitely necessary; it can really benefit you- and it will.
Product Recommendation Strategy
What it is: This strategy includes putting a strong emphasis on cross-sell and upsell recommendation features such as ‘Recently Viewed’ and ‘You May Also Like’. These are features that are personalized to every shopper in real-time, based on real-time data. Because of this, these recommendation features can be incredibly successful in engaging and captivating customers’ attention. This strategy uses advanced machine learning to constantly work at increasing the AOV each customer will potentially spend on the store.
What it’s useful for: If your goal is increasing AOV, and shifting stock, this is the strategy for you. This is also useful if you are trying to grow loyal repeat customers, by showing that you care about them and their needs. Overall, this strategy is great for a company trying to boost their revenue, whilst at the same time appealing to customers as it shows them what it is they actually want to buy.
What it is: Personalization uses available data about the customers to make the content they see on your ecommerce site, or in marketing communications, personal to them specifically. Name, location, site history and previous purchases can be used to inform the personalization. From this information there is the potential to make wishlists based on abandoned carts, for example, or personalized email campaigns. A personalization strategy focuses on these capabilities and puts an emphasis on making each customer that visits the store feel as though they are unique, and highly valued.
What it’s useful for: This is useful for increasing customer and brand loyalty. Turning browsers into buyers, returning customers into lifetime customers, and showing lifetime customers that you genuinely care about them. Personalization is a very important strategy, if you are an ecommerce site and you are not using this, it’s time you joined the trend!
Social Proof Strategy
What it is: A social proof strategy puts an emphasis on product reviews, and real customer testimonies from having shopped at your ecommerce store- highlighted across the website. Since 93% customers look at reviews before buying something online, this strategy uses this knowledge to your advantage. It places an emphasis on ratings, social media reviews and other media mentions highly visibly across the whole website; in short, if someone comes onto your store, they will see the social proof clearly. Social share buttons can be integrated into product pages, and any existing product reviews can be amplified.
What it’s useful for: If the goal is to generate a buzz for the business, then this is definitely the strategy to turn to. This also creates a sense of community around the brand, and encourages customers to become loyal and lifetime members. The good thing about this technique is that by seeing other customer reviews, new customers are also encouraged and incentivized to leave their own, so it’s a cycle that will keep on spinning. This strategy is the strongest way to build social proof.
Mobile Merchandising Strategy
What it is: This strategy decides that putting an emphasis on mobile merchandising is the top way to ensure good results. A huge percentage of eCommerce sales nowadays are made through the mobile phone, so this strategy ensures that eCommerce sites either have an app that facilitates this (companies with a mobile app tend to do better) or a smart and mobile friendly website layout. At the least, the website should be optimized for mobile use. Making sure that the website has a strong mobile look and feel can have huge results for the business.
What it’s useful for: This strategy builds customer loyalty as it optimizes the convenience of their shopping experience. Being able to finish a purchase omni-channel increases conversions and boosts customer satisfaction. If the brand wants to appear as up to date, relevant and modern, this mobile strategy is definitely a good way to go.
Will It Work?
In short, yes. These strategies are tried and tested, and if the outcome suits your businesses needs, then it’s definitely worth trying them. However, just because you’ve implemented a strategy doesn’t mean you need to stick to it for good.
It’s important to test your strategy, seeing what works and produces the desired effects. Trying things outside of the box is a great way to see what sticks, and maybe you will surprise yourself. A/B tests are a useful way of seeing what works for your customers, as you can collect data from real visitors during the test, seeing which strategy produces the most conversions.
This possibility gives you the chance to be unique, stand out from the crowd, and create the optimized business model and strategies that will ultimately suit you.