Article

Winning the online retail war with merchandising

Online merchandising is still evolving, and many e-retailers are overlooking invaluable tactics.

July 28, 2014

By Marti Tedesco, senior director of corporate marketing at Baynote, and Lauren Freedman, President of the e-tailing group

The current era of innovation is bringing with it great challenges for retailers. Innovations that make life more convenient and rich for omnichannel consumers are simultaneously creating huge hurdles for merchants.

Consumers today have more options, information, and research tools than ever before. As a result, shoppers are highly educated, price sensitive and difficult to impress. Retailers can no longer distinguish themselves on price or availability alone. Given the prominence of Amazon and rampant marketplace growth, customers expect low prices and immediate availability. These former differentiators are now core requirements for any retailer to survive.

Mobile commerce has amplified these challenges. Shoppers now use smartphones to perform research and make purchases whenever and wherever they want. As a result, retailers are spending big on mobile: A recent study by the e-tailing group (108 participating retailers) found that 42 percent of retailers have made “significant” investments in mobile optimization. To further quantify this trend, 24 percent plan to spend over $200,000 on mobile initiatives in 2014 alone.

Given the significant expense required to keep up with rapid technological change, the retail battle is now won and lost along the thinnest of margins. E-retailers must come up with innovative, cost-effective strategies to win customers and compete with the Amazons of the world. So what are these strategies?

Whether online or in-store, retail is all about merchandising. If you have walked into a Nordstrom lately, you know that in-store merchandising has been refined to perfection. But online merchandising is still evolving and many e-retailers are overlooking invaluable tactics. By implementing these strategies, your company can set itself apart from the herd.

Simulate the in-store experience: superior search and visibility

Online retailers should assess their search capabilities just as stores carefully plan their product displays. Years of study have gone into product placement on store shelves, which can make or break an item’s sales. On-site search is similar. When optimized, on-site search makes items more findable and has a positive impact on conversion rate and average order size. The number one reason people shop online is to save time.

The 14th Annual e-tailing group Merchant Survey found that online retailers rank a host of search capabilities among the most important tools for improving ROI. Keyword search, merchandised search landing pages, advanced search and type ahead/visual search were all deemed somewhat or very important by a majority of retailers. Additionally, 83 percent of online retailers believe that “making it easier to find products with enhanced onsite search relevance and sort options” is one of the most important merchandising retention tactics.

Be easy on the eyes

Just as store design and layout is key to any brick-and-mortar shop, you want your online store to be visually appealing and easily navigable. In fact, 85 percent of retailers ranked “site redesign or enhancements that improve the customer experience and navigation” among the most important merchandising retention tactics of 2014. Retailers felt similarly excited about hosting creative landing pages filled with rich media. Even something as simple as on-model photography was tabbed by 70 percent of retailers as very or somewhat important from an ROI perspective, likely due to its ability to give customers the confidence to convert.

These tactics translate to individual items as well. Customers love the in-store experience because it allows them to manipulate goods as they see fit, investigating every angle and every nook and cranny. Online retailers are wise to offer customers the same possibilities. The e-tailing group study found that capabilities that augment product visuals aid consumer confidence and see strong performance. Some of the most popular options include alternate views, zoom, color change, and video. You can also go a step further and offer categorized content like tips, checklists, and how-to guides or interactive tools like virtual models and configurators. This type of attention to detail can give your site a unique, personal touch, setting it apart from the impersonal “one-click ordering” sites.

Make the most of mobile

As retailers continue to invest heavily in the mobile shopping experience, keep in mind some key factors to get ahead of the competition. First and foremost, have an online presence that is optimized for mobile, not just a converted version of your standard site. Today’s consumers are mobile-savvy and know the difference right away.

Keep the mobile consumer in mind all the way through checkout. Even after thumbing through your site and tapping to add products to their cart, many consumers are loath to enter credit card information via mobile. There is no faster path to cart abandonment than subjecting shoppers to the mobile payment process. Thus, it is no surprise that 85 percent of retailers found alternative payment options like PayPal or BillMeLater as very valuable.

Finally, remember that mobile customers are often willing to interact with your brand in other ways. Webrooming, the act of searching online and then buying in store, is now more prevalent than showrooming. In today’s omnichannel environment, you can leverage mobile to enhance a shopper’s experience across all touch points. For instance, allow customers to locate your brick-and-mortar locations via mobile and, once in the door, to locate products, check prices, and find ratings and reviews. These functions enhance consumer confidence, drive conversions and ultimately loyalty.

While the world of online and mobile retail grows increasingly chaotic, retailers don’t need to get caught in the whirlwind. By applying some of the same merchandising tactics online as you would in store, you can provide an experience worthy of a repeat visit and a long lasting relationship.

(Photo by Paul Inkles.)