What is digital merchandising? Best Practices for digital merchandising

January 4, 2023
Digital merchandising and Best Practices

The global retail market is expected to reach $30 trillion by 2025, and according to a report from Statista, eCommerce will account for 22% of that share. The trend is obvious, digital sales channels are on the rise and will continue to grow in popularity. 

What is Digital Merchandising?

Digital merchandising, also called online or eCommerce merchandising, is an umbrella term for all the processes of promoting and selling products online through digital channels such as search engines, websites, social media, apps, etc.

For consumers, online shopping is convenient – from the comfort of their homes, they can find and buy whatever they need or want with just a few clicks. But for businesses, there’s a lot more to it than that. To succeed, companies need to have a solid digital merchandising strategy. 

Marketing digital products is not much different than promoting and selling physical goods in a brick-and-mortar store. To be successful, you need to create a seamless and memorable experience for your customers.

The same principles apply – make it easy for customers to find what they are looking for and encourage them to buy.

The major difference is that it’s all happening online.

However, some key differences exist that businesses need to be aware of. 

For one, online space is much more competitive than offline. Millions of websites and digital products are vying for attention, so businesses need to be strategic about how they promote their products. 

Another key difference is that the customer journey is different online. In physical stores, customers can see and touch the products before purchasing. Online customers have to rely on product descriptions, customer reviews, and photos to decide. This means you need to take extra care in crafting product pages.

Advantages Of Digital Merchandising

There are several advantages to digital merchandising for both retailers and consumers. 

1. Easier to reach the target audience:

You can target your audience with tailored messages and content. This is much more effective than traditional marketing methods, which have a broad reach and often fail to target the right people.

2. Global access:

Digital merchandising allows you to reach a global audience. With the click of a button, you can sell to anyone, anywhere in the world.

3. More extensive product range:

Digital merchandising also allows businesses to sell a larger range of products than they could in a physical store. This is because things like space and inventory do not limit companies.

4. Minimal operational cost:

One of the biggest advantages of digital merchandising is its low operating cost. Unlike physical stores, there are no costs associated with things like inventory management, rent, or store operational costs. 

Now that we’ve gone over some of the advantages of digital merchandising let’s look at some best practices for businesses to follow.

Best practices for digital merchandising to boost sales and engagement

1. Leverage your homepage

your website is your most important online sales tool, and your homepage is the first page visitors will see when they come to your site, so it’s essential to make a good impression and give them a reason to stay and browse through.

Make sure it’s optimized for conversion – 

Your homepage is not just a website page. It tells your brand's story, sets the tone for the rest of the website, and it’s where you make the most prominent visual impression on potential customers.

2. Optimize your Search

You can't use a creative story layout like IKEA to guide your customers, but your eCommerce search can guide the customer’s journey. Your search algorithm is the digital version of a store layout and clerk in one! And it needs to be just as helpful. 

Some tips for optimizing your eCommerce search:

3. Implement time-tested sales strategies

Ultimately, you are in the sales business, so old-school sales methods will come into play. Here are some great strategies that work well online:

- Upsell & Cross-sell: Businesses have used upselling and cross-selling strategies long before the internet was even a thing. And there’s a good reason for that – they work.

Upselling is suggesting higher-priced items to customers who are already interested in what you have to offer. Cross-selling is suggesting related products or services to a customer who is already in the process of making a purchase. A great way to do this is at the checkout cart.

- Bundle Products: Bundling is another time-tested sales strategy that can be adapted for digital merchandising. It involves grouping products or services into a single package and selling them at a discounted price.

Don’t bundle together random products – make sure the products complement each other and that there is a logical reason for them to be bundled together.

- Promote Impulse Buying: Impulse buying is when a customer buys something immediately without any prior planning or thought. 

According to research, impulse buying accounts for 40% to 80% of purchases!

- Social proof: People trust each other and are more likely to buy something if they see other people have bought it and have a favorable impression. 

Social proof can be provided through customer reviews, testimonials, social media mentions, etc. 

This will go a long way in building trust between you and your customers.

Some tips for implementing the above sale strategies:

– Don’t be too pushy – no one likes to be selling, so try to strike a balance between being helpful and being pushy

– Make sure the products are relevant – don’t try to upsell or cross-sell products that are unrelated to what the customer is interested in

– Think about the customer journey – plan your sale strategies so that they make sense in the context of the customer’s journey

– Think about the customer – what do they need or want? What will help them achieve their goals?

– Test, test, test – try out different combinations of products and pricing to see what works best

4. Personalize for your customer

Personalization is essential for all businesses, but it’s especially important for businesses selling online. The reason is that you need to be able to tailor your digital merchandising strategy specifically to the needs and wants of your target audience. 

According to a recent report on personalization from Segment, nearly 50% of customers say they’ll become repeat customers after a personalized shopping experience. 

So, take the time to research your target audience and learn as much as you can about them. By understanding who your customer is and what they’re looking for, you can better tailor the products and offers you show them. 

Personalization is not only beneficial for customers, but it's also great for businesses too! According to research conducted by BCG, when customers experience a highly personalized shopping experience, they spend 40% more on an average order.

5. Make data-driven decisions to fuel growth

It’s become a cliche - but data really is the key to success. You can constantly adjust and improve your offerings by understanding what customers are looking for and how they interact with your site. 

Some examples of data-driven decision-making for digital merchandising:

6. Make selection simple

Ecommerce provides endless choices but also endless decisions to make. The paradox of choice is a theory suggesting that too many options can actually lead to paralysis and, as a result, customers will choose nothing at all. 

The goal of digital merchandising is to make the selection process easy for shoppers by doing things like curating products, providing filters and sorting options, and offering recommendations. 

Some ways you can help make your customer choice simple:

7. Provide round-the-clock support

Customers expect a high level of customer service and support, especially when shopping online. They want to know that if something goes wrong or they have a question, there’s someone available to help them. 

There are a few ways you can provide 24/7 customer support:

Wrapping Up 

If you’re not already using digital merchandising to promote and sell your products or services, now is the time to start. 

An effective digital merchandising strategy can help you save money while reaching more customers, building brand loyalty, and increasing sales.