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eCommerce Merchandising: The Ultimate Guide

Gokul
Working with Global Online Businesses to Hyper-personalize the Customer Experience through advanced AI and Maximize Conversions 🚀🚀


eCommerce merchandising is an exact science and a form of abstract art. Confused? To understand what it is, you need to divide it into two components:

The first part is about boosting sales with accurate and real-time customer data and KPI in place. This is the science component. 

The second part is the artistic element of your overall visual merchandising online strategy. This component is about connecting your shoppers to the right products. It is about presenting your products in a way that empowers your shoppers to connect with them on a deeper, more intimate level. It is about conjuring omnichannel, personalized, and relatable merchandising ideas that will ultimately help build a lasting and organic relationship with the end customer. With 95% of purchases expected to become online by 2040, understanding the intricacies of eCommerce merchandising should be every retailer's raging priority.

In this comprehensive guide, we will deep-dive to understand the various facets of eCommerce merchandising as well as product merchandising so that you can improve your sales, build powerful customer journeys, and stay relevant in an increasingly competitive business environment.

What is eCommerce Merchandising?

eCommerce merchandising is basically about guiding your users through their diverse online customer journeys. It is about how you are selling products to your customers.

In stark comparison to brick-and-mortar stores, the eCommerce customer journey is way more complex. Why? Because in the online world, your customer may end up on your eCommerce brand's metaphorical door in numerous ways--through a mobile app, via the Instagram page, a Facebook post, or even an email. 

When it comes to eCommerce merchandising, here are a few other key characteristics to make a note of:

End-goals of eCommerce merchandising

To display products strategically on a website with the end goal of increasing discoverability, conversions, and revenue

To optimize the path to purchase, no matter how users end up on your website or where they are in the purchase journey

To deliver a stellar and personalized customer experience, which can improve key business metrics

To persuade customers to purchase items and influence their buying habit in the long run by studying their actions and shopping behavior

Evolution of eCommerce merchandising

eCommerce merchandising today is omnichannel at its core:

- Shoppers want an omnichannel experience across platforms and devices

- As per data, multi-channel shoppers end up spending three times more than single-channel shoppers

Elements of eCommerce merchandising

Branding, product placement, imagery and graphics, content marketing, and so on

Why is eCommerce Merchandising Important for Your Website?

The real question to ask at this point is: Why is the eCommerce merchandising process central to your business's growth and success? Here are four compelling reasons:

  • Consistent user experience: eCommerce merchandising empowers your brand to provide a consistent and similar user experience, regardless of how shoppers end up on your website. 
  • Differentiated user experience: It also enables eCommerce retailers to differentiate their offerings. In the online retail space, you have the luxury of showcasing different products each time a shopper lands at your website. In other words, you can provide effective experiences to boost conversion rates, improve brand image, and ensure customers keep coming back for more.
  • Accomplishing strategic business goals: One surefire way of accomplishing your business goals is by integrating your marketing campaign directly into your eCommerce site  and also enabling product discovery. You can do this via targeted content, ads, and banners placed strategically on the website.
  • Personalized and convenient shopping experience: Another benefit of eCommerce merchandising is that it allows you to offer relevant products to your end customers in a customized manner. This becomes possible with the use of artificial technology to analyze user shopping behavior trends, optimize product rankings, and customize websites at the user level.

The learning: In summary, eCommerce merchandising paves the way for a well-functioning, customer-centric website, allowing your brand to stand a cut apart from the competitors.

The Three Types of Merchandising: At a Glance

Let's quickly run through the different types of merchandising and how they differ:

Parameter

Traditional

Merchandising

eCommerce

Merchandising

Omnichannel

Merchandising

Definition

Relies on physical immediacy and instant gratification of in-store experience

Relies on online platforms such as an app or website to pave the way for convenient and immediate online shopping; customers largely self-serve to cater to their needs

Focuses on optimizing the customer experience across shopping contexts and providing a holistic shopping experience across multiple touchpoints

Strategies used for enhancing customer experience

Physical factors such as lighting, paint, music, smell, product positioning, signage, etc. used to deliver a unique customer experience

Best-selling items placed at the front

Products are placed together to maximize conversions and drive upsell/cross-sell opportunities

The website's UX and UI are worked upon in terms of changing imagery, color combinations, content, video, layouts, etc. to boost user engagement

Leverages emerging technologies such as AI and machine learning to improve product stickiness,  prioritize customer experience, and drive revenues

Product display

Displayed in one location in a physical store; relies on traditional mental models of product categorization

