In the days of brick and mortar stores, limited in-store space made merchandising an important function. When merchandising moved online, real estate was the least of anyone’s concern. However, retailers slowly began to understand that this is not the case.
Even though, theoretically, the online real-estate is unlimited, the useful real estate is limited by how far shoppers are willing to scroll down. And, shoppers don’t like scrolling.
Nielson found that shoppers spend 80% of their time “above the fold”; i.e., the space viewable by a shopper on one screen at a time, without having to scroll. Moreover, above-the-fold recommendations and promotions are 1.7 times more effective than those below the fold.
Therefore, merchandising effectively in this limited online real estate is critically important for successful online retailing.
Need for manual controls in merchandising
With the advent of artificial intelligence and machine learning, most ecommerce functions have been successfully automated. However, not all intelligent algorithms can replace real-world wisdom and insight. At least, not yet.
This is especially true for merchandising. Effective merchandising lies at the intersection of the following two goals:
Maximizing orders by showing products to shoppers they are most likely to buy
Effectively managing business requirements by upselling/cross-selling products
But most automated solutions can optimize only the first goal. For instance, liquidating surplus inventory might involve grouping certain items together to be sold for lesser price than when bought separately, or giving them as freebies and incentives, or selling them for discounted purchase. Making such decisions is just not an outcome of a number-driven formula (where automation excels). It requires the wisdom of someone who has extensive experience in the industry.
Business scenarios that require manual intervention
It is not uncommon for retailers to sign contracts with brands to promote them on their sites. Often, brand promotions are carried out via banner ads within the site at various places. This could be within the menu, on the homepage or category pages, or even right in the search box. Brand promotions could also be subtle: boosting, pinning, and slotting of certain brands to the top most positions for a relevant category or shopper query are also common. Manual intervention is an absolute necessity here in order to maximize the visibility and effectiveness of brand promotions.
Brand promotion in the Footwear category of a leading US ecommerce retailer
During events or holidays like Christmas, Valentine’s Day, etc., promoting certain products that are associated with such holidays generates more revenue. In order to maximize revenue, merchandisers need to select which products (or combos) to promote or cross-sell during a particular season. This decision can be complicated even further by other factors. For example, trending products for a particular season, say Spring, might differ from location to location. For instance, Minnesota might have a colder spring season than California. In this case, fabric type is an important factor to generate more sales. In such scenarios, automation tools are not as effective as merchandisers’ real-world insights.
Seasonal promotion merchandising for Spring
In fast-selling ecommerce sites, new products are added almost daily or, in some cases, even hourly. Newly added products do not have any historical performance data; therefore, they need the wisdom of a seasoned merchandiser to ensure maximum visibility.
Often, businesses are left with excess, old inventory they need to deal with. Merchandising for clearing the inventory involves discounted sales, special promotions and effective advertising. This requires manual decision-making by the merchandiser because clearance sales does not only equate to discounted price but also includes other decisions like zeroing in on combos, positioning, etc.
A leading US ecommerce retailer separately lists the clearance sale offers under the ‘Deals’ tab
Tools a good merchandising solution should provide
Merchandisers may run several campaigns at once, depending on the objective of the promotion. The system should allow merchandisers to create landing pages for various digital marketing campaigns without help from the IT team. For instance, a merchandiser may want to create a landing page for an email campaign promoting products from a certain brand.
Unbxd Merchandising Workbench: campaign creation for men’s shirts
This comes in particularly useful when merchandisers want to boost the visibility of a product or a set of products for a shopper query or a particular category. Boosting artificially increases the relevance ranking of products that satisfy the added rule and moves them up in the display order. Boosting is used in a variety of scenarios: for subtle promotion of brands, for increasing the visibility of new arrivals, etc.
Unbxd Merchandising Workbench: boosting white men’s shirts to the top
This is used when a merchandiser wants to pin a specific product to a specific position. For example, new arrivals do not have a popularity score. So, in order to increase their visibility, the merchandising solution should allow manual pinning of products to desired positions.
Unbxd Merchandising Workbench: pinning various items to different positions
Merchandisers use slotting to select various products in a specific category to position them in a consecutive range of slots based on a set of conditions. For example, slotting might be used to position inventory clearance at the top for garnering more visibility.
Unbxd Merchandising Workbench: slotting various products to a consecutive range of positions
Visual merchandising heavily relies on banners. Merchandisers should be able to create banners on the homepage, category pages, sub menus, autosuggestions box, shopping carts, and so on, where shoppers are more likely to view them.
Unbxd Merchandising Workbench: banner creation
These come in handy when a merchandiser wants to showcase a set of similar products to shoppers. For instance, during inventory clearance, the merchandiser may want to direct shoppers to a filtered set of similar products grouped by their discount percentage.
Unbxd Merchandising Workbench: filtering by color to display only white shirts for men
Use manual merchandising along with automation to maximize revenue
Balancing automated and manual merchandising is a blend of art and science, and it significantly varies from business to business. Automate the merchandising actions that you can to leverage the advantage machine learning algorithms offer, and use it in conjunction with manual merchandising that fits your business requirements.