Merchandising 101: Six Ways To Boost Revenue

“The person who follows the crowd will usually go no further than the crowd. The person who walks alone is likely to find himself in places no one has ever seen before.” – Albert Einstein

An intelligent person once said that embracing our differences was integral to personal fulfilment and success: let’s put this into context

 

 

E-commerce sales have increased consistently over the past twenty years, yet it has since witnessed a further trajectory in sales/demand following the coronavirus pandemic. 

Take a look at the increase of digital purchasing power over the past six years (courtesy of Adobe’s 2020 Digital Economy Index): 

 

E-commerce rise in sales 2014-2020

Source: Adobe Digital Insights

 

When it comes to e-commerce, we as consumers arrive at a website with particular motivations, and although we may have something in mind, our human impulses, more often than not, tell us otherwise. 

Personalization has made a significant impact on the way we shop.

Through the integration of complex AI, more personable shopping experiences are created through product recommendation, email marketing as well as the collation of customer data (analytics).

Why?

Because improving customer experience drives sales.

 

What Is It? Understanding E-commerce Merchandising

A unique tool that allows companies to carry out targeted campaigns to their customer base. 

The ability to isolate/boost specific products holds multiple advantages for an e-commerce provider.

Additional merchandising functions include:

  • Promoting specific brands/products (boosting vendors)
  • Prioritising high-margin items
  • Optimizing stock management
  • Bundle matching products. 

Pretty straight forward won’t you agree?

 

1. Pre-empting Marketing Campaigns

Although there can be anomalies in a product's rise in popularity, usually, themes persist. These include:

  • An upcoming television/online advertisement campaign for a particular brand
  • Change in the seasons: appropriate attire for the weather being an example
  • A public figure promoting a particular product or service
  • Social media trends/virality.

Identifying such trends and generating awareness of upcoming brand campaigns is an effective way to pre-empt such changes in brand/product popularity.

 

Tailored product suggestions

 

This example is from Executive Shaving.

By adding unique triggers through their back-end, they have prioritised certain products to cater for the increase in demand of hand soap.

Personal hygiene products have sky-rocketed in sales due to Covid-19, so enhancing the visibility of such products helps to drive sales. 

2. Prioritising Vendors

Yes, these functions boost conversions, but there are additional uses for this unique tool that help to generate additional revenue. 

Like a madame celebrating her sweet 16th, brands (big & small) want to be noticed. 

Let e-commerce platforms be the osmosis. 

Brands will pay YOU to up-sell their products to visitors of your platform. 

Let's say amongst the many other products available on your e-commerce, you happen to be selling a line of perfumes. 

From Armani to Dior, Yves Saint Laurent to your own collection; visitors will be searching for the right scent in accordance to their preferences. 

Before boosting your own products, Calvin Klein contacts you with a request.

They will pay big bucks for the privilege of prioritization. Take a look at the example below: 

 

Prioritizing specific vendors/brands

 

With the merchandising tool, you have the capacity to make brands more visible on your platform, and these brands will pay you for it: easy money

3. Boosting Higher Margin Products

What is your e-commerce? 

A recent study conducted by Vend highlights the industries with the highest marginal profits: 

 

Highest marginal profits by industry

Source: VendHQ

 

Prioritising products that offer higher returns is a marketing tact embedded in the very core of our make-up.

As reported by the Wall Street Journal, Amazon had taken the initiative already back in 2019, modifying their algorithms to boost higher margin products as opposed to the promotion of bestselling items.

So if the big players are doing it, why shouldn’t you?

 

Gross retail margin percentage

Source: Vendhq

4. Optimizing Stock Management

How’s your stock management?

One of the many challenges retailers face (both in-store and online) is the management of stock. Ensuring products are selling organically is no easy feat and different strategies to generate consistency should be implemented to best control this.

To counteract disparities in product sales, merchandising strategies can be implemented to help prioritize low selling products.

Conversely, high selling items can also be optimized. This would be carried out when a supplier has a considerable volume of stock that will cater for the demand of popular products, (sale items can also be prioritised).

 

Consumer loyalty percentageSource: SymphonyIRIGroup

 

Personalization platforms such as Clerk.io offer sophisticated sales data so companies can establish which products are selling more than others.

From this information, companies can enhance visibility of certain items to best manage their SKU (Stock Keeping Units)

5. Bundle Matching Items

Applying sophisticated filters to generate relevant and applicable bundles is another effective approach to generating online sales. 

Bundle items don’t alone serve as a tool to increase revenue, but they also work as a mechanism to help generate an increased understanding of the products that are available to your customers. 

Although they may not immediately act upon the purchase of recommended products, their understanding that such items exist and are available on your website means they can return at a later date with such knowledge in mind

Bundle relevant items to up sell products

As you can see, the suggestion is relative to the original item and they incentivize the customer to buy through emphasizing how the overall price will be less if items are purchased in conjunction. 

6. Matching Products Through Specific Criteria

A popular tool that helps to coordinate marketing campaigns can be implemented by setting various criteria in alignment with your internal business goals

Want to push sale items?

In need of up-selling rucksacks that are soon to be part of last season’s catalog? 

This promotional tool will allow you to do just that.

Products can be grouped in reference to various criteria from size, color, and much more. This allows the retailer to promote their products in alignment with particular preferences.

 

Products marketed by specific criteria

 

As you can see from the example above, Garnius have used three separate criteria to promote their yarn. 

Firstly, they have specified sale items in their promotion, as you can see the reduction in price (in percentage) is displayed above each product. 

Secondly, the page is dedicated to knitting yarn that is the same length.  

Finally, they have advertised products that are a variation of the same color.

The ability to adjust various criteria not only promotes a more inclusive and personable shopping experience for your customer, but it is also an effective tool to prioritize the sale of products that may be high in stock, out of season or be the last remaining few, thus becoming a priority to up-sell.

 

 

Want to find out more about how the merchandising tool can generate further income for your e-commerce business? Hit the link above to talk to a specialist now. 🚀

 

Key Takeaways:

 

  1. There are multiple ways to increase conversion rates through e-commerce merchandising strategies. When such strategies are used in conjunction with one another, the probability of increasing sales and overall conversion rates exists.
  2. Trial and error: experimenting with the merchandising strategies discussed in this article will undoubtedly improve your overall sales, yet, it is vital that different approaches are taken to help identify the most effective techniques.
  3. All of the examples displayed in this article have come from companies that use Clerk.io, the #1 personalization platform in the world. If you want to find out how Clerk can help drive your e-commerce sales, head over to their website to book a free consultation.