Sorted and displayed as per website hierarchy

Products are shown to customers based on the personalization of preference/choice

Product discovery

In-store displays and promotional signage are used for visual merchandising eCommerce and to drive product discovery

Search engine optimization and keyword search functionality are used to drive product discovery; discovery largely happens via product browsing, search, and recommendations

Customer clickstream data and user behavior data used to drive

Product information

In-store representatives answer key product questions

Product descriptions with important features and attributes answer user queries

Virtual try-ons and product quizzes help offer relevant information

Personalization and recommendations

Personalization is offered by in-store reps; they may make general product recommendations and act as a:

  • trusted advisor
  • product expert
  • experience curator
  • inventory manager
  • fulfillment specialist

Preferences indicated by customers on the website can be used to drive personalization; recommendations are made on broad generalizations

Machine learning allows for a contextual and personalized shopping experience across different touchpoints; recommendations are based on individual user behavior

Inventory Management

Dependent on individual store stock; reps need to manually find items in other stores

Out-of-stock items appear on the website; manual intervention needed to suggest alternatives

AI-powered search results and recommendations eliminate out-of-stock items and suggest in-stock items in real-time

Fulfillment and Returns

Occurs in-store

Warehouse fulfillment, shipping directly to home/office, etc.

Dynamic order routing, Buy Online, Pickup in Store (BOPIS), etc.

Biggest challenge

Catering to rising customer expectations and user experience heavily dependent on the in-store rep's abilities

End-to-end personalization of customer experience is limited; the user experience is largely "one-size-fits-all" in the approach

Can be a costly investment for smaller eCommerce brands who are just kick starting their eCommerce journey

15 Proven eCommerce Merchandising Strategies You Can Make Your Own

In this section, we will look at some time-tested merchandising techniques and strategies you can adopt and elevate your eCommerce merchandising game:

1. Ensure that your eCommerce merchandising is omnichannel 

For today's dynamic online shoppers, the lines between physical and online stores have drastically blurred. To provide a contextual and hyper-personalized user experience across channels, eCommerce retailers need to embrace AI and machine learning technologies and lay the foundation for deep personalization. Amazon's AI-powered personalization techniques are the stuff of legends and need no introduction:

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By leveraging the right kind of technology, you can:

A. Data-driven decision making: Apply invaluable insights about customer behavior, preferences, and patterns into your marketing campaigns, website, and other collaterals

B. On-point customization: Personalize and optimize shopping experiences and boost your product’s attractiveness

C. Learning mindset and customer-first culture: Ensure that search query is an opportunity to learn more about your users and tailor experiences to offer them exactly what they’re looking for. 

2. Keep your end-user in mind when developing A/B testing the site:

Driving a customer-centric, holistic user experience is the bedrock of eCommerce merchandising. When it comes to delivering on ease of use and website functionality, it helps heaps to keep your end-users at the front and center of your initiatives. Your website's navigation should be simple, convenient, and seamless, as ASOS demonstrates below:

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Here are some handy tips to ensure that your website offers a friction-free user experience:

  • Build a relevant and logical home page, which makes sense to the end-user in terms of what the brand is all about and what its offerings entail

         Make sure to include specific product categories on your home page as BestBuy showcases below via its "Top Deals," "Deals of the Day,"

         and other categories:

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  • Don't go overboard on your categories or undersell it either. It needs to be the right number.

          Bonus material: If you're in the fashion online retail space, check out this useful blog on fashion eCommerce trends.

3. Always incorporate internal search, especially on your product pages:

Doing so makes it easier for the customer to find specific products. Remember that your internal site search and product merchandising are one and the same thing. The brand Loctote takes it one step further by recommending 'phrases' that the customer might be looking for in the search results section:

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Bonus material: Since personalization is a key influencer of eCommerce conversions, your merchandising strategy should leverage the power of personalized search. Here's a handy guide on personalized search for eCommerce

4. Learn about AI-based searchandising:

AI-based searchandising is the process of strategically placing items within search queries to boost products and by extension, revenues. You can invest in a product discovery platform, which can optimize results automatically based on key parameters such as  product attribute, inventory, clickstream data, and so on. This will not only help you improve your business KPIs but also elevate the customer experience.

