Whether you're a seasoned ecommerce pro looking to refine your approach or a newcomer trying to make sense of the digital marketplace, this guide will walk you through the essentials of creating a winning ecommerce merchandising strategy. From understanding your audience to leveraging the latest in AI technology, we'll cover everything you need to know to turn casual browsers into loyal customers. If you’re new to ecommerce merchandising, we did a deep dive into the field here.

Laying the foundation for your strategy

Assessing your current ecommerce setup

Before you dive into creating a new merchandising strategy, take a good look at what you're already doing. How's your website performing? Are customers finding what they need? Which products are selling well, and which ones are gathering digital dust? This isn't about beating yourself up over what's not working. It's about getting a clear picture of where you're starting from so you can make smart improvements.

Don't forget to also assess your competitors. What are they doing well? Where do you think you could do better? This competitive analysis can help you identify opportunities to differentiate your brand and improve your merchandising approach.

Identifying your unique selling proposition (USP)

What makes your online store special? Maybe you offer handmade products, unbeatable prices, or lightning-fast shipping. Whatever it is, that's your USP, and it should be at the heart of your merchandising strategy. Your USP is what sets you apart from the competition, so make sure it shines through in how you present your products. It should be clear from the moment a customer lands on your site, guiding everything from your product selection to your site design and copy.

Aligning merchandising with your brand identity

Your merchandising should feel like a natural extension of your brand. If you're selling eco-friendly products, your website should reflect that with earthy tones and nature-inspired imagery. Selling luxury items? Your site should ooze elegance and exclusivity. The goal is consistency - from your product descriptions to your checkout process, everything should reinforce your brand identity.

Defining your target audience

Creating detailed buyer personas

Imagine you're describing your ideal customer to a friend. What do they like? How old are they? What problems are they trying to solve? These detailed descriptions are your buyer personas, and they're incredibly useful for shaping your merchandising strategy. The more you know about your target customers, the better you can cater to their needs and preferences.

Start by looking at your existing customer data. Who's buying from you now? What are their characteristics? Then, go deeper. What are their pain points? What motivates them to make a purchase? What kind of content do they engage with? You might even consider conducting surveys or interviews with your best customers to get more detailed insights. The goal is to create a vivid picture of your ideal customer, so you can tailor your merchandising efforts to speak directly to them.

Segmenting your customer base

Not all your customers are the same, and that's okay. In fact, it's an opportunity. By dividing your customers into groups based on shared characteristics - like age, shopping habits, or interests - you can create more targeted merchandising strategies. This might mean showcasing different products to different customer segments or tailoring your messaging to appeal to specific groups.

Tailoring your merchandising approach to different segments

Once you've identified your customer segments, it's time to get personal. For your budget-conscious shoppers, you might highlight your best deals and value packs. For your trend-setters, you could create a section featuring the latest arrivals. The goal is to make each customer feel like your store was designed just for them. This tailored approach can extend to all aspects of your merchandising strategy. You might use different language or imagery when marketing to different segments. You could create specific landing pages or product bundles targeted at particular groups. Even your product recommendations can be tailored based on segment preferences. The more relevant and personalized your merchandising, the more likely customers are to engage and make a purchase. It's about creating a shopping experience that resonates with each segment's unique needs and preferences.

Understanding your customer journey

Mapping the ecommerce customer journey

Think of the customer journey as a road trip. Where do customers start? What route do they take through your store? Where might they get lost or decide to turn back? Mapping out this journey helps you understand the twists and turns customers take from first click to final purchase. It's not always a straight line, and that's important to remember when planning your merchandising strategy. Start by identifying all the potential touchpoints a customer might have with your brand - from seeing an ad on social media to reading product reviews to making a purchase. Then, think about what the customer is doing, thinking, and feeling at each stage. Understanding these moments can help you identify opportunities to improve your merchandising and guide customers towards a purchase.

Identifying key touchpoints for merchandising

As customers travel through your online store, they'll encounter various touchpoints - places where they interact with your brand. This could be your homepage, product pages, search results, or even your shopping cart. Each of these touchpoints is a chance to influence the customer's decision with smart merchandising. Maybe you showcase related products on the product page or offer a last-minute deal at checkout.

Optimizing the path to purchase

Once you understand the customer journey, you can start smoothing out any bumps in the road. Is your search function helping customers find what they need? Are your product categories logical and easy to navigate? The easier you make it for customers to find and buy products, the more likely they are to complete their purchase. Remember, every extra click or moment of confusion is a chance for the customer to change their mind. Look for ways to streamline the journey from product discovery to checkout. This might involve improving your site's search functionality, simplifying your navigation menu, or reducing the number of steps in your checkout process. The goal is to create a smooth, intuitive shopping experience that guides customers effortlessly from browsing to buying.

