Overview
Imagine stepping into a world where merchandising is a completely novel concept, especially within a company who thinks it’s about selling branded schwag. Our mission as a brand new ecommerce team is simple: to show how many tiny tweaks can lead to big wins in product sales. With careful prioritization and a dash of creativity, we were out to prove that merchandising can increase conversions, drive revenue, and delight customers.
Challenge
In 2021, I undertook the challenge of establishing a brand-new ecommerce team from scratch, recognizing merchandising as a pivotal element for the success of our digital sales channel. Not only was the concept entirely foreign to most within the company, but the function itself had never previously existed. While certain teams such as EDM (Enterprise Data Management), Marketing Communications, IT, and Product Management dabbled in various different aspects of merchandising, the absence of standardized business rules and governance led to many inconsistencies.
We found ourselves in a situation where we inherited thousands of incomplete or suboptimal product detail pages (PDPs) that had accumulated over five years and general complaints that navigating to PDPs was near impossible.
How do we educate fellow employees that the poor online shopping experience is due to lack of dedicated oversight while trying to instill and embed a job function so unfamiliar to the organization? We faced a need for a cultural shift.
Approach
Our initial step was to enlist the expertise of a seasoned Ecommerce Merchandising Specialist and we were very fortunate to find ourselves Elaina Mogren who helped lead the way in establishing the merchandising function. Concurrently, we collaborated with cross-functional teams already engaged in activities akin to merchandising, albeit perhaps unknowingly. We defined roles and responsibilities, which provided clarity and alignment across departments.
Recognizing the diverse learning preferences within our organization, we developed comprehensive educational materials in various formats to facilitate understanding and adoption. Additionally, we set key performance indicators (KPIs) to gauge the efficacy of our efforts, ensuring that we can demonstrate impact upon establishing this new function and role.
Solution
To tackle the challenge of establishing Merchandising in an unfamiliar landscape, we devised a comprehensive strategy, breaking it down into four key buckets: visual, product information, product discovery, and inventory management.
For the visual bucket, we conducted a thorough inventory of all existing visual placements, cataloging each one meticulously. This inventory served as the foundation for creating a comprehensive content calendar, a collaborative effort managed jointly by the marketing communications and ecommerce teams. This synchronized approach ensured alignment and cohesion across all visual elements, optimizing the user experience and driving engagement.
For product information, our focus centered on managing and defining product detail page (PDP) templates, enriching them with relevant content and optimizing technical and on-page SEO elements. Additionally, we introduced above-the-fold calls-to-action to facilitate bulk and test sample requests, enhancing user experience and driving conversions.
Within the realm of product discovery, we implemented various initiatives to enhance browsing and recommendations. Product badging was established to highlight top-selling and recommended products, while adaptive search and filters were optimized to streamline user navigation. Although plans for comparing products and bundling were deferred due to UX and functionality limitations, we were able to implement a Product Recommendations program where we could cross-referencing products on PDPs to encourage cross-selling and upselling opportunities.
Regarding inventory management, we deprioritized this bucket due to lacking necessary integrations within our ecommerce platform.
Merchandising's mission was to extract maximum business value by enriching the user experience and shortening the path to purchase. To track our progress and impact, we established key performance indicators (KPIs) including Average Order Value (AOV) to measure cross-selling and upselling effectiveness, organic sessions to monitor trends resulting from SEO activities, and revenue and items ordered to evaluate the impact of PDP optimization efforts.
Outcome
Through our concerted efforts, we witnessed remarkable enhancements across various metrics, indicative of the profound impact of our merchandising initiatives. The "add to cart" rate increased by 40%, reflecting heightened user engagement and intent. Furthermore, engaged sessions upticked by an astounding 137%, underscoring the effectiveness of our PDP copywriting, which was focused on describing "what's in the box".
Most notably, our revenue on average soared by a remarkable 196%, accompanied by a substantial 127% increase in the volume of items sold. These figures underscore the tangible impact on the bottom line due to our optimizing endeavors, further demonstrating the need for merchandising being necessary for a thriving ecommerce ecosystem.
Additionally, other merchandising efforts extended to refining the top 100 search terms to enhance discoverability and user experience. While the average order value remained steady, it's worth mentioning that our ability to optimize product detail pages (PDPs) is constrained by availability of resources as this exercise is entirely manual. Further to that we had no automations nor AI-generative features to streamline cross-selling and up-selling within PDPs. Nevertheless, these outcomes collectively signify a significant stride forward in establishing a robust merchandising framework, poised to drive sustained growth and customer satisfaction. Access to machine learning and predictive analytics powered by AI would be the next step for gains at a logarithmic scale.
Lessons Learned
- Distinguishing Merchandising from Product Marketing: Implementation of merchandising practices illuminated the nuanced difference between merchandising and product marketing. While both domains revolve around products, merchandising focuses primarily on driving sales and accelerating the path to purchase in the short term. In contrast, product marketing encompasses a broader scope, encompassing brand building, awareness, and credibility establishment across all stages of the customer journey. Understanding this distinction is pivotal for crafting holistic strategies tailored to specific objectives and timelines. For more insight, see my LinkedIn article, "Understanding the Nuances: Product Marketing vs. Merchandising in B2B Ecommerce"
- Data Accessibility and Advocating for Business Intelligence Support: Access to comprehensive ecommerce data was identified as a critical factor for robust analysis and informed decision-making. However, our initial efforts were hindered by limited access to essential data fields within our ecommerce platform. Advocacy for increased support from the Business Intelligence team became paramount, aiming to streamline the extraction of necessary data into the warehouse. This advocacy highlighted the importance of aligning cross-functional teams to ensure data accessibility, enabling our team to perform thorough analysis and derive actionable insights to drive effective merchandising strategies.
- Tech Stack and AI Integration: Our approach began with manual efforts to enrich product detail pages (PDPs), recognizing the pivotal role of merchandising for our digital sales channel. However, as we grappled with the challenges of scalability and efficiency, it became clear that AI integration was essential for effective scaling. With AI, we could have swiftly analyzed real-time ecommerce data to identify trends and patterns, such as which products typically sell well together. Despite our initial groundwork, the sheer volume of PDPs highlighted the need for AI to streamline processes and leverage real-time insights. Embracing AI underscored our realization of what was needed to take our merchandising processes to the next level, demonstrating our dedication to innovation in achieving digital sales success.