5. Invest in modern autocomplete:

Research suggests that it can boost conversions by 24%. You need tools that leverage Natural Language Processing algorithms to be able to gauge user intent. These algorithms can provide multi-language support, correct common mistakes, identify synonyms to provide relevant results, and detect word importance. Hayneedle’s autocomplete feature takes its autocomplete functionality one step further by demonstrating suggested search results in a distinct font style and color:

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6. Embed product listings in your search bar:

Embedding product listings in your search bar encourages more clicks via search. Apple's website effectively embeds popular products in its search area as shown below:

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7. Automate re-ranking of search results:

You can also re-rank attractive products that your customers are most likely to buy. Take the following example. Searching for broccoli on Amazon throws up garlic in the search results, possibly because most consumers purchase the two items together:

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8. Make use of filters and faceted search:

This eCommerce merchandising strategy helps to break down your customer's search results further, filter them into subcategories, and eventually makes it super easy to find the right product faster. For instance, if you search for "Women's dresses" on Macy's website, the faceted search feature will allow you to narrow down the number of search results to get to the desired item/product:

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9. Integrate your best-seller items, past viewed products, and recommendations:

This visual merchandising eCommerce strategy is fairly commonplace now with most retailers showcasing their best-sellers, recently viewed products, etc. to gather the customer's interest:

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Incorporating this strategy also empowers customers to literally pick up their shopping experience where they might have left it off.

10. Personalize, personalize, personalize:

The power--and impact--of accurate personalization cannot be stressed enough. If you are wondering about how to increase customer lifetime value, personalization is key.

Data indicates that a staggering 80% of consumers will more likely buy from a company that offers a personalized experience. There are literally thousands of ways to personalize your eCommerce merchandising strategy such as:

  • Auto-suggesting results
  • Ranking the right products based on the user's search query
  • Offering product recommendations based on individual customer preferences as opposed to taking a blanket approach

Personalization does not happen overnight. You will need to gather historical user data (think: past purchases, website behavior, etc.) and basic as well as advanced demographic data (think: age, gender, personal likes, and dislikes, etc.) to segment your users the right way. Other types of data you should be looking at include:

  • Customer location
  • How long users are typically spending on your site
  • Average order value (AOV)

You can monitor your website traffic via a platform such as Google Analytics to gather said data. Alternatively, you can store data when customers create an account or sign up for your newsletter or keep a call log of customers who get in touch with your support team.

This way, you can build a reliable and in-depth customer profile/buyer persona and leverage actionable insights to incorporate within your eCommerce merchandising strategy. Here's an example of a customer profile for a clothing/accessories brand:

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11. Work towards influencing your customer's buying habits:

Some of the most effective strategies to positively influence your customer's buying habits include:

  • Strategically placing a Call-to-Action button
  • Reminding customers about abandoned cart items
  • Nudging customers to "order again"

12. Spruce up your homepage merchandising:

Your eCommerce website's homepage must be optimized to meet the user's needs. Ideally, ensure that your homepage contains the following important elements for an optimized experience:

  • Brand’s mission statement or goal
  • High-quality images of your popular products/services
  • A clearly visible link to your "About Us" section
  • Promotional deals/offers (if any)
  • Option for users to sign up
  • Strategically placed CTAs to drive purchasing

In addition to the points mentioned above, make sure to highlight the following on your homepage:

  • Highest converting products
  • Currently trending products/bestsellers as Bliss demonstrates below:
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  • An easy-to-access drop-down menu with categories
  • Highest-rated products
  • Predictive search on your site's search functionality

The following website homepage encapsulates all the above features well:

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13. Keep revisiting your product page merchandising:

When it comes to optimizing your product merchandising, there are many merchandising ideas you can adopt:

  • You can group products under a category page for easy comprehensibility. Make use of the following parameters to group products within categories: brand, product type, color, size, style, product uses, and features.
  • Ensure that your product pages in particular are SEO-optimized
  • Your product page should ideally have the following elements to ensure that customers land on it easily and stay on the page long enough to be able to purchase a product of their choosing:

- Include 360-degree views of your product images

- Always have a detailed product description for every product featured

- Include product specifications as needed

- Insert product videos and demos to capture user attention

- Cross-sell/up-sell relevant products (during checkout)

- Have a CTA such as ‘add to cart'

- Insert a search functionality at the top

Pourri's product page is an excellent example of product merchandising done right:

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14. Rethink your products in terms of category merchandising:

Category merchandising is a super-useful strategy that's used to rank products within their category. You can make the customer's life easier by adding relevant filters so that they can arrive at their chosen product quicker. Your category merchandising should include:

  • Popular products that you wish to draw your customer's attention to
  • High-quality product images and videos
  • A spotlight on the best-selling product from the respective category
  • Star ratings and reviews
  • Product comparisons on options available

Take a look at the following product category page for inspiration. Kohl's categories its products across various simple categories:

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On selecting the "Father's Day" option, you'll end up on a landing page with further sub-categories:

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15. Pay close attention to your brand's visual identity:

eCommerce visual merchandising is all about how you present your brand visually to your customers. All the pages of your website should be visually- and aesthetically consistent. You can also add 'social proof' on your website as eBay demonstrates below:

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By clearly highlighting seller information, the number of product pieces sold, and offering user reviews, customers can shop with greater confidence.