Telling a story

Crafting compelling product narratives

Every product has a story to tell. Maybe it's about the problem it solves, the way it's made, or the experience it provides. Your job is to tell that story in a way that resonates with your customers. Instead of just listing features, paint a picture of how the product fits into the customer's life. For example, don't just say a coat is warm - describe how cozy it'll keep them on chilly autumn walks.

Using visual storytelling in your ecommerce store

They say a picture is worth a thousand words, and that's especially true in ecommerce. High-quality product photos are a must, but don't stop there. Visual storytelling can take many forms. You might create an Instagram-style gallery showing customers using your products in real life. Or you could use infographics to explain complex features in a simple, visual way. Don't underestimate the power of user-generated content - photos and videos from real customers can be incredibly persuasive. In the absence of being able to touch and feel products, your visuals need to work extra hard to bring your products to life.

Implementing consistent brand messaging across channels

Your brand story shouldn't change whether a customer is on your website, reading your email newsletter, or scrolling through your social media. Consistent messaging helps build trust and reinforces your brand identity. This doesn't mean you have to say the exact same thing everywhere - it's about maintaining a consistent tone and values across all your channels.

Analyzing your product catalog

Conducting a comprehensive product audit

Time for a good old-fashioned stock take. But we're not just counting inventory here. We're looking at which products are selling well, which ones are underperforming, and why. Are there products that always sell out quickly? Are there some that customers often return? This audit will give you valuable insights to inform your merchandising decisions. Start by gathering data on all your products - sales figures, profit margins, customer reviews, return rates, and so on. Look for patterns. Consider factors like seasonality or trends that might be influencing your sales data. This audit isn't just about identifying what's working and what's not - it's about understanding why, so you can make informed decisions about your product range and how you present it.

Identifying top performers and underperformers

Every product catalog has its stars and its strugglers. Your top performers are the products that fly off the digital shelves - these are the ones you want to showcase. But don't ignore the underperformers. Try to understand why they're not selling. Is it the price? The presentation? Or are they just not meeting customer needs? This information can help you decide whether to promote these products differently, discount them, or perhaps discontinue them.

Strategies for effective product grouping and categorization

How you organize your products can make a big difference to the customer experience. Think about how customers shop and what makes sense to them. For a clothing store, organizing by type (shirts, pants, dresses) might work well. But you might also want to create categories based on occasion (workwear, party outfits) or season. The objective is to make it easy for customers to find what they're looking for - and to discover products they didn't even know they wanted.

Making it easy to find products

Optimizing site search functionality

A good search function is like a helpful sales assistant - it should understand what the customer is looking for, even if they don't use the exact right words. Invest in a robust search tool that can handle misspellings, synonyms, and even predict what the customer might be looking for based on popular searches. And don't forget to analyze your search data - it can tell you a lot about what your customers want. Consider implementing features like autocomplete or search suggestions to help guide customers. Make sure your search results page is well-organized and easy to filter. Many customers will head straight for the search bar when they visit your site, so making this function as helpful as possible can significantly improve their shopping experience and increase the likelihood of a purchase.

Implementing intuitive navigation and filtering

Your site navigation should be clear and logical. Think about how you can guide customers through your product catalog in a way that makes sense. Filters are your friend here - they let customers narrow down their options based on what's important to them, whether that's size, color, price, or any other relevant factor. The easier you make it for customers to find what they want, the more likely they are to make a purchase.

Leveraging AI for personalized product recommendations

Here's where things get really exciting. AI can analyze a customer's browsing and purchase history to suggest products they're likely to be interested in. It's like having a personal shopper for each of your customers. These personalized recommendations can appear on the homepage, product pages, or even in follow-up emails. When done well, it can significantly boost your average order value and customer satisfaction. Keep in mind that the goal of these recommendations is not just to increase sales, but to genuinely help customers discover products they'll love. The more relevant and helpful your recommendations, the more customers will trust and value them.

Generating excitement

Implementing dynamic pricing strategies

Dynamic pricing means adjusting your prices based on various factors like demand, time of day, or even individual customer behavior. It's a complex strategy, but when done right, it can help you maximize your profits while still offering competitive prices. For example, you might offer a small discount to a customer who's been browsing the same product for a while, or slightly increase the price of an item that's in high demand.

