You walk into the invitingly open door of an artisanal coffee shop on the chic street with several tables scattered along the windows, with comfy cushions in patched armchairs, low-hanging copper lamps, and an overwhelmingly awakening aroma of just-roasted and freshly ground coffee.
Your glance falls onto the shelf of cutely displayed coffee mugs and tightly sealed glass jars. All your senses are aroused masterfully by a team of merchandising professionals.
They spent weeks thinking about the shop flow, assortment, ambiance, music, smell, displays – so that if you buy your coffee here once, you’ll return for more.
Ideally, you tell your friends about it too.
In an online shopping experience, merchandising has the same very purpose as offline retail merchandising: to sell at the right time and the right place for the highest profit with the least amount of money tied up (or worse, even stuck!) in inventory. But the means, techniques, tools, skills required for an eCommerce merchandising manager are considerably different.
In eCommerce merchandising, managers don't get access to your senses of smell, taste, feel, or even hearing for the most part. They only get your eyesight. This is why traditional offline physical merchandising is so different from the online kind.
In this piece, we'll immerse the reader in the nitty-gritty of online merchandising, based on our vast experience with creating custom web designs for eCommerce, including:
- What is online merchandising?
- What is the difference between traditional and eCommerce merchandising?
- What are the functions of online merchandising?
- Examples of best practices in fashion merchandising
- Specifics of custom made merchandising solutions in eCommerce.
What Is Online Merchandising?
Generally speaking, merchandising is a set of activities pertinent to the retail business at the intersection of marketing, interior design, and revenue management that are intended to promote sales of goods in the right place at the right time and the right price tag for maximum profitability with the least possible unsold inventory.
I know, definitions do get confusing.
So, let's understand what a merchandising manager does to better illustrate retail merchandising.
Merchandise Management Functions. A Retail Merchandising Specialist Is Responsible for
- identifying new suppliers (serves as a buyer or purchasing manager),
- attending seasonal exhibitions and conferences to find the best vendors,
- selecting a store’s assortment based on seasonal trends,
- negotiating the most profitable prices & terms for the goods,
- monitoring, managing and topping up inventory,
- staying ‘in the know’ about industry trends and competitors’ offerings,
- ensuring buyer-friendly ambiance in the store (music, scents, display),
- liaison with marketing, revenue, and finance departments to create promotions, and
- overseeing positioning of goods according to the company's brand standards.
Now that we have demonstrated in detail a merchandising manager's duties, let's discern how online merchandising is different from the traditional type.
eCommerce merchandising has the same overall mission as traditional brick-and-mortar-stores do: to drive sales at the highest profitability with least cash flow tied up in inventory. But the methods, tools, and techniques used are totally different. Let’s consider this more detailed definition of online merchandising:
Online merchandising is a branch of eCommerce marketing that is designed to drive online store inventory sales at the highest profitability as compared to the competition by leveraging multiple resources and tools, inclusive but not limited to: competitive pricing, sales intelligence, website design & UX, demand planning, digital campaign calendar management, flow management, and inventory management.
Naturally, an online environment offers a whole new set of tools and weapons to encourage a customer buy stuff from you.
To start with, online shopping is a 24/7 business.
Take that, brick-and-mortar world! Just imagine how much faster tipsy people part with their money.
Now, that we touched upon it, let’s see how the two channels are different.
Traditional Offline Merchandizing vs Online Merchandising
Product description
Well, you don't even need to describe anything in a physical store – the buyer can touch it, feel it, and smell it. There is a minor amount of required info like fabric contents and care instructions, but otherwise, what you see is what you get.
In an online shop there are multiple ways to substitute for physical touching and inspection of the product:
- provide a full description – as thorough as possible
- provide images, video, using 360-degree photography
- provide an AR app to make the experience closer to physical shopping
- provide reviews from customers who have tried and can endorse a product or give feedback.
Getting Customers Into Your Store
This is a major difference that is a huge advantage for the eCommerce world.
You can get your customers shopping when they are most susceptible, when they are off guard, in the comfort zone context of of Facebook or Instagram, after having had a glass of wine. And if their favorite celebrity shows them your lovely thingy… even better. Organic shampoo with green tea and lemongrass, and her hair looks like that? Take my money.
When it comes to attracting customers to the malls, people have to be out and about with time and preferably money on their cards to start with. That's a lot of preconditions right there. We have not yet touched the buying intent, by the way. So this is where merchandisers do their magic: they put up a catchy sign, create a mesmerizing sale promo inscription, put the rhythmic music on, fill the space with a specially-developed aroma.
At this stage alone, there is an ocean of difference between the two types of merchandising.
Product Search
There is a science behind shop flow design that takes into account the width of aisles, the statistically optimal height of clothing racks, dimness level of lighting, and so on. There are recognizable layouts for shoes and customary racks for hats. There are different rooms for different brand collections (think Zara TRF), and product placement in a pyramid, horizontally or vertically. Without realizing it, customers are led through a lined-up flow of merch that's presented to them in a physical shop.
In an online store, people browse categories and use extensive search and filtering options to find what they are looking for. It’s quick and easy.
Managing Inventory
It's such a fine line when it comes to inventory management in physical shops – you have to have a jeweler's precision in localized forecasting in order not to be left with too much unsold stock or not enough, causing missed profits from out-of-stock items.
In eCommerce, inventory management is more versatile and flexible as items can be shipped from anywhere in the world, drop shipped via a 3rd party, or delivered from a warehouse or any company location.
