The task of manually merchandising an eCommerce site for optimum ROI is at best overwhelming and at worst impossible. The fact is, in the eCommerce world the online merchandisers’ role is almost entirely data driven.
Their tools are databases, spreadsheets and analytics software, and added to that the volume of data collected through interactions with a website.
Problems with rules-based merchandising
There are many eCommerce search and merchandising solutions that claim to employ AI, but many systems described as AI are, in fact, rules-based. They require the merchandising team to set up triggers based on criteria defined by poring over spreadsheets and other data sources.
The main issue with most merchandiser-created rules is that the trigger criteria is too broad, targeting too many customer journeys. Besides, rules can conflict, they are not truly scalable, they do not react in real time and creating them requires a lot of manual effort – back to square one.
What’s more, many systems deal with just one part of a site: search, or recommendations, or ads, or navigation. This means retailers have a non-unified site employing several different systems, which can lead to cannibalisation effects that reduce sales. For example, a shopper finds an item they want through the search or navigation but are then recommended to buy a lower-margin alternative.
Why AI based merchandising?
A sophisticated AI solution is self-learning, self-operating, consistent, accurate, scalable and efficient. It will run across all aspects of the site, learning and applying that knowledge to all facets. In fact, as data accumulates it just gets better and better.
This kind of solution should enable retailers to hand over the heavy lifting of merchandising to computers, to put the right product in the right place at the right time, leaving them to set their overarching goals. The question is: can they let go and is it a leap of faith?
Man vs Machine – the results
One online store that did let go is leading Nordic beauty retailer KICKS. But it was no leap of faith. It A/B tested merchandisers versus AI.
On the one hand, merchandisers used their experience and knowledge to manually produce a home page. This page was pitched against an automated page delivered by Apptus eSales using AI and machine learning.
The results were striking. The automated version received an eight times higher click-through rate than the manual version, eight times more add to baskets and where the manual version made one actual purchase, the automated version succeeded in completing 101 sales transactions.
According to Jenny Vesterlund at KICKS: "It was not long before the results unambiguously spoke for the Apptus eSales version, we saw a strong increase in all indicators: click through rate, percentage added to the shopping cart, number of purchases, conversion rate and average order value".
As in other business areas, AI in online merchandising really can make a difference compared to a manual approach, and a quite amazing difference too. As KICKS discovered, there’s no need to take a leap of faith, just a step forward in the right direction.
Contact us today to learn what AI can bring for your business!