Ecommerce Merchandising 101: The Ultimate Condensed Playbook

14.1% of global retail sales were made online in 2019. Looking forward, this figure is only set to rise. By 2023, eMarketer predicts that the figure will climb to 22% of global retail sales.

The popularity of online shopping is simple. The idea that you can order a product for next-day delivery from the comfort of your couch is appealing to many. Especially if you can’t access a store or the product was out of stock when you went looking. 

With new ecommerce businesses appearing every day, online retailers need to stay competitive in order to attract customers. One important part of grabbing the customer’s attention is ecommerce merchandising.

In this article, we’ll talk about what ecommerce merchandising is, why it’s important, and ways every online business can improve it.

What is Ecommerce Merchandising?

If you shop online, you have made a purchase with an ecommerce store. That is, an online store that sells goods through a website. Ecommerce merchandising is all about how the business sells those goods to you. 

Branding, product placement, engaging images, thinking of innovative ways to display products; all of this is a part of ecommerce merchandising. The retailer’s ultimate goal is to get the customer to ‘add to cart’. Behavior of customers can be monitored throughout their journey. Through clever ecommerce merchandising strategies, customers are gently persuaded to make a purchase.

Although ecommerce stores have been in operation for a while now, it seems shopping in-store is still the preferred option (for now). 

So, why is this? Perhaps it’s because people like to get a sense of the product in real-life, to touch it and feel it before they make a purchase. It may also be because high shipping costs are off-putting when ordering from the other side of the world. In fact, 63% of shoppers will abandon their cart if shipping costs are too high. Companies have begun to combat such hurdles by offering free shipping and free returns. 

This is different when a company offers a service such as business VoIP systems. In this case, customers would request a product demo to try before they buy.

The Importance of Ecommerce Merchandising

Ecommerce merchandising is more important than ever thanks to increasing interest in online shopping. 

Displaying products in a simple yet aesthetically pleasing way has become quite the art form, and many websites experiment with ecommerce merchandising to capture the customer’s attention. 

This way of displaying products isn’t just about making the website look neat and accessible, it’s also important for converting site visitors into paying customers. With a CTA (call to action) strategically placed, reminders for abandoned shopping carts, and “order again” buttons, ecommerce merchandising can influence buying habits of consumers.

Ecommerce merchandising can:

• Entice customers.

• Help the business display a variety of products.

• Generate website traffic with SEO-geared listings.

• Promote certain products/special offers.

• Convert browsers into buyers.

4 Ways Ecommerce Merchandising Has Evolved

1. Introduction of artificial intelligence (AI).

AI technology has already disrupted many industries, from healthcare to law. As time goes on, it’s also started to play a big part in ecommerce. Websites have come a long way since the early days of the internet. They’ve grown to be much more user-friendly, especially when it comes to ecommerce. 

Artificial intelligence algorithms have helped to develop many features we know and use today, such as product recommendations, customer service requests, and augmented reality website experiences. 

When it comes to brick-and-mortar stores, employees are expected to provide all of these features. Sometimes if the store is busy or low-staffed, it can be difficult to keep customer service levels high. Online, you’ll never have this issue. 

2. Adapting to the user’s browser.

In marketing, you want to make the customer journey through the marketing funnel as smooth as possible. When customers are in-store, they’re greeted, asked if they need any help, and guided through the buying process. The same can be said for online merchandising. 

One of the biggest ways ecommerce merchandising has evolved is how it can now adapt to the user’s browser. As a society we’ve gone from browsing on desktop, to tablet, to mobile phones – and all are still in use. Just because we have advanced office telephone systems to video call and text, doesn’t mean we don’t still send emails or the occasional fax. 

This graph shows how people often browse sites, and which devices are used to make purchases:

Image source

So, it’s important that any ecommerce store is able to recognize how the customer is accessing the store to adjust the layout accordingly. The bounce rate may be high when usability is poor, and customers find it difficult to navigate through a site that was solely made for desktop browsing. 

3. Sophisticated inventory management.

As shopping online has risen in popularity over the years, inventory management has had to become more sophisticated. For larger businesses who also operate brick-and-mortar stores as well as online, stock may be shipped from the same warehouse. Therefore, it’s vital to keep an eye on what’s going where. This has forced inventory managers to optimize the way they work. 

In traditional retail, the business can only sell what it has in-store. So, adequate stock supplies are needed. Many businesses hire experts to forecast trends in localized areas, to see what items are more popular. It’s all about supply and demand. 