Other expert-approved ways in which you can improve your eCommerce visual merchandising online include:

  • Using minimal text and maximum imagery on the homepage
  • Including demo videos if the product demands so
  • Linking your social media feed on the homepage
  • Taking high-quality product photos

Top-5 eCommerce Merchandising Examples

1. Solo Stove: Adding a Personalized Touch Visual Merchandising Online

Solo Stove is an eCommerce website that provides grilling equipment, camping stoves, and fire pits. You'd think that the images would be product-centric showing the products from different angles and variations. But the website demonstrates a refreshing change by adding a 'human' element to its visual imagery. Across the website, the brand reinforces the importance of togetherness--people are seen enjoying the product, laughing, and making memories around a fire:

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Instead of aggressively promoting the product, Solo Stove takes the human route to tug at the heartstrings of its core audience.

2. LARQ's Unique Calculator on the Homepage

If you want to connect with your target audience on an intangible basis, might we suggest what LARQ accomplishes through its Calculator on the homepage:

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Though the brand is in the business of selling eco-friendly bottles, it takes its brand positioning up a notch by catering to the audience's social responsibility. Users need to basically put in the number of water bottles they consume each week. They are then shown:

  • How much money they can save by getting themselves a LARQ bottle instead
  • How much they reduce plastic bottle waste and carbon footprint:
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To further personalize the offering, the brand offers a customized suggestion to the end customer, making the purchasing process convenient and easy:

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3. Skullcandy's Website Brand Positioning is Consistent, On-point, and User-Friendly

While product merchandising is an integral component of every website, brands must not forget that customers in the end want to know more about the 'people' behind the brand. One website that effectively demonstrates the people behind its operations is Skullcandy:

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From its mission and internal culture to its sustainable efforts, the brand has a dedicated section on the website called "Inside Skullcandy" which provides customers with an inside sneak-peek into the brand's workings.

4. Bon Bon Bon's Visual Artistry is Legendary

As mentioned earlier, your brand's visual aesthetics are extremely important in capturing your target audience's attention. Truth be told, eCommerce merchandising is all about creating a great first impression--and Bon Bon Bon does this will exceptional mastery:

The unique fonts and typography used to capture the brand's spirit effortlessly:

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The color-popping visuals have a vintage touch and feel to it:

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The brand's aesthetics is unique to its own identity--it doesn't feel like a run-of-the-mill brand. Instead, it exudes a sense of premium(ness), which is also translated into its pricing model. All in all, it is an excellent example of eCommerce merchandising done right.

5. Black Diamond Equipment's Visual Merchandising is Aspirational and Inspirational

Another website that's worthy of being on this list is Black Diamond Equipment. The website sells climbing, skiing, and snowboarding equipment. What's interesting to note is how proudly it demonstrates professional-grade photography. Potential customers can literally envision what it would be to like to use its products:

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This kind of aspirational selling has worked for many brands in the past. Tech giant Apple comes to mind as another example. The biggest sale lesson here is that hard-selling should be avoided at all costs. Customers want a personal touch at every juncture of your eCommerce website--from the CTA button and the add-to-cart button to the signup section or product pages. Every click, like, share, add, or any other button is an opportunity to demonstrate your brand's personality to the user--as visually as possible. You should also ensure that your website design is mobile-friendly and you've got a winning website at hand.

The Bottom Line: eCommerce Merchandising has Emerged as a Must-Have

"Nearly 74% of US consumers claim that they will continue to shop online even after the pandemic ends."

If you think eCommerce retailers don't need to work on their 'online environment' to entice shoppers, think again. According to estimates, 63% of shoppers claim to do research online when making major purchases. Furthermore, around 70% of shoppers tend to do their shopping in "micro-moments"--or unplanned, short online shopping excursions that are mostly done on mobile devices and apps. Additionally, around  35% of people confess that they will shop online more often if they could try on the product before purchasing. Needless to say, eCommerce merchandising is very much a reality of the online shopping space today. 

eCommerce retailers need to laser-focus on their product merchandising to catch more eyeballs, skyrocket sales, and above all, provide customers with personalized recommendations that fit their end user's needs to the T.

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