Fashion retailers using Google Ads conversion optimisation settings know just how powerful AI can be.

But can fashion retailers squeeze more out of AI on their own sites? We think they can.

Conversion optimisation – accelerating the way to sales

Retail experts in the fashion sector use conversion optimisation to smooth bumps in the road on the way to a sale or stated goal such as signing up to a store card. This is important as billions are spent annually getting fashion shoppers in-store and online.

This involves training staff to better identify customer needs and uncover opportunities to up-sell and cross sell, and merchandise bestsellers both in-store and online, all while tinkering with the UX on websites to see if a blue button leads to greater sales than a green button.

These are all manual tasks that have the blunt business objective of “selling more” and who doesn't want to sell more? But what about fine-tuning those business objectives? What about selling more profitable apparel, or moving stock that is piling up?

Optimising for business objectives

A fashion business’s objectives will change over a fairly short period of time: One day, a brand may be keen to run down stock of last season’s jeans. On another it might want to drive highly profitable sales by taking advantage of a catwalk trend or react to more or less money circulating in its customers’ pockets.

So, it’s important that there is flexibility when applying business objectives to fashion merchandising. What may work at Christmas may not work in the summer and similarly - in fact, what worked at 9am might be out of date by noon. Similarly, what may work for the UK may not work for the business in Spain. That’s why there can’t be one right business objective for all times and in all markets.

Rather business objectives should include the opportunity to maximise conversions, or revenue and/or maximise profit margin contribution. For example, if the business objective focuses on margin contribution, fully priced items will likely be shown higher in product lists than items on sale.

Swedish retailer NA-KD has been working to select the ideal product exposure strategy for each of their markets. They found that some markets respond better to strategies that maximise revenue, while others perform better when the site is optimised for profit or conversion. Crucially, when business imperatives demand it, they can switch between those strategies at the click of a mouse, which has increased NA-KD’s ability to capitalise on market opportunity.

Payday optimisation

It may also be the case that a retailer wants to steer towards different business objectives during different parts of the season or month. One of our clients, another Swedish fashion retailer, even changes its strategy in line with the payments of wages. It has found, perhaps unsurprisingly, that customers are more likely to buy expensive and full priced items just after they have been paid.

Conversely, these same customers are more likely to choose items on sale or lower priced items just before they get paid.

In order to make the most of this knowledge to the business, this retailer switches to a profit strategy on the main payday of the month. As soon as the profit strategy is enabled, goods on sale get lower exposure. About halfway through the month, the strategy is switched to revenue or, in some cases, to conversion.

Set business objectives, then let go

There are two schools of thought about how much manual intervention AI merchandising should allow the fashion retailer.

On the one hand there is a view that maximum flexibility should be given so that all aspects can be changed and adjusted according to the merchandiser’s whims, in which case why employ an AI merchandising solution at all?

The second ‘hard core’ school suggests the AI merchandising should be a ‘black box’ offering where the computer does everything, and you leave it alone and let it do its thing.

We should each play to our strengths. The merchandising team can set the goal and the computer can deliver on it - perfect!

This is the approach we have taken with eSales Fashion which is designed to provide you with intelligent merchandising that delights, guides and inspires fashion shoppers by showing the most relevant products in all areas of your digital shop.