Merchandising -  The Smart Way

What’s the purpose of online merchandising?
To recap, our definition of online merchandising is ‘the selection and presentation of products and content to make best use of screen real-estate’. For those of you coming from the offline world of merchandising it should be noted that we’re talking about a very different activity – old-world merchandising is about managing products, whereas online merchandising is primarily concerned with managing screen real-estate. Online screen real-estate is a limited resource, only a small fraction of your catalogue gets seen by any one visitor, so how this resource is managed is of
critical importance. 

Note: for convenience, throughout this article we use the term ‘merchandising’ as shorthand for online merchandising.
 

 

Intervening in the customer journey
Most customer journeys and page requests are handled automatically by a group of systems working together. This ecosystem usually comprises of the eCommerce platform, the search engine, a recommendations engine and sometimes a content management system.

As such, much (most) of the management of screen real-estate is automated, and much of the merchandiser’s success depends on how these systems are configured.
However, depending on the capabilities of each system, merchandisers are also able to intervene in parts of the customer journey and alter what the customer experiences, either by repositioning products or placing promotional content. How, and to what end (i.e. objective), the merchandiser intervenes in the customer journey affects not only the success of their intervention, but also the effectiveness of the automated systems that work alongside and around the intervention.


Types of intervention
The following three types of merchandising activity make up the bulk of an online merchandiser’s workload:

  • Improving product discovery
  • Promoting products
  • Promoting campaigns

These should be self-explanatory but to remove all traces of doubt here’s a quick review…

Improving product discovery
This relates to helping customers find what they’re already looking for, and usually entails tweaking product data and categories, or finessing the configuration of the search engine.

Promoting products
Rather than rely on exposure through serendipity, sometimes retailers want to push products into specific (much trafficked) locations to boost awareness, perhaps to promote a new product that is exclusive to them, or a product which has better margins.

Promoting campaigns
Similar to promoting products, retailers may have campaigns they want to make customers aware of. Such campaigns usually relate to a group of products (not just one), and often have accompanying collateral material, to either ‘set the scene’ or explain the offer (banners and the like).
As stated, these three activities make up the majority of a merchandiser’s workload, so it’s important that these tasks are executed efficiently and effectively, and done so in a way compatible with ‘making best use of screen real-estate’.

Are we busy fools?
We all want an easy life, but sometimes we’re our own worst enemy. Sometimes we confuse ‘doing work’ with ‘making progress’, or sometimes we continue to ‘do things the way we’ve always done them’ even when we know there’s a better, quicker or cheaper option.
When it comes to improving product discovery, or promoting products and campaigns, we don’t always do things the smart way. Here are just two observations:

OBSERVATION 1:
We treat the symptoms instead of the cause
When it comes to product discovery, the cause of most issues relates to product data. Either the data is wrong, missing, or insufficient in some way, which causes the product not to appear where it should. Most product data originates upstream from the online merchandising department, but rather than ask those responsible for data to change how they do things, we manually move products to where they should be, because we can. We take the path of least resistance. Or, sometimes, products don’t appear in search results because customers use synonyms for products which aren’t in their title or description. This time, this is not the fault of our data colleagues upstairs (they have to call a product something), but often we fix the issue by adding additional keywords to the product record which then get indexed by the search engine.

Stupid. Stupid. Stupid.

Why? Well, what happens when the product is replaced by a similar item the following season? Once again, the product won’t appear. As a consultant, I’ve lost count of how many times I’ve seen retailers ‘resolve’ this issue this way.
The smart thing to do would be to add the synonym to the search engine’s dictionary. This way all products – past, present and future – will be returned when customers search using the alternative name. ‘But we don’t have a search engine that supports synonyms’ I hear you cry. Well, get off that path of least resistance and petition your manager for a better search engine. You’ll be thankful in the long run.

 

OBSERVATION 2:
We use a sledge-hammer to crack a nut
When it comes to promoting products or campaigns, the impetus for doing so is rarely generated internally (from within the online merchandising team). The command usually comes from on high – online campaigns are usually part of bigger schemes devised by the marketing department, and category managers are usually the ones who demand that their products are promoted in some way.

And the online merchandiser’s response to such demands is to…what? Carefully consider where best to place the campaign or product to meet their colleague’s objectives whilst minimising disruption elsewhere? Or is it to place it where they know their colleague/boss will definitely see it? Perhaps on the homepage, or at the top of a category? Hmm.

As discussed in previous articles, merchandising is a zero-sum game. You can’t promote one thing without demoting another. Placing products and campaigns in highly trafficked areas of the site not only over exposes them far beyond the levels actually required, it can devastate the performance of other products. And it’s not the products immediately following the campaign that are affected, it’s those further down the page, or on subsequent pages, that get quietly pushed from view.

Work smarter, not harder
The three activities – improving product discovery, promoting products and promoting campaigns – are legitimate and necessary tasks, but there are smarter ways of working. Given that most customer journeys are handled in an automated way, by the search engine and the like, what we shouldn’t be doing as merchandisers is intervening in ways that a) just treats symptoms, or b) overrides the automated systems in a manner which harms their ability to optimise screen real-estate.

If we just treat symptoms, for example by adding keywords to product records rather than adding synonyms or adjusting the search engine’s configuration, we are condemning ourselves to forever repeat the same work over and over again. And as the catalogue grows so does the workload. This approach just doesn’t scale.

And if we place products and campaigns in high trafficked areas using rules whose trigger criteria is broad and isn’t linked back to, or moderated by, a business objective, then, for the duration of the campaign precious screen real-estate is probably being squandered – the campaigns don’t benefit from the additional exposure and the automated systems aren’t able to use the allocated screen real-estate to meet their objectives. Both parties lose.

In Greek mythology Sisyphus, a King of Corinth known for his deceitfulness, was condemned by Zeus to forever roll a boulder up a steep hill. Each time he neared the summit the boulder would roll back down and his task would start over. His punishment has become a metaphor for work that is pointless and endlessly frustrating.Much of the work we merchandisers do can seem as unfulfilling and unending as Sisyphus’ torment, but unlike Sisyphus we have a choice.There are alternatives ways of reaching our goals. 

A habit that’s hard to kick?
It’s no surprise that we tend to work in these inefficient ways. When search and merchandising systems first appeared they were better than what came before but they were blunt tools, and a generation of online merchandisers have been weened on them, intervening in customer journeys using the methods these first-generation systems allowed.
But we need to think differently. Selling online isn’t like physical retail. The space we have available to sell our wares is extraordinarily limited, more like a shop window than a store. But unlike shop windows, we don’t have to show the same things to the same customers. We can, and should be more mindful and discriminating in how we choose to intervene.
We have entered a new age of merchandising. Our understanding of the issues has grown, and the latest generation of tools aren’t shackled to the marketing practices of old.

We can work smarter, we just need to choose to do so.

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Merchandising Optimising Screen Real Estate

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