Shelves and displays have played a key role in attracting customers and driving retail sales for decades. Attractive packaging, strategic placement of goods in the store, promotions at the point of sale — all of these things still affect the choices of offline consumers.
However, the digital age has revolutionized the art of product promotion. The transition from offline to online shopping has given rise to new rules of interaction. The focus has shifted from physical proximity to digital accessibility, from tactile interaction to an exciting online experience. Consumers have gained the ability to browse, compare, and buy products from the comfort of their homes or on the go using smartphones and tablets. Online merchandising has become a standard in e-commerce.
In this article, you’ll learn the basic principles of online merchandising, its components, and strategies that help brands and online stores cut through the digital noise, improve product visibility, and optimize digital shelves to increase market share.
Online merchandising is a set of actions to improve the e-commerce customer experience and effectively display products. It is used by brands, distributors, and retailers to increase sales.
Online merchandising covers the presentation of products, including their promotion and placement on brand websites and the digital shelves of online stores and marketplaces. It includes a number of methods and tactics aimed at optimizing online purchases, driving sales, and maximizing customer acquisition — all of which we will discuss.
The 5 R’s of Merchandising (for E-commerce)
In e-commerce, online merchandising is governed by the 5 R’s — and every category manager knows these unwritten rules.
Here’s what each of the 5 R’s means:
1. Right product: Offer the right products that meet the needs and preferences of your target audience.
Conduct market research to understand customer requirements, trends, and preferences. Analyze data (sales history and customer feedback) to identify popular and profitable products.
2. Right place: Make sure your products are strategically placed on your e-commerce platform.
Optimize your website navigation and user interface so customers can easily find what they’re looking for. Use categories, filters, and search features effectively. Make popular products more visible.
3. Right price: Price your products competitively.
When determining prices, consider market trends, competitors’ prices, and your costs. Offer discounts and promotions or bundle deals when appropriate to attract customers. Use dynamic pricing strategies based on demand, seasonality, or other relevant factors.
4. Right time: Launch new products, promotions, and marketing campaigns at the right time to maximize their impact.
Consider seasonal trends, holidays, or special events when planning sales or new product launches. Use data analytics to identify peak sales times.
5. Right people: Implement effective marketing and promotional strategies to increase product visibility and attract customers.
Use different channels — social networks, email marketing, partnerships with influencers and contextual advertising — to reach your target audience. Create compelling product content, use SEO techniques, and encourage customer reviews to increase sales.
By keeping these 5 R’s in mind — right product, right place, right price, right time, and right people — online store category managers can improve their merchandising strategies, attract more customers, and drive sales growth.
E-commerce opens up a wide range of opportunities for consumers to find and choose products. To keep up with the competition, vendors and distributors need to constantly work with partner sites, namely with:
Digital Shelf Stock Availability. If your product is Out-Of-Stockon the digital shelf, it does not exist and no one is going to buy it.
Product page content. If your product has no description, no details, and few pictures, buyers will ignore it and perhaps even feel annoyed.
Reputation. If your product has no reviews, or if the average rating of your product is lower than that of your competitor’s product, you have lost the battle for the customer.
Digital Shelf Stock Availability, content, and reviews are three important aspects of building an online merchandising strategy.
Let’s talk about them in detail and consider a solution to simplify their analysis. After all, you must first collect and process data before you take action and set goals for your colleagues. Spoiler: you don’t have to do it manually.
Digital Shelf Stock Availability
For vendors and distributors, it is essential that every product is available on the digital shelf exactly when the customer wants to buy it.
That’s why product availability, or OSA (on-shelf availability), is one of the key retail metrics.
Low availability equals lost sales and lost potential profit.
Reducing the number of lost sales and the number of out of stock and off the shelf cases starts with implementing tools to collect daily data from partner stores.
How to Collect Data for Digital Shelf Analytics
Let’s say you’re interested in selling your products on hundreds of sites: marketplaces, online stores, single-page affiliate sites, etc. How can you track product availability taking into account dozens of criteria? Obviously, manual analysis is inefficient. Pricer24 can help, namely with its Digital Shelf Analytics.
You will be able to analyze the shelf presence of your products in marketplaces and on other sites, namely:
1. To find out if the entire assortment of the brand is available at the partners’ stores. Availability is monitored by catalog categories, sales leaders, new products, and other criteria.
2. To track how well new products and sales leaders are represented. Catalog monitoring shows the actual position of products in the search results.
Content Is King
In e-commerce, the main source of product information is the product page. Improving the user experience on product pages directly impacts sales.
Will a visitor want to buy your new product if the product page has only a sparse description and one photo? Maybe, if you sell… bread. In all other cases, the more data the product page has, the higher the probability that the product will be purchased.
That’s why apart from the title, product pages should contain a detailed description, product specifications, photos from various angles, as well as videos and 3D reviews.
