Ecommerce Merchandising is pushing the conversion needle
Modern eCommerce Merchandising Defined
We at DTC feel that eCommerce merchandising is “the art and science of displaying products or offers on a website with the goal of increasing sales.”
And that’s a great starting point. But to succeed, you have to dig deeper.
Great online merchandising isn’t only about displaying products enticingly — it’s also about optimising your path to purchase no matter where users enter your website or where they are in the path. It’s about getting users to products they’re looking for (or products most likely to drive a desired business metric) as quickly as possible. It’s about connecting users with your brand and giving them a great experience.
Every strategy we discuss here will be centred around those goals.
In traditional retail, “store layout” is of massive importance.
How can you position products to make them easily find-able? What products can you place next to each other to encourage multiple purchases? What path will customers take to find certain items, and how can you optimise that path to increase sales? How can you encourage customers to take certain paths?
While e-commerce sites don’t have physical paths and layouts, they do have digital ones.
Instead of positioning products in a physical store, you’re positioning them within your pages and navigation, planning information architecture and linking strategies to make products easily find-able, and using data to encourage users to view profitable products. We’ll dive deeper into each of these facets shortly.
The goal of branding is to elicit an emotion so buyers can connect with your company/products.
Traditional stores use lighting, paint, colour, music, and smells to represent their brand. While you can’t use “physical branding” (like music, smells, lighting, etc.) in e-commerce, you can make use of imagery, colour, copy, video, unique website layouts, and more to give your users something special to connect with.
Now that we have the preliminary information out of the way, let’s talk about the basics of great eCommerce merchandising.
Where to Start With eCommerce Merchandising
As we’ve established, merchandising is all about selling more products. But to sell more products, you first need an in-depth knowledge of how to sell:
Understand Your Customer (Deeply)
Why are customers coming to your site?
What products are they looking for? What are their expectations? When customers are viewing products, what attributes do they care about most? What questions do they have? What are their concerns & objections? What language do they use when describing them?
The answers to those questions affect every aspect of your website — from the products you show on your home page, to the information you include in product descriptions, to the photos you use across your site/products, and more.
(An even deeper understanding can come from personalisation, but we’ll talk about that soon.)
To sell more products, you must ensure users can find the products they’re looking for — fast.
It’s easy to view search and merchandising as two separate entities, but this isn’t quite right:
Let’s look at some ways you can optimise on-site search for sales:
Invest in good (i.e. modern) autocomplete
According to Gartner, autocomplete can boost conversions by up to 24%.
Good autocomplete, however, does more than estimate basic user queries. E-commerce giants are now combining Natural Language Processing (NLP) algorithms with autocomplete to present query results that approximate user intent. These algorithms are commonly used to:
Correct phonetic misspellings, keyboard proximity typos, punctuation nuances, and omitted character typos. Is it “blue ray”, “blue-ray” or “bluray?” It’s officially spelled “blu-ray”, but you shouldn’t require users to know this to get good results.
Detect synonyms to serve relevant results to users. If a user is searching for “suntan lotion,” good autocomplete will recommend “sunscreen.”
Identify word importance to better understand what results will most likely lead to a conversion. Add support for multiple languages to give the best search experience to any visitor.
But that’s not all: our own data tells us users are twice as likely to convert on products they’ve clicked from embedded product listings.
Automatic results re-ranking
Great search systems automatically re-rank search results for products most likely to lead to a conversion.
A basic example of results re-ranking is as follows:
If 40% of users who search for “laptops” purchase the laptop in the 8th search position and 22% purchase the laptop in the 5th search position, it would make sense to re-rank the 8th laptop higher (perhaps in one of the first few positions) and the 5th laptop closely following. Other laptops that users don’t frequently purchase should be moved down in the search results.
Great re-ranking systems, however, don’t only re-rank exact-match product results. They also re-rank attractive products
We at DTC constantly research the latest technologies that compete with the traditional merchandising platforms available.
Apart from having a platform that has the features below, it is also best to ensure it has an API first architecture to ensure all features will integrate with any platform.
Crucial features of a Merchandising Platform include:
Merchandising Strategies determine the merchandising effects to be applied on your site, together with the look and feel. Here we outline some merchandising ideas to help you achieve your merchandising goals and business objectives.
Effective merchandising increases online revenue through higher conversion rates, higher average orders value, fewer cancelled orders and lower returns.
It is achieved through controlling the prioritisation of product sequencing throughout the site so that retailers can tailor what they display.
Use the Best Sellers strategy to prioritise products on your site, showing all the best-selling items first.
Clear Old Stock
Use this strategy to promote older items and/or automatically reduce the price of older stock.
The Golden Rule
One of the best general-purpose merchandising strategies, it prioritises products that are popular based on views, purchases, stock, and margin.
Prioritises products based purely on their conversion rate. It can be enhanced by choosing additional product metrics or adding additional merchandising strategies.
A simple strategy for prioritisation based on margin - its a good starting point for creating more sophisticated strategies.
High Value Trending
This strategy blends trending items with a descending price sortation order - effectively skimming off the higher-priced trending items.
Low Price Trending
Prioritises trending items using ascending price, to deliver the lower-priced trending items.
A good general-purpose strategy that prioritises equally by publication date, trending, and purchases.
Prioritise Sale Items
This strategy prioritises products that are on Sale or on Clearance, together with an ascending price sortation.
Promote Higher Stock
Prioritises products with higher stock levels. This strategy can be enhanced by adding other metrics such as price, margin, and popularity.
Warm Colours, Cold Colours
A strategy aimed at prioritising warm or cold colours - useful for new seasonal items.
Weighted User Journey
Prioritises products based on views, adds to basket, and check-out. Each stage of the customer journey is double the importance of the previous stage.
Page Element Designs
Page Element Designs are a unique and powerful merchandising tool. It is analogous to painting shapes onto the page to determine where merchandising effects are to be applied. Here we explore some design ideas to maximise the effectiveness of your merchandising strategies.
Enables retailers to use two different strategies on the same page - e.g. alternating between best sellers and trending.
Enables retailers to specify brand adjacency rules.
Group by Colour
Group products together on the page based on their colour attributes.
Group by Product
Assign different product categories per row/column on the page.
Group by Style
Assign different product styles per row/column on the page.
Deploy multiple Merchandising Strategies within the same page.
Promote Edge Prices
Promote products at either end of the price scale, with mid-price items being demoted.
Target individual hotspots on the page.
Merchandising Concepts enable retailers to give meaning to their product data, using definitions that will be familiar to their customers, in order to affect the product prioritisation.
Create a Concept for Seasonal Colours, by defining what that actually means in terms of colours.
Use Concepts to define certain brands as being a luxury brand or an economy brand, and then applying the appropriate merchandising strategy.
Create style definitions such as Casual, Formal etc. using Merchandising Concepts.
Create a technical term such as High Definition, then define what that means in terms of resolution.
Custom Ranges allow retailers to determine the importance of product prioritisation across a size, colour, or price range, by defining a custom distribution. This provides more sophisticated prioritisation options than standard linear min/max sortation.
Promote Different Pricing Segments
Define customised pricing distribution to promote a specific pricing segment or segments.
Taper Lower Stock
Apply a non-linear tapering to declining stock-levels to avoid over-selling.