This is still similar to how online businesses, such as Amazon, operate. They need to work with manufacturers to produce enough stock so that the website isn’t constantly sold out. However, as they can hold stock in huge warehouses or even dropship from suppliers, ecommerce stores aren’t limited by physical location. To keep track of it all, they need to invest in smart inventory management software. This will let managers:

• Know when the stock is arriving.

• Communicate with suppliers. 

• Identify where products are being shipped to.

4. More personalization.

Another way in which ecommerce merchandising has evolved is personalizing the shopping experience. Previously, when ecommerce stores first started popping up, there were limitations in technology as far as tracking users, customizing pages, and creating adverts were concerned. Nowadays, you can see who’s visiting your site in just a few clicks, and get a better sense of your demographic and who to target in future with ecommerce marketing. 

Not only does this mean you can entice them with more personalized adverts to click through to the store, but it also means that the customer experience on the site is also personal. For instance, some users like to create a ‘saved’ list of items they like but aren’t ready to purchase yet. 

Others will leave things in their basket, also known as ‘abandoned cart’. These items are ready and waiting for when the user returns to the site. The site can also suggest products customers may like based on what they have already been browsing. 

Elements of Ecommerce Merchandising

There are three key elements of ecommerce merchandising. All of them are designed to capture and keep the customer’s attention. They are as follows:

1. Homepage merchandising.

Whenever a user first visits your site, whether they typed your URL into the search bar or clicked onto your homepage through a search page result, they will be greeted with your main homepage. It can be personalized depending on the country the user is visiting from, which can be useful so customers aren’t bothered with working out conversion rates. An ecommerce website homepage should include:

• Your company’s mission statement or goal.

• Images of popular products/services.

• A link to your ‘About Us’ section.

• An option for users to sign up and learn more about the business.

• Details of any promotional offers.

• Plenty of CTAs to encourage customers to make a purchase.

This is an example of Solo Stove’s homepage with an exclusive offer for customers front and center:

2. Product pages.

Product pages are pages created specifically for each product. They can be grouped under a category page to make searching easier for the customer. For instance, Skullcandy earphones under the ‘Headphones’ section. Product pages may also be landing pages. 

When a customer is looking for a particular item on Google, if your page is SEO optimized, it should appear in search engine results. Product pages should feature:

• Images of the product – ideally 360-degree view.

• A detailed product description.

• Product specifications.

• Product videos and demos.

• Cross selling of products.

• All product color options.

• Upselling of similar products.

• CTA such as ‘add to cart’.

3. Category-based merchandising.

Category-based merchandising is used to rank products within their category. It can also be useful when you sell products from only a few key categories. For example, this can include filters such as size, price, weight, latest in, and product ranges. 

It’s a great way to highlight any product lines you want to draw attention to, such as a range of new Larq self-cleaning water bottles in your ‘outdoor camping’ section. Category-based merchandising should include:

• Product images.

• A spotlight on the best-selling product from the category.

• Star ratings.

• Product comparisons on options available.

6 Strategies to Improve Ecommerce Merchandising

There’s a growing number of ecommerce sites popping up across the internet. They’re all looking to capitalize on the rise of online shopping. So, to stand out from the crowd it’s important that businesses continuously improve their ecommerce merchandising. Here are four strategies merchandisers can use to do just that:

1. Craft your homepage.

As previously discussed, your homepage is usually the first thing your customers see when they search for your brand. And, first impressions count. 

In order to make your homepage appealing, you should include large imagery, graphics, videos, and essentially any kind of media that is going to grab the customer’s attention. It should also be very easy to navigate. Consider the layout and work with designers who can create an engaging yet simple homepage, not forgetting that it needs to be accessible on any device. 

You should:

• Promote your highest converting products.

• Promote currently trending products.

• Include easy to access drop-down menus with categories.

• Promote highest-rated products.

• Enhance your site search bar functionality with predictive search.

Take Bliss, for example. They are a Face and Body Skincare company with a range of different products. Their website is built to showcase their products, including best-selling and new products. Featuring only four products at a time, with the option to right or left click to see more, this carousel of products is easy to view both on desktop and mobile. A smart merchandising tactic that lets customers view more products.

2. Group related products.

Searching for a specific product can be a little like finding a needle in a haystack if they aren’t separated into categories. Such separation is common practice for many retailers, and merchandising strategies like these have been used in-store too. 

