Ecommerce is evolving, and so should retailers! Whether you’re looking to attract first-time visitors or inspire returning customers, the key is to implement the right merchandising strategies to transform your digital storefront.
Furthermore, adding a personalized touch to your merchandising strategies is the way to go for staying ahead and competitive in this booming retail sector.
37% of online shoppers have purchased a personalized product, highlighting the importance of tailored shopping experiences. [Source]
What is Ecommerce Merchandising?
In this blog post, we are going to dig deep into the what, why, and how of ecommerce merchandising, top strategies, and what software tools retailers should look for to implement smart merchandising strategies.
The strategic process of selecting, showcasing, and promoting products on an online platform to optimize sales & enhance the customer shopping experience. It covers how products are displayed, categorized, and described. It includes implementing advanced technologies for personalization and data-driven decision-making. Merchandising strategies need to continuously experiment with personalized elements to identify what resonates most with your audience.
Traditional merchandising includes physical store displays, while ecommerce merchandising is the digital type of traditional one. To be very straightforward, if customers find the right product, that means merchandising is efficient to keep you ahead in e-commerce.
Why is Ecommerce Merchandising Important?
Ecommerce merchandisers when effectively implement merchandising strategies, businesses can drive the following high-time benefits:
- Improves conversion rates: A well-merchandised online store helps customers exactly what they’re looking for. It reduces friction in the buying journey and leads to improved conversion rates.
- Enhance customer experience: Engaging product descriptions, clear categories, and tailored recommendations improve customer experience and give a smooth shopping experience.
- Boosts Average Order Value (AOV): Bundle strategies with cross-selling and up-selling increase every transaction amount leading to a higher average order value (AOV).
- Drives customer attention: A personalize and customized experience makes customers return for future purchases
Use case: Amazon’s merchandising strategy includes personalized recommendations and “frequently bought together” bundles, which has immensely boosted their space in ecommerce growth.
How Did Ecommerce Merchandising Start & How Does It Work Today?
In the early days of online shopping, the primary goal was simply to replicate the brick-and-mortar experience on the web. In the 1990s, big players like Amazon and eBay did all the basic work by focusing on straightforward product listings, basic search functionalities, and minimal web design. That was the initial stage and it mainly prioritized making products available and searchable rather than improving the shopping experience. The emphasis was on accessibility and establishing trust in the relatively new retail area.
The Evolution of Ecommerce Merchandising
Early days and today, ecommerce has evolved over the years, and merchandising has transformed into a sophisticated science art, and technology. Modern ecommerce platforms include artificial intelligence(AI), advanced algorithms, and data analytics to create personalized shopping experiences. Here’s how it works today:
- Personalization
- Dynamic Visuals and Content
- Smart Search and Navigation
- Data-Driven Decisions
- Upselling and Cross-Selling
- Seasonal and Trend-Based Merchandising
- Social Commerce
5 Ecommerce Merchandising Strategies- Tested & proved
By effectively implementing ecommerce merchandising strategies, businesses not only drive revenue but foster long-term customer loyalty. Let’s have a look at the top seven tested and proven strategies to take your ecommerce strategy to the next level:
Don’t Underestimate Website Visuals
Website visuals are just more than aesthetic elements, they are important for building trust & driving conversion. Your website is your storefront success and in the digital world, first impressions are everything.
Research shows that 94% of first impressions are related to design, and it only takes 0.05 seconds for users to form an opinion about your website.
That’s the power of Visual appeal.
Here’s what to include in website visuals and Tips for Optimizing Website Visuals:
- Clean layouts
- High-quality images
- Intuitive navigation
- Promo banners
- Spotlighting banners
- Invest in High-Quality Product Images
- Use Videos and 360-degree Views
- Prioritize Mobile-Optimized Design
- Incorporate Eye-Catching Banners and CTAs
AI-powered Personalization & Recommendations
Ecommerce is getting more competitive day by day, and personalized shopping experiences have become an important factor of success. Businesses can provide tailored shopping journeys that increase customer engagement, meet each shopper’s preferences, and lead to brand loyalty and conversions.
How AI-Powered Personalization Works
Artificial intelligence uses machine learning algorithms and customer data such as demographics, purchasing history, and browsing behavior to analyze what shoppers are most likely to buy. This approach lets retailers adjust, modify, and create a unique shopping experience for every shopper by offering product recommendations, curating the entire homepage dynamically, and tailoring promotional offers.
Benefits of AI-Powered Personalization
- Increased Conversion Rates
- Enhanced Customer Retention
- Higher Average Order Value (AOV)
Real-World Examples
- Netflix and Spotify: These platforms are masters of personalization, curating content based on user behavior. E-commerce businesses can adopt similar tactics to recommend products or create “For You” sections.
- Shopify Stores: Many Shopify merchants utilize AI tools like ReConvert or LimeSpot to implement recommendation engines that boost their sales significantly.
Tips for Implementing AI-Powered Personalization
- Leverage Customer Data
- Utilize Recommendation Engines
- A/B Test Your Strategies
Sustainability
Sustainability is not a buzzword anymore, it has become a core pillar of ecommerce success. This age shopper especially millennials and Gen Z look for a brand that prioritizes environmental and social responsibility. For ecommerce merchandisers, business leaders & decision-makers, making sustainability a part of their merchandising strategy isn’t just an ethical choice, it’s a profitable one.