Recommendations, Cross-selling & Upselling
With Amazon making over 1/3rd of its revenues from recommendation engines, it's selling power, when backed by the right algorithms and AI, is undeniable. Upselling, cross-selling, and recommendations are a huge part of the sales stats for eCommerce.
In physical stores by contrast, recommendations and upselling are limited to the few by-the-counter interactions with a salesperson really for the most part.
Online Merchandising Strategies & Techniques
1. A picture is worth a thousand words
Images sell.
Many images at different angles sell even better.
360-degree images of products allow for simulating the offline shopping experience (a 27% increase in conversion speaks for itself).
Images of products in context or a lifestyle mode with models allow a potential buyer to picture an item in his/her life more vividly.
If there’s one cost center that you need to forget about saving cost on – its product photography.
2. A video is worth a thousand pictures
Video content is kinda heavy, but it is worth using for the sake of conversions (if your servers permit the load). This is the most immersive content out there. Adding a 2020 human spokesperson to constantly changing, dynamic, flamboyant content, is probably one of the very few sure-fire ways to keep people on a product page.
3. Ensure your words are more eloquent than a thousand pictures
The product description doesn't have to be boring and mundane to be descriptive. It can be a storytelling piece of copywriting mastery in your unique tone of voice that sells a dream, a lifestyle, or a fantasy. Leave no questions unanswered and speak in the words that resonate with your target audience.
4. UGC – Social proof that converts
There are several plugins for all sorts of eCommerce platforms and websites that allow users to embed an Instagram feed or hashtag into the homepage or a product page.
Featuring a few user-generated images with your product in them is an automatic conversion booster and a compelling social proof trigger.
5. The personalized retail shopping experience
Personalization is one of the many tools specific to the online environment and the extent of granularity is out of this world.
You can start featuring different offerings based on gender (one of the most universally available demographic factors), go into birthday page designs or promotions or location-based targeting.
6. Make search intuitive and granular
Search, sorting, filters, and navigation are the definitive factors when it comes to finding the right product among thousands of SKUs. Your search option can go as far as presenting autofill alternatives of available item titles as a user types in a query, or even offering an image search right away.
E.L.F cosmetics successfully uses this trick.
7. Use analytics to sift through the high-intent shoppers
Get your hands on whatever analytics you can: Google Analytics, CRM, merchandising software, inventory solutions, social media reporting. The bigger the set of data you have, the more actionable insights it's possible to get out of it.
Asking the right questions is another art to master when working with big data.
Scrutinize your high-intent shoppers with the help of marketing automation tools. Also, people who use search functions are 2.7 times as likely to buy as those who are just browsing around.
8. Showcase your promo offer as soon as you can
Don’t be shy about presenting your clients with an offer you worked hard to create with the marketing and revenue team.
Break the ice and make the first move. Make the offer that is impossible to turn down.
Homepage or hero images are a good spot for that. What a warm welcome!
9. Upsell everywhere: Shopping cart too
Upselling and cross-selling are a meticulous process that involves email drip campaigns and other tricks. In fact, some veteran eCommerce entrepreneurs dared to put it into the shopping cart as well. Why not?
10. Monitor your competitors
A professional eCommerce merchandising manager will be sure to keep an eye on the industry, competitors, and global giants, even though they are not from the same niche. Keeping fingers on the pulse raises awareness of trends and new technological advancements, allowing managers to become early adopters of revolutionary solutions before the competition does.
Using Software For Merchandise Management in eCommerce
There exist hundreds of approaches and solutions for eCommerce merchandising developed by thousands of successful online stores out there.
When it comes to online merchandising, the spectrum of features, tools, and know-how that can be applied to get a potential client interested, educate them on the product, and eventually convert, - is bottomless.
When considering Retail Website Development entrepreneurs need to take into account the latest trends, specifics of the brand, localized particulars of their user persona, multiple price points across the web, out-of-the-box merchandising software solutions and custom software development for online merchandising.
Why Choose A Custom eCommerce Merchandise Management Solution
While eCommerce shopping platforms allow users to put up a website in a few hours with a couple of dozen bucks per month in payments, more often than not, such software solutions are for beginners who trade in mass-market products.
The more premium your eCommerce brand is, or the more SKUs you get, the more likely it is that your business will want to invest in Custom eCommerce Development.
No wonder, as custom merchandising management features include:
- Uniqueness to your brand and alignment with your brand book, mission, and values
- A design and ambiance that is conspicuously yours, not a templated version
- Custom-made one-of-a kind functional features that set you aside and make your company a trend-setter in your niche
- Mixing and matching the features from several referential sites across the web that you and your team liked
- Full control of all the adjoining analytics & technical add-ons and plugins incorporated into the eCommerce platform
- A custom online merchandise management solution that can also be elaborated on and extended to service your brick and mortar stores with a retail merchandise management module.
- One-time payment for Retail Software Development, a perk that provides more control of your finances in the long run because a flat fee is paid once, as opposed to committing you to monthly payments
Why Zoolatech’s eCommerce Software Development Team?
Our boutique development company specializes in retail & eCommerce website and app development.
We know the pain points in the industry and how to facilitate site flow for optimal online shopping experiences and conversions.
Based in San Mateo, CA, USA, and operating a development office in Kyiv, Ukraine, our clients get the best of both worlds: the in-depth understanding of the commerce part of development and the reasonably-priced top technical talent to implement the vision.
If you are considering enhancing your merchandise management system on your website or in physical stores, or want to get a quote on custom online merchandising software development, drop us a line or call us. We’d love to provide a free consultation on how we would help you overcome your merchandising challenges.