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Merchandising a website takes many forms and is often considered separate to conversion management, but they are in fact deeply integrated.

If you're selling a physical product which requires delivery then merchandising activities could evolve around the category, product, range, accessories and indeed delivery itself.

If you're merchandising a less-tangible product like a service or piece of software, you could merchandise a need, benefits, the service, related products as well as payment options.

Having been asked a few months back to create a presentation on basic merchandising tips I felt compelled to share them with fellow marketers.

Price, Place, Promotion, Product.

The tried and tested 'marketing mix' plays an important role in online merchandising. However, knowing what to do with this and how to translate this into an effective trade plan will differentiate your offering from your competitors.

Knowing how to complement this will help you stand out, and conversion management will provide the edge you need.

olive oil by Muffet, on Flickr

Before I start out, this isn’t intended to be a nitty gritty in-depth guide to online trading, but instead a view of merchandising and conversion management basics I’ve found useful over the years.

1. Perceptive propositioning

Between your product and marketing is the proposition. Selling ice to Eskimos is all well and good to prove you're a great salesperson, but in reality it'll not generate brand trust or when reality hits and they discover the product’s not right for them.

Getting the proposition right isn't as easy as it sounds. The first touch point is usually through marketing; online, in-store, TV, direct mail to name but a few channels.

Understanding that your online merchandising journey doesn’t necessarily start online, let alone start on your website, is a significant first step to getting the proposition right.

The message must carry itself consistently and clearly across the customer journey. And even then there are multiple messages being carried by your marketing yet one website to deliver this, not 10 sales assistants in your store.

Consider the selling of a hotel stay. Are you selling a place to sleep or an experience? Is it functional or aspirational? How does your website make the customer feel? How do they want to feel? Does this carry across your marketing message through to the website?

A low-cost budget hotel sells on price and functionality. The hotel room the customer buys into is the end goal. Conversely the high-end hotel is selling an experience. Sleeping in the room is only part of the experience.

The proposition in both cases is what you’re ultimately selling, not the product. It’s rarely as clear-cut as this though. Brands serve many types of customer and so getting the proposition right in the way you merchandise your products or services requires a deep understanding of your customer and product affinities.

Getting into the mindset of your customer will also help you get into the forefront of your customer’s mind.

2. Pricing and promoting effectively

Cornered a niche? Playing in a competitive field? High-end? Budget brand? No matter where you are, getting the price and promotion mix right is critical.

Consider a subscription site. If you overcharge, you may lose business to a competitor. Undercharge and you may have reduced your revenue potential, yet possibly claim more market share. Are you growing a long-term business or short-term profit?

This is as much about your business and trading objectives as much as the products and target consumers. If you’re a high margin retailer, then you may have more bandwidth with price and subsequently offer more price based promotions.

This certainly has its drawbacks, especially when you discount so often that customers refuse to pay full price knowing that if they hold out they’ll grab a bargain. If not, a competitor will jump in. Do you act first? Or wait for a competitor to gain the early advantage.

For a low margin product or business, reducing price becomes the last resort and promotions pivot around added extras. Loyalty schemes often drive repeat business through additional rewards for ongoing loyalty, deferring the hit on margin. Or perhaps you focus on high profile loss leaders, creating a perception of price competitiveness.

If you’re in a competitive niche, with a limited set of suppliers you’ll need a unique selling point to stand out or strong brand advocacy to attract and retain customers.

Another point of differentiation is effectively packaging your price. From experience in travel, this has certainly come out as a key concern for customers over the years in not knowing or understanding the full price of a product until they pull out their credit card.

Pricing effectively takes on many forms yet one of the most common, overlooked aspects for e-retailers is the final price. I won’t attempt to try and explore the nuances and annoyances of pricing and checkout abandonment - there's already much written about this.

The key finding I’d share from over the years is that no matter how good or bad your user experience, in a price sensitive economy, customers will more often than not persevere.

This is certainly not a good excuse to skip over a good online experience but optimising your site without getting these two P’s right may well leave you spinning your wheels. Get the other two P’s right in Product and Placement and you’re well on your way.

My tip would be to ensure you remain competitive within your market as much as decreasing attrition.

3. Context is king

courtesy of redjar, via FlickrHere’s the end goal of online trading: to sell the right product to the right customer at the right time at maximum profitability.

Merchandising within the right context is as much about the position within the conversion funnel. Taking a potential customer from prospect to customer to advocate is a key fundamental of conversion management.

Merchandising is concerned with getting the right message or product to the customer, presenting the product in the right way and at the right time.

Merchandising should pivot around the customer's needs, but can also be based on what the customer doesn’t think they need. They don’t need the latest touch screen gadget but they may like one, or may not even know they'd be interested until you show it to them.

Merchandising doesn’t directly concern itself with the user experience, yet this is the foundation of good merchandising. Matching a customer’s needs, whether apparent or not, to your product.

As digital marketers we realise consumers shop in many different ways. Some dive straight into a product, others will take a more general browse.

Merchandising context can take into account many aspects of the user journey. Here are a few examples:

  • First visit? Second?
  • Prospect? Existing customer?
  • Time of day – important if you’re targeting at-home mums during the day.
  • Demographics – this could include affluence or life-stage.
  • Geographic location – think of local targeting.
  • Source of visit - such as search engine, email, direct, landing page.

