The term Merchandising comes from retail and refers to activities that promote sales, especially by presenting and positioning products in the store. It includes setting up window and in-store displays, grouping related products together, shelf signage, and in-store ads featuring the merchandise to promote certain items and respond to customer demand.
This process is just as crucial in e-commerce stores, where the organization of products greatly affects revenue, the customer’s experience, and interaction with the brand.
There are many different approaches to merchandising in e-commerce, and the specific strategies and tactics used will depend on the nature of the products being sold and the target audience. Some common merchandising activities in e-commerce include:
- Product placement Choosing which products to place on the home or categories pages. A merchant can also design dedicated landing pages.
- Labels Using Labels to highlight some products by adding a sign on them like Sales or New, Best Seller, or Best Value. It is possible to have multiple labels assigned to a product, but you should put in some thoughts when doing this. Having too many labels on the same product may clutter the store interface and confuse visitors. Some combinations may not work well together, for example, New Collection & Sale. To guard against this, you need to define the maximum number of labels to show and make some of them exclusive.
- Product relations There are three types of merchandising relations: up-sell, cross-sell, and related products. Up-sell means offering a similar but more expensive product; cross-selling is used to offer complementary products or services, and related product relation is used to provide more choices.
- Bundling products together A bundle is a collection of products sold together. Offering multiple related products together with some potential discount increases the order value and generates additional revenue. In the catalog, a bundle is a particular type of product and has all characteristics of a product. It has its own product information (name, description, images, variants, and prices).
- Product Sets Another way to group several products together is a product set. A product set is a group of products that a merchant suggests buying together. The “Shop-the-Look” is a prominent example of this approach. The main difference between the product set and the bundle is that with a set, all products can also be bought independently, and the set itself does not have a price and is not defined as a product in the catalog.
Effective e-commerce merchandising can help to attract and retain customers, increase sales, and improve the overall performance of an online store.
Another important technique for digital merchandising is called Searchandising, which is to use the site’s search engine to promote products when users search for specific keywords or phrases. I will discuss it in a separate post.