Showcasing new arrivals and trending products

People are naturally curious about what's new and what's popular. By highlighting your latest products and bestsellers, you tap into this curiosity and create a sense of excitement. Consider having a "New Arrivals" section on your homepage, or a "Trending Now" carousel that updates regularly. This not only showcases your products but also gives returning customers a reason to keep checking back. When featuring new arrivals, consider creating a sense of exclusivity. You might offer a "first look" to newsletter subscribers or social media followers. For trending products, you could show real-time popularity indicators, like how many people have viewed or purchased an item in the last 24 hours. This social proof can be a powerful motivator for purchases. Use these featured products not just as standalone attractions, but as gateways to explore more of what your store has to offer.

Setting clear merchandising goals

Defining Key Performance Indicators (KPIs)

You can't improve what you don't measure. That's where KPIs come in. These are the metrics that will tell you whether your merchandising efforts are paying off. Some important ecommerce KPIs include conversion rate, average order value, cart abandonment rate, and revenue per visitor. Choose KPIs that align with your overall business goals and give you actionable insights. 

It's not just about tracking these metrics, but understanding what they mean for your business. A low average order value might indicate you need to improve your cross-selling strategies, while a high cart abandonment rate might suggest issues with your checkout process. Regularly reviewing these KPIs can help you identify areas for improvement and track the impact of your merchandising efforts over time.

We’ve outlined digital merchandising tactics that can help you improve conversion rates; you can find them here.

Setting SMART goals for your ecommerce merchandising

SMART goals are Specific, Measurable, Achievable, Relevant, and Time-bound. Instead of a vague goal like "increase sales," a SMART goal might be "increase the conversion rate for first-time visitors by 10% over the next quarter." These clear, concrete goals give you something specific to work towards and make it easier to track your progress.

Set both short-term and long-term goals. Short-term goals can help you stay motivated and make incremental improvements, while long-term goals keep you focused on the bigger picture. And prioritize celebrating when you achieve your goals - it's important to recognize progress and keep your team motivated.

Aligning merchandising objectives with overall business goals

Your merchandising strategy doesn't exist in a vacuum - it should support your broader business objectives. If your company's goal is to expand into a new market, your merchandising strategy might focus on showcasing products that appeal to that market. If you're aiming to increase customer loyalty, you might focus on personalized recommendations and exclusive offers for repeat customers. Ensure that every merchandising decision is moving you towards your larger business goals.

Measuring and optimizing your merchandising strategy

Essential analytics tools for ecommerce merchandising

Data is your best friend when it comes to optimizing your merchandising strategy. Tools like Google Analytics can give you valuable insights into how customers are interacting with your site. Heat mapping tools show you where customers are clicking (or not clicking) on your pages. And your ecommerce platform likely has built-in analytics that can tell you which products are selling best and which marketing campaigns are driving the most sales. Regularly review this data and use it to inform your decisions.

A/B testing your merchandising tactics

A/B testing is a powerful way to refine your merchandising strategy. This involves creating two versions of something (like a product page layout or an email subject line) and seeing which one performs better. Maybe you want to test whether showing customer reviews increases sales, or whether a "Buy Now" button works better than "Add to Cart." By systematically testing different elements, you can continually improve your merchandising based on hard data rather than guesswork. Doing so continuously allows you to keep refining your strategy and stay ahead of changing customer preferences. Create a balance of testing both big changes (like a complete redesign of your product pages) and small tweaks (like changing the color of a call-to-action button). Sometimes, it's the small changes that can have a surprisingly big impact.

Continuous improvement: Iterating based on data insights

The world of ecommerce moves fast, and your merchandising strategy needs to keep up. Use the data from your analytics and A/B tests to continually refine your approach. Maybe you notice that customers who use your site search function are more likely to make a purchase - in that case, you might focus on making your search more prominent. Or perhaps you see that certain product categories have a high cart abandonment rate - that's a sign you might need to adjust your pricing or improve your product descriptions in those areas. You should stay flexible and always look for ways to improve.

Conclusion: Final tips for implementing your merchandising strategy

Creating an effective ecommerce merchandising strategy is a journey, not a destination. It's about constantly learning, adapting, and improving. You must keep your customer at the center of everything you do. Make it easy for them to find what they're looking for, tell compelling stories about your products, and create an enjoyable shopping experience. Use data to inform your decisions, but also incorporate the human element - at the end of the day, you're selling to real people with real needs and desires.

Don't be afraid to get creative and try new things. The beauty of ecommerce is that you can quickly test and iterate. What works for one online store might not work for another, so it's important to find your own path. And most importantly, be patient. Building a great merchandising strategy takes time. For more ideas on ecommerce merchandising best practices, see our article on the topic here.

Your ecommerce store is more than just a place to list products - it's a dynamic, ever-evolving space where you can create amazing shopping experiences for your customers. With a solid merchandising strategy, you're well on your way to ecommerce success.