I’ve known businesses that employ a role to simply merchandise the company’s various homepages and nothing else, such is the importance placed on the 'shop window', or teams which literally update offers and prices throughout the day based on demand and availability.

Consumers are savvy creatures. I certainly am. I should be, after all, I know the tricks of the trade right? Yet I'm still duped into buying things online that I don’t need or didn’t intend to buy because it was surfaced at just the right time.

That’s clever contextual merchandising. And I love it.

4. Lubricate your path to purchase with a good user experience

A good user experience lubricates your purchase funnel, merchandising provides momentum and direction. This is where the lines of traditional merchandising and conversion rate optimisation can blend into an awesome user experience.

You could argue that Amazon doesn’t offer a great user experience yet it somehow drives phenomenal sales. I’d disagree. The experience is efficient. The one-click add-to-basket is addictively good as a consumer.

It’s actually far easier to purchase on Amazon than many of the leading e-commerce sites. Yes, there’s a lot of clutter and as a usability practitioner it goes against many recommendations, yet the impressive sales figures suggest otherwise.

Have you visited Jacob Nielsen’s web usability website? I’ve been an avid follower for over a decade yet the design has barely changed. His principles have endured. However, I'd argue Jacob is not trading his website.

If the user experience reduces friction, strong merchandising guides them through your site, motivating and inspiring customers. Many websites suffer from fragmentation when it comes to merchandising.

It is extremely difficult to fully merchandise and tailor a website for each consumer. But you can get pretty close. Which leads me onto the next point…

5. Choose the right tools, but moreover, the right people

The range of tools available for your website right now is quite mind-blowing thinking back a decade. Just take a look at this small, but useful list:

  • Automated merchandising. Let a mixture of automated rules and commercial input decide on which piece of content or product to surface based on various aspects of the user and their experience within your site.
  • Click to chat. Perhaps the next best thing to a sales assistance if used in the right way. It can provide the edge your website needs to improve your customer experience especially when your operators are trained to aid and close sales and not just field general queries.
  • Multivariate testing. I’m a huge advocate of testing. It’s so easy to test your site as long as you've got the right team creating those tests. I’ve been asked a number of times what happens when there’s nothing left to test. I’ve yet to encounter that scenario.
  • Online customer surveys. Not only will it provide candid insight into what your customers truly think of your site, you’ll learn so much more about how to improve your offering.
  • Real-time user tracking. Again another underused tool, is replaying user sessions. Find out what customers didn’t do, which is just as insightful as what they did.
  • Search and faceted navigation. A good search experience goes beyond the tool you’ve chosen, it’s also about the active management of your search experience. Customers expect to find what they want with your search box and narrow down their options. If not, you may well be losing 20% of your revenue.

    A small merchandising tip: look out for your search keywords that return zero results; you may well find new product ranges which customers think you stock that you don’t… perhaps you should?

  • Targeting and segmentation. The ability to split your traffic into pre-defined blocks of attributes and behaviour and target content to them comes close to offering a tailored web experience. Segmentation by definition groups clusters of customers and is not one to one but does provide an edge over spray and pray approaches to merchandising. For example, a simple male/female segment split based on logged-in users gives an instant merchandising opportunity to effectively double the merchandising space on your homepage.
  • User reviews and testimonials. Let your advocates sell your product for you. User reviews do a great job in surfacing low quality products that are not fit for purpose. If average reviews are constantly low, will you persist in selling it? Or feed back to your buying team to enhance it? Or push back on your supplier?
  • Videos, 360s and visual merchandising. With broadband speeds increasing over time, video and other bandwidth intensive media are becoming less of an issue for consumers and can add an extra dimension to your toolset. In-depth apparel zooms and detailed swatches have certainly provided consumers with a more realistic view of what they’re buying, coming closer than ever to physically having the product in front of you.
  • Web analytics. This still remains the central source of information for many businesses yet some of the examples above demonstrate that data sources are far more abundant. Is data the new oil? I certainly think it will last longer…

With so much access to data and insights, websites continue to struggle with conversion. Whilst you can debate the exact split, for me it falls back to the 80:20 rule of resourcing,  your emphasis should certainly be on hiring the right number and expertise of people to operate those tools.

I’ve lost count of the number of conversations I’ve had about companies struggling to create insight due to a lack of resource. It can be difficult to justify costs but if you’re trading a medium to large website you’ll soon hit barriers in keeping the user experience together; you can’t put a price on experience and knowledge to turn insights into revenue.

Finally I’ll end with what has been the theme for the past few years. The days of silos are in the past. Online and offline marketing is continuing to diverge.

If you run a bricks to clicks business, glean insights from your stores. If you run a sales call centre alongside your website, listen to calls, understand why they’re calling. Complement the experience across your channels and indeed devices.

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Published 10 November, 2011 by Depesh Mandalia

Depesh Mandalia is an Ecommerce, Marketing and CRO contributor to Econsultancy. Follow him on Twitter or LinkedIn.

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Comments (1)

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Marcus

Good article, good site, thx!

almost 4 years ago

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