Why Sustainability Matters in Ecommerce
73% of global consumers are willing to change their consuming habits to reduce environmental impact. (A 2023 Nielsen study)
For retailers, this trend goes to a growing demand for eco-friendly products, sustainable practices, and supply chains. Most brands that follow these values stand out in the competition to gain customer loyalty and capture long-term wins.
Strategies to Incorporate Sustainability
- Curate Eco-Friendly Product Lines
- Use Ethical and Transparent Sourcing
- Leverage Sustainability Certifications
- Optimize Packaging
- Incorporate Green Marketing
- Encourage Product Recycling or Reuse
- Measure and Share Impact
The ROI of Sustainability
Sustainability isn’t just goodwill, it fuels growth.
Businesses with robust sustainability programs experienced a 15-20% increase in customer retention and a 10-15% higher conversion rate. (a 2024 report by McKinsey)
By considering eco-conscious practices in your ecommerce merchandising strategy, your business can fulfill customer expectations and boost profitability at the same time.
Product Management & Curation
This ecommerce merchandising strategy focuses on presenting the right product to the right audience at the right time. Effective product management and curation are the foundation of successful ecommerce merchandising. It leads to higher engagement and conversion rates.
What Does It Involve?
- Strategically selecting and organizing product catalogs
- Meet customer expectations while aligning with market trends
- Curation with a personalized touch
- Showcasing product in a way that resonates with the audience
Why does It work?
- Because customers value relevance and personalization
- Well-curated product selection makes a brand memorable and trustworthy
Practical Steps to Implement:
- Analyze Customer Behavior
- Segment Your Audience
- Highlight Trending and Seasonal Items
- Leverage Upselling and Cross-Selling Techniques
A thoughtful approach to product management and curation not only improves the customer experience but also boosts your sales potential by ensuring that every product you showcase has a purpose and appeals to your target audience.
Optimal Site Search Technique
An effective site search function is the cornerstone of successful ecommerce merchandising. With more than 43% of ecommerce visitors using the site search bar during their shopping journey, optimizing this feature can significantly impact conversions. For business leaders and retailers, ensuring a seamless and intuitive search experience can lead to higher customer satisfaction and revenue.
- Leverage Autocomplete and Predictive Search
- Support Synonyms and Common Typos
- Filter and Sort Results Dynamically
- Highlight Recently Viewed and Popular Products
- Optimize Search for Mobile Users
- Analyze Search Data for Insights
- Utilize AI for Contextual Understanding
By investing in predictive search, personalization, mobile optimization, and AI, retailers can create a search experience that not only meets but exceeds customer expectations, resulting in increased conversions and loyalty.
3 Software Must-Haves for a Smart Merchandising Strategy
A robust merchandising strategy powered by the right software can enhance customer experience and strengthen brand loyalty. Here are a few essential tools that are important in their merchandising strategy:
1. A Smart Site Search Bar
An advanced site search tool is the backbone of an intuitive shopping experince. It includes AI recommendation, and semantic search to understand user intent, correct typos, and provide relevant suggestions in real time.
For example, leading ecommerce platforms like Amazon and Zalando incorporate predictive search to reduce friction in the customer journey.
“30% of users rely on on-site searches to find what they need, and these are 1.8 times more likely to convert than those who don’t.”
Smart site search bar with advanced filtering options and AI-driven autocomplete can improve product discovery leading to higher conversion and overall better user experience.
2. Personalization Recommendation Tool
There are several personalization recommendation tools in the market like Convertopia, Add Search, and Doofinder. These are highly advanced tools to recommend a product based on preferences, behaviors, and customer browsing history.
Famous brands like Netflix and Shopify-powered stores implement personalization tools to keep the user hooked. Also, businesses that exceed in personalization drive 40% more revenue than average players in the industry. Ecommerce retailers implement tools like Convertopia, Nosto, and Add Search which use machine learning to tailor recommendations in real life. It improves cross-selling and upselling opportunities to create a bespoke shopping experience.
3. Audience Segmentation Capabilities
Audience segmentation enables you to categorize your customers based on criteria like demographics, purchase history, location, or even engagement behavior. This approach helps in crafting targeted campaigns that resonate with specific segments, driving higher conversions.
For example, Nike uses audience segmentation to design campaigns tailored to different fitness levels, regions, and lifestyles. As a result, they can deliver hyper-relevant messaging, ensuring better engagement.
Software solutions like Klaviyo or HubSpot offer sophisticated segmentation features, allowing retailers to drill down into customer data and design impactful, personalized merchandising strategies.
Wrapping it Up!
Implement any software tools into your ecommerce store to create a smart and effective merchandising strategy. With smoother navigation, targeted segmentation, and hyper-personalized recommendations businesses position themselves for sustained growth.
Effective merchandising with the right approach can immensely have a boosted effect on customer behavior, boost engagement and ultimately drive conversion. Above all explained are tested and proven strategies by ecommerce retailers and decision-makers who have made a loyal customer base.
Don’t consider ecommerce merchandising as a one-size-fits-all solution. It’s important to tailor strategies according to your business model. If you’re there and want to try a site search tool for effective merchandising try Convertopia’s free trial.