How to choose your merchandising tool: A 10 point checklistby
29th Nov 2012
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Successful merchandising involves a mixture of various techniques. Stefan Schmidt provides 10 tips to assist your merchandising strategy and tools selection.
Matching your business interests with those of your online customer is a delicate balancing act. On the one hand, you want the customer to find the product that they are looking for, but on the other you also want to influence their purchase decision based on your preferences, (i.e. if a certain product has a higher margin, too many of one product in stock, or end of a product line, etc.)
Successful merchandising is not enabled by just one tool. It is a mixture of various techniques, the data you’ve got and, last but not least, your very own gut feel. Here are a few points you may find helpful when discussing your merchandising strategy and tools selection.
Of course there are the obvious features you’ll look out for when selecting your merchandising tool:
- Support for search (with all its modern enhancements, auto completion, type ahead support, etc)
- Guided navigation - automatic filtering
Obviously you also want the tool to perform well under load as it will be an important piece of your overall offering. However, there are some points you should also consider before choosing your tool based on the above features.
1. How good is your data?
The old saying of 'you only get out what you are prepared to put in' is as true in merchandising as anywhere else.
Will the tool you are about to select give you the ability to:
- Effectively administrate, govern and steward the data you want to use?
- Help you to improve the overall quality of your data?
- Ensure consistency across various data outlets and not just your merchandising tool?
- Give you the ability to define and manage the facets you will later show to your customers?
Ultimately, good data management means good navigation and effective search.
2. Do you think about going global?
Support for multi-language on the front end as well as in the back end will be key for a successful global roll-out. Often tools struggle due to the additional amount of data that’s required for multi-language support. Keep in mind that, while tools often provide the additional language packs, they come at a significant extra cost and synonym dictionaries are not available. Languages such as Chinese or Arabic are a no-go.
3. How complex is your pricing model?
Do you really have only one price per product, as often assumed by merchandising tools? If not, because of the approach that merchandising tools take to index your data, by flattening the data structure, billions of data rows are not uncommon. Can the tool of your choice deal with this BIG Data-style situation?
4. Can you create association between products?
Certainly guided navigation and a great search can do a lot, but what’s also really powerful is establishing cross, up or accessory relations. The setup, management and handling of bundles is also a very powerful merchandising mechanism that requires more than a powerful search.
5. Can you create landing pages dynamically?
Your customer searched for a specific brand? Wouldn’t it be great to have them land on a page dedicated just to that one brand? Alternatively, they may search for a category, for example, running shoes. Why not have them land on a page dedicated to running, presenting shoes and additional running gear along with promotions relevant to their search?
6. Speaking of relevancy. Context is king
The context of a search is as important as the search itself. Here are a few questions you may want your tool find the answers for and then weave them into the execution of merchandising rules. Do you know this customer? What did he/she buy in the past? What do you know about the customer’s current session? Have they logged in with a Facebook account and provided me with access to what they like? Or what have they pinned on their Pinterest board? You may have that product in your store and, although they haven’t searched for it explicitly, why not show it anyway? How did they interact with your business on other channels? Have they bought from your stores, via your mobile site or contact centre? Can you create rules that take this effectively into account?
7. Promotions are more than just displaying a banner
Displaying a promotion is often more complex than just showing a banner. It depends on the customer’s context as well as the context of the page or the navigation and economical aspects play a role too. Some of them have to be evaluated in real-time. For example, a promotion is limited in how many customers can use it. You don’t want to show a promotion to your customer first, only to tell them later that they are no longer entitled to it. A much better practice is to show just the promotions they are actually entitled to.
8. Can you re-use your merchandising tool across customer touch points?
By design each customer touch point has different characteristics, which merchandisers have to cater for. Although the goal is fundamentally still the same – get the right product at the right time in front of the customer – the way to achieve it is different. What works very well at one touch point may not work so well at another. Take mobile vs. online for example. On a website it’s perfectly acceptable to have a search & navigation bar, show cross and up sell products, have lots of filters and sometimes long lists of products. Research though has shown that customers rarely use mobiles in the same way that they use browsers on a notebook or desktop. In fact they often have the clear intent to find the one product that they are standing in front of.
So the journey would probably not start with browsing and is more likely to be a desire to get to the product quickly. This then bypasses nicely crafted landing pages, search & navigation tools and other techniques delivered by merchandisers. As a result merchandising has to happen on the product detail page, but in a way that does not distract the customer from the product they have already expressed interest in. Hence the tool set should support the merchandising of accessories or similar alternatives in the space available.
Merchandising tools that work across touch points offer another great opportunity. They can be used to support customer service or sales personnel in-store when interacting with a customer. To date retailers have had to train their personnel to provide them with insights on which products to push, which products accessorise well with other products or which offer great up-sell opportunities. However, once the sales associates are back on the floor they’re on their own. Tablets that provide access to content fed by the merchandising tool, however, can help sales people to stay informed leading to more effective and insightful interaction with the customer. In turn this will increase the likelihