How you showcase products whether in the physical or digital world holds equal weight to the products themselves. Imagine for a moment how you shop. Do you visit a physical store initially to get an in-person experience? Most shoppers, depending on the purchase, rely heavily on a live experience to get the look and feel of something, but then switch to a digital (quite often) mobile experience to make the purchase and get the best deal. We’ve now entered what is referred to as a “phygital,” or an omnichannel commerce landscape.
In this guide we’ll take a closer look at merchandising; how it started, how it’s going, where it’s going, and the modern, more efficient ways of working for today’s merchandiser. While this role is pivotal to any commerce experience, it’s become more complex as technology and demands of today’s shopper evolve.
Welcome to the Future of Merchandising.
Chapter 1: How it Began
Let’s take a trip back in time to the retail department stores of the 1950s. Luxurious, multi-level physical stores where shopping was considered an event. Shoppers dressed the part, and enjoyed personalized experiences in the form of facials, tailors, personal stylists, billed accounts, and complimentary beverages. It was a place to be seen as a point of status in the community.
A core memory of this time may be the print catalog. Customers looked forward to bulky holiday catalogs delivered to their door and spent hours perusing the pages for the perfect gift for everyone on their list. Print catalogs marked the seasons; with color schemes reflecting bright and happy Spring styles, or the warmth and comfort of Autumn. Order by phone was a customer convenience of the day, for those who were too busy for the physical store and preferred a shop from home experience.
While the merchandising was not anywhere near the level of modern day sets and interactive displays, the mannequins were styled to show the shopper what was possible. The parallels of today are the same; tell a good story and encourage purchases. Build confidence in the store or brand so the shopper feels they can’t do without it. Encourage a lifelong customer who tells their friends and neighbors. Make a shopper feel special. As the adage goes, people won’t remember what you said, but they’ll remember how you made them feel.
While the vestiges of those stores may be long gone, we still see the importance and vitality of the physical store. It’s still a place for experience, where people gather to discover new products and interact with them. Where shoppers need a guide to walk them through a purchase, whether that be in-person or virtually. Shoppers now more than ever want to feel special, be seen, and feel like a part of something.
Chapter 2: When the Physical and the Digital Worlds Collide: The Creation of Multiple Channels, and Multiple Ways to Wow the Consumer
Fast forward to the modern commercescapes of today. Where retail has become a mix of the physical and virtual by customer demand, and the limitlessness of technology. You may have experienced any one or a mix of these tactics in-person or in your inbox:
Signage has evolved from the traditional billboard or daily reprints to reflect current pricing. Now signage helps tell the story while cutting paper waste and repetitive merchandiser tasks. It’s also an opportunity for the brand to further its narrative. Digital signage is used for myriad use cases and is easily repurposed to include menu boards, touch screen displays, custom personalized content, customer testimonials, advertising campaigns, or influencer marketing.
Self-Serve Kiosks and Pop-Up Experiences
In-store, stand alone kiosks offer another autonomous touchpoint to the customer. From product information to demos, the kiosk is a supporting character in the merchandising story. Kiosks are also used as a value add to print coupons on demand, or as a backup for loyalty/rewards customers who prefer not to use the app for their offers while shopping in-store.
Beauty retailers took the kiosk to the next level by installing product vending machines in airports. What better way to market last-minute makeup items for those on the go, or for items that may not have made it passed the TSA check.
Pop-up experiences are now possible through modern, mobile technology. For example, today’s athletic apparel and shoe brands can take their products on a virtual roadshow with POS capabilities.
Picture a foot race or triathlon event where participants have an opportunity to shop the event either prior or after for accessories or shoes (or just to shop what’s trending or newly launched), with an easy checkout from their mobile phone. As retailers are tasked with meeting the customer where they are, this is additionally a powerful moment for brand ambassadors to talk about features and benefits to a captive audience willing to spend money for the best products on the market.
Product Assortment and Categorization
Merchandisers spend much of their time in the digital and physical spaces building out product assortments and categories based on customer demand and seasonality. Whether that looks like a Back to School set on a store floor, or an easily navigable tab on a home page reflecting popular school supplies or clothing, merchandisers spend ample time curating those moments for the shopper experience.
