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May 12, 2022 | 5 minute read

Digital Merchandising Best Practices

written by Emily Kathi

No argument that eCommerce sales skyrocketed in the last two years, as the world turned to mobile devices to buy everything from a week’s worth of groceries to a new couch for the family room. But even as the world opens up post-pandemically, eCommerce retail sales maintain the top spot on the leaderboard. Projections point to upwards of $7 trillion in sales by 2024.

What’s happened to merchandising as we’ve made the shift from brick-and-mortar to a virtual store and cart? Plenty. How do you translate an in-store experience into an engaging digital one that leads a shopper to Buy Now sight unseen? Let’s dive into the world of eCommerce merchandising and find out how retailers create a path to purchase from the physical to the digital experience.

What is Digital Merchandising?

Also known as eCommerce or online merchandising, digital merchandising is the practice of marketing goods in the digital space. Just as you map product placement and displays in-store with branding considerations to draw the customer over, the same actions happen in a virtual store to entice the shopper from their chosen device. Product merchandising is about having the right assortment, and showcasing it at the right time to the right customer. You are essentially creating content; and given the 2024 online sales projections retailers can’t afford to sit this one out.

Make a Plan & Get Campaigning

You may have a number of goals for your business; you’ve targeted a specific sales growth percentage or doubling down on the number of promotions per month, or you’d like to grow your loyalty program for top spenders. Whatever the case may be, once you’ve set the goals it’s now time for strategizing. You’ve stated the what - now you need to flesh out the how.

Personalization: It’s a New Day for Data Collection

When it comes to eCommerce merchandising campaigns it’s ok to get personal. In fact, it’s mission critical. With the death of third-party cookies, retail marketers are forced to revisit how they collect data and lean in on first or zero-party solutions to power personalized shopper experiences. Research shows today’s shoppers care how you get their data and what you do with it.

“Seventy percent of consumers like personalization, as long as brands are using data they’ve shared directly.”

Source: Twilio

A Common Personalization Trap: The Creep Factor

There are many schools of thought on how much personalization is too much. I think we can all agree that ultimately personalization should best serve the customer and fulfill a need. Stepping outside the boundaries and creating an inaccurate assumption defeats the purpose of winning trust.

For example, I’m a pet owner. I often browse and shop online for pet food and supplies and have tried the numerous subscription services based on this category But that also means over the years I’ve had to inevitably say goodbye to pets. Here is a snapshot of the types of personalization I could experience based on the data capture:

Zero Party: The cat food you liked in our poll is now BOGO

First Party: The pet carrier you browsed last month is on clearance

Second Party: Congrats on the kitten! Need pet insurance?

Third Party: It’s hard to lose a furry friend. Next time, check out our pet caskets and internment services

You’ll notice as we progress through each scenario, the degree of personalization falls a bit further into the off-putting range. What you ideally want to do is solve a problem or create a convenience; not push the limits of knowing too much.

“Personalization can mean a lot of things, so it’s important to understand what a marketer thinks it is and how it’s creepy. This can often clear up initial concerns. Then for us, the guiding personalization principle is to figure out if and how it adds value to the end user…”

Source: Paul Munkholm, Kettle

Interested in Learning More About eCommerce Merchandising?

Discover 10 areas to optimize your eCommerce merchandising strategy for your business and more with our playbook.

Go to Playbook

Ecommerce Merchandising Trends and Tips to Consider

Many of today’s digital merchandising tips and trends are based in AR/VR technology, embraced in greater numbers by Gen X and Millennial groups. A few examples of these tactics include:

  • Virtual dressing or try-on rooms allowing shoppers to try clothing or makeup swatches from any device, wherever they are, before purchase
  • “See it in your room” capabilities for furniture or décor accessories to replicate digitally what the item will look like in a shopper’s home or space (a useful deterrent from returns)
  • Social networks like Pinterest and Instagram have leveraged this technology in their algorithms. Studying how they strategize and leverage it in the path to purchase in-app can be useful if you’re looking to see more AR/VR in play
  • Implement 360 plug ins and enable virtual product tours across devices

It really depends on your product assortment and what you’re able to invest in as far as technology – you need to assess what works best for your business. Bear in mind how critical it is for shoppers to get the same level of comfort and confidence they do from an in-store experience and a face-to-face conversation with a retailer - having a unique experience is key to engaging (and keeping) today’s shopper.

Product Merchandising

Product merchandising is key to all types of channels. And what eCommerce has shown us is the complexity around merchandising. In today’s eCommerce landscape retailers have multiple digital storefronts, complex pricing needs to reflect flash or scheduled sales, loyalty pricing, or bundling models.

A Rapidly Changing Landscape

Ecommerce changes rapidly so it’s important to be on top of what’s trending in digital merchandising technology and how that affects your customer. The in-store experience is not going away; instead the merging of the physical and virtual is now the combined commerce narrative. Operating and streamlining the experience in both worlds is becoming the norm.

Above all – make it easy, friction-less, predictive, and personalized (appropriately), from discovery to purchase. Answer questions for your customers before they even know they had them. Build trust and confidence from the first time they click on your site or app. Make shopping with you an unforgettable experience they simply can’t do without.