Content Analysis Automation
With Pricer24, in just a couple of clicks you can see:
Which products lack descriptions and what partners do not show detailed product information
Which products lack product specifications
What descriptions your competitors use
How many photos and videos are on product pages
Reviews and Ratings
Product reviews and ratings are another powerful tool for improving the user experience.
Product rating is the number of “stars”.Product review is the text. Source: ebay.com
All other things being equal (such as product details and price), a consumer is more likely to buy a product that has more reviews and a higher rating.
Reviews and ratings also affect product visibility in the catalog. For example, a partner’s site can:
Sort by high/low product rating; products with a high average rating are listed first
Filter based on the minimum rating in a review (“no less than 4,” for example)
Display products with high ratings closer to the top of category pages
Add a special icon to products with the highest rating (top seller, new product, etc.)
By the way, according to the Baymard Institute, sorting by rating is the second most popular sorting type. Yet in many online stores, it is implemented quite primitively: by average rating without taking into account the number of ratings. This is exactly how it works on Amazon.com and Ebay.
However, one should not confuse the average rating of an item and the position of an item in search results, as the position of an item can be calculated taking into account different factors.
Along with tracking the quantity and quality of reviews and ratings, timely and appropriate responses to negative comments are a necessary part of promoting a brand and its products. One negative review that isn’t adequately addressed can lead dozens of customers to competitors. There are no small things in online merchandising.
How does Pricer24 help you monitor reviews?
With Pricer24, you can quickly understand:
Which products have the most reviews
Which products have low ratings
Where negative reviews appear, whether the partner is working on them, and how you should respond.
Successful Online Merchandising Strategies in 2024
Technological progress, changes in consumer behavior, and new market trends drive e-commerce forward. Here’s what might be relevant to your online merchandising strategy in 2024:
Personalization using artificial intelligence and machine learning
71% of consumers now expect a personalized online experience, and 76% are disappointed when brands don’t provide it. The modern consumer wants products to meet their personal preferences and tastes. Personalization not only makes the buying process more interesting and meaningful but also helps establish strong relationships with customers. A classic example of successful use of this strategy is Amazon: personalized recommendations account for 35% of all Amazon sales.
If you want to improve the customer experience, it’s worth investing in artificial intelligence and machine learning technologies to help integrate personalized product recommendations based on individual customer behavior, preferences, and past purchases. In addition, it’s worth using personalized promotions and special offers to create the impression of personalized interactions with your company, which is important to customers.
Omnichannel sales strategy
Seamless interactions across all channels, allowing for easy switching between a seller’s online and offline channels, are what buyers expect in 2024. Channels can include marketplaces (Amazon and eBay), standalone online stores, social media platforms, mobile apps, and brick-and-mortar stores.
According to data from Shopify, three out of five consumers first browse for products online before purchasing them in-store. This shows that different sales channels influence each other: displaying products on a website or in an online store can increase sales in a physical store. And vice versa: A physical presence can strengthen an online presence. Brands receive an average of 37% more web traffic per quarter after opening a new physical store.
Cross-selling
Hubspot reports that companies implementing cross-selling strategies have seen revenue increases of up to 30%.
Cross-selling is a sales technique that involves offering additional or related products to customers based on their purchasing or browsing history to increase average order value and improve the overall shopping experience. Cross-selling is a key strategy for companies seeking to increase profits, strengthen customer relationships, and streamline operations.
By effectively leveraging these trends, companies can provide a seamless multi-channel shopping experience while driving additional sales with product recommendations and offers based on personalized recommendations. Implementing these strategies requires a deep understanding of customer behavior, effective use of technology, and continuous optimization to meet changing customer expectations.
Summary
Online merchandising has become a standard in e-commerce, so it’s impossible to ignore. From strategic product placement and compelling content to personalized recommendations based on data analytics, every detail plays a critical role in capturing an audience and increasing conversions in the competitive e-commerce environment.
In addition, consumer behavior, which is constantly changing under the influence of technological progress and shifting preferences, necessitates constant adaptation and innovation. The success of online merchandising depends not only on product presentation but also on the integration of technology, data-driven decision-making, and a deep understanding of consumer psychology. Striking a balance between aesthetics, functionality, and personalization is key to building long-lasting customer relationships and brand loyalty.
FAQ
Why does online merchandising matter?
Online merchandising is of great importance in e-commerce, as it optimizes product presentation and user interactions and increases sales through effective customer engagement.
What are today’s e-commerce merchandising trends?
Current trends in e-commerce merchandising include AI-powered personalization, omnichannel sales strategy, and cross-selling enhancements.
What are the best practices for online merchandising?
Online merchandising best practices include using data-driven insights, implementing personalized recommendations, automating brand presence monitoring across sales channels, and maintaining a consistent omnichannel presence.
What are the elements of online merchandising?
Elements of online merchandising include product presentation, content in product cards, a visually attractive and understandable interface that adapts to various devices, and user-generated content: customer reviews with product photos and videos.
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