Promotions run the gamut from in-store to digital, and can be tailored to just about any occasion or even non-occasion, everyday flash sales in response to inventory surplus. Customer data plays an essential role in promotions when we think about the rise of loyalty/rewards programs and the sales events customized for those shoppers. In fact, merchandisers can now put together an exclusive web page for certain customers or buyers reflecting special pricing or a limited time offer.
Data is the Golden Ticket of any commerce experience. What you glean from shopping behavior is invaluable. What you do with that information is mission critical.
Aside from a solid revenue generator, personalization allows for the merchandiser to do their job effectively by getting to know their customers and ultimately predicting behaviors to keep the customer in the buying cycle.
As the third-party cookies disappear from the merchandiser’s toolbox, more digital merchandising best practices take shape and relevance such as targeted emails to prevent cart abandonment, zero party data capture, and loyalty/rewards programs. Personalization should support the right products, to the right customer, at exactly the right time.
From a brand who knows the benefits of personalization, Amazon provides an experience second to none on their dedicated app. From a single screen, customers have recommendations for future purchases, the opportunity to pick up where they left off in search, and an impulse buy opportunity with the deal of the day. The search box is displayed predominantly at the top of the page with instant intuitive search results based on past purchases or search as the customer types a query.
Amazon additionally provides customers with targeted emails reminding them about saved items in cart, or cueing a review for a purchased item.
These are a few ways merchandisers have engaged shoppers in unique experiences based on preference and convenience. Proving seamless, quick, and easy ways to shop improves conversion rates and decreases the albatross of all commerce experiences, cart abandonment. Now let’s take a look at how merchandisers are taking on the future to meet customer demand
and the speed of innovation.
Selling products through social media channels is currently estimated at $45 billion and expected to triple in the next few years. This figure equates to more than half of U.S. adults alone purchasing through social media.
Platforms like Facebook, Pinterest, Twitter, TikTok, and Instagram allow brands to create another channel through curated content and influencer marketing. Perhaps the biggest advantage to social commerce is its power within the discovery phase of the buying journey.
Instagram reports 60% of its users discover new products on their platform. When paired with word-of-mouth reviews from people you trust, (or at least share similar tastes) and the ability to tag and highlight products in both Story and Feed, you've got a highly versatile, perpetual sales engine. The path to purchase is expertly laid out from discovery, research, review, one-click purchase, and delivery.
Shoppers can be introduced to new products that are widely socialized, trusted, and peer reviewed, in some cases by people within their own circle or community. While these platforms have dominated in the social commerce market, emerging platforms are gaining steam such as China’s WeChat that houses virtual storefronts on behalf of merchants.
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Chapter 3: Where it's Going
Artificial Intelligence (AI)
AI in commerce is not a new subject; brands have taken full advantage of AR/VR technologies to differentiate the customer experience. Shoppers have the ability to virtually try on any number of products from apparel to beauty items, and virtually place a couch in their living space without setting foot in a store prior to purchase. But how will AI affect the shopping experience of the future, especially for the benefit of the merchandiser?
AI and Inventory Management
AI is disrupting commerce with predictive analytics. In order to properly manage inventory and keep up with customer demand, merchandisers are leaning towards machine learning. Armed with this powerful tool, the manual, more repetitive actions around inventory management and actions such as packing procedures become automated. The merchandiser of tomorrow can now focus on creative problem solving, or activity that furthers the business such as creating promotions or sales strategies.
With the customer’s wants and conveniences at the forefront of a merchandiser’s mindset, there is significant progress in how we allow customers to pay. You’ve likely heard of digital wallets, bank drafts, and the emergence of BNPL (Buy Now Pay Later) options as retailers strive to offer options best suited for a myriad of customers. Aside from convenience and budgetary reasons, a major (and unexpected) benefit of contactless payment included hygiene, as it became an issue during COVID restrictions and lockdown.
But what about complete zero touch payment? Retailers are experimenting today with shopping moments that require no interaction with a human or device. For example, grocery retailers are testing shopping experiences where you only need a mobile device to enter and pay. The physical location is outfitted with sensors to identify what items you’ve added to cart (or returned to the shelf), and once you’re finished shopping you leave the store. Your items are charged to the account or card of your choosing. A simple on demand QR code for store entry is tied to your method of payment.
Traditionally merchandisers managed assets with barcodes to track and store inventory. With the emergence of RFID asset tracking using IoT development services, merchandisers and the operations teams are able to track products that are out of sight.