You can create focused promotions on particular categories, and upsell to customers on product pages and at the checkout. It makes it easier for users to navigate their way through the site, just as they would in a physical store – heading to the aisle they think the product will be in. 

To improve ecommerce merchandising it’s a good idea to group related products. This can be done in the following ways:

• Brand.

• Product type.

• Color.

• Size.

• Style.

• Features.

• Product uses.

Just like in-store, sometimes categories can cross over. When this happens in a brick-and-mortar store, employees are available to guide customers to the right section. Online, customers rely on the search toolbar to find the right product. 

3. Cater to your brand with visuals.

Brand identity is all about your tone of voice and how you present yourself visually. Ecommerce merchandising is very much geared towards catching the customer’s attention as quickly as possible, and enticing them to learn more and stay on your site for longer. 

Therefore, it’s vital that businesses step up their homepage visuals. And visual merchandising is needed on all pages, for that matter – from the homepage to individual product pages. Some brands have experimented with 360-degree visuals and demonstration videos to showcase the product. Platform as a Service (PaaS) businesses, for example, may rely on these demos, because a physical product doesn’t exist.

Other brands are keen to link their website with their social media accounts. Not only does this improve SEO (search engine optimization) and rankings, but it can also give customers an even more in-depth look at the brand identity. 

This allows them to see what other customers think of your products. If the response and feedback is good, social proof psychology suggests they may also be inclined to make a purchase. 

You should:

• Use minimal text and maximum imagery on the homepage.

• Include demo videos.

• Link your social media feed on the homepage.

• Take high-quality product photos.

4. Use data in order to adapt to customers.

Data collection is one of the best ways to see who your customers truly are. There are many ways a business can collect valuable customer data. 

One is to monitor website traffic via a platform like Google Analytics. This will break down information such as customer location, how long they typically spend on your site, the average order value (AOV), and various other metrics. Although this information may not be available for each and every customer, regional data can still be very useful. 

This then allows businesses to cater to the customer’s needs. Such as promoting special offers to specific countries or creating adverts to re-target users if they leave the site without purchasing the contents of their cart.

You can also collect customer data through the website by getting customers to create an account or sign up to your newsletter. Another way to see data is to keep a call log of customers who contact customer service. 

More than this, data from the industry as a whole can help you narrow down what your target audience is interested in. This can help you cast a wider net when creating adverts to attract new customers. 

For instance, in recent years electric scooters have grown in popularity because they’re kind to the planet and easy to use. Sports retail stores need to become aware of trends like this in order to jump in and offer discounts and promotions to customers to stay competitive.

Some businesses choose to operate from a private cloud, meaning sensitive data doesn’t have to be shared with a third-party provider. The private cloud definition is that it’s only accessible to select users. If this is the case, then data may be difficult to access. Look for free open data sources where possible, or multi tenancy cloud options.

5. Offer personalized product recommendations. 

Let’s say a potential customer is browsing your ecommerce site looking for a hat. They find a hat they like and click on the product page which includes pictures and a product description. Below it, there’s an image slider showing similar products or other complementary products that will work well with the hat: Such as some matching gloves. They add those to their cart, too, and buy both the hat and gloves purely based on that product recommendation. 

Take this a step further to make it even more personalized by creating an ‘items we think you’ll love’ section on the website. This is all based on what the customer has previously clicked on or bought (if they are signed in). 

Email and SMS remarketing can also help with this, as you already have data on what your customers are most likely to purchase. You can then send emails and texts with the latest offers or newest items to entice them to your website once more. 

6. Ensure website navigation is smooth.

If a customer grows frustrated with the way your website is laid out, it’s likely they’ll click away within the first ten seconds. Now you’ve lost a customer and increased your bounce rate. So, look into ways to improve your website navigation so it’s as smooth as possible. 

Categorizing products is a key part of this. But also consider what else you may need on your website menu, such as your website blog and contact details. Be sure to double check every new feature you have on as many devices as possible. This ensures that customers can see the website as you intended, and don’t miss out on anything because of an awkward mobile layout.

Conclusion

Ecommerce merchandising is evolving each year. New techniques and merchandising strategies are emerging to draw customers in and encourage them to spend their money. 

One of the most valuable things to note about ecommerce merchandising is that it’s incredibly visual – and should appear the same on any device. Whenever you’re in the process of creating a new website or app, the brand imagery on both should be as identical as possible. Customers love consistency.  

So, now you have a better understanding of why ecommerce merchandising is important for every online business. You can go forward and implement new features to improve business processes and make your company stand out from the rest.