With RFID tags loaded with digitized information regarding the item, merchandisers can track items at a different physical location or troubleshoot items lost in transit, among other capabilities. The biggest benefits to RFID tracking include a longer lifespan of typical barcode scanning device technology, and the ability to track in real time.
This gives merchandisers more freedom and time with the automation of repetitive tasks (like inventory tracking) so the focus can shift towards solutions to grow the business and drive revenue. Think more time for creativity and less time spent on repetitive tasks.
It’s quickly becoming part of the commerce vernacular as brands look to the future. But what is it? Think of the metaverse as an exclusively virtual or digital space to sell products, but not to be confused with an online store. The metaverse is about how brands interact with shoppers in a digital, multi-dimensional format and introduce them to new products.The advantage is the limitless possibilities without the confines of limited physical space.
Immersed in the metaverse, shoppers can attend a concert or fashion show outfitted with designer clothing all from the comfort of the couch wearing sweats and an old t-shirt, completely at their leisure and on their own terms.
A word most associated with the emerging metaverse is experiential. For example, a popular clothing retailer paired with gaming platform Roblox and allowed consumers to create their own unique versions of an online store. Existing merchandise is showcased in the 3D experience with customizable avatars, items are made available for purchase, and then shipped to a user’s physical address.
Today’s global brands are making investments in the metaverse, and in some cases have already begun selling digital content in response to customer demand.
Why should a merchandiser care? Opportunity. Brand awareness. Revenue growth. Meeting the customer where they are. Selling products to a generation heavily vested in the experience. According to a recent survey, there are broader advantages to the metaverse including:
- Overcoming obstacles such as a disability to do something in real life
- Enhancing creativity and imagination
- Traveling the world without moving
- Increasing technological literacy and skill level
- Connecting with new people without feeling awkward
- New job opportunities
Broadening channel reach beyond B2C and DTC is an emerging opportunity for today’s merchandiser. While the same best practices are used across channels, buyers in a B2B channel are in a unique position with their own set of needs and challenges.
Post-pandemic buyer behavior space tells us the preference remains to operate remotely, managing data and communication through a dedicated portal. Merchandisers have the opportunity to create a customized buyer experience just as they would with any retail shopper.
Herein lies the power of product recommendations based on store, industry, or job, and promotions easily managed for specific products or by store. Customizing data and offerings sets up the relationship between buyer and merchandiser as more of an ally, focused on solutions and efficiencies rather than cold, irrelevant selling.
Chapter 4: Game Changers for Merchandisers: Commerce Platform Innovation
Merchandisers have access to more data than ever before, and therefore have more individual power to make changes based on business needs independent of a developer team. With advanced product management tools and OMS integration the opportunities abound that may not have been possible before.
For example, consider the moving parts of a popular product sale. You’ve spent money and resources on product development based on your core customers. You’ve built out the launch landing page complete with imagery, robust product descriptions based on SEO and search, planned for inventory and supply chain disruptions, and targeted customers with personalized emails and sales event details.
So what happens when the sale goes live and within minutes products sell out? Great news for your business but disastrous for a customer. As a shopper clicks within each product they are met with a SOLD OUT message or can’t add the item to cart. Customer service is flooded with calls and chats fueled by frustration and anger.The clock is ticking until shoppers leave the site and never return to your brand.
With the right tooling and platform, a merchandiser springs into action. Within minutes, and without the dependence on code or waiting on an IT ticket, a merchandiser can transform the experience by removing sold out items, swapping out items for like kind and quality, or adding new items entirely with special pricing consistent with the sale.
An example of a merchandiser’s tool more in line with a shift towards product experience is EP Product Experience Manager. For the first time, merchandisers can create new shoppable opportunities with a mix of Commerce PIM, product merchandising, and catalog composing in one central location without a heavy reliance on an IT team.
What a difference it makes for the business. You now have an empowered merchandiser who has the ability to take action autonomously. They can now spend more time on big picture strategy and promotion versus manual tasks. And that means more innovation. More selling. More solutions in less time and with less resources.
So much to think about as trends and technology move at the speed of innovation. Where will your business go next? Thanks for reading, and check out the companion piece The Future of Commerce Starts Now for more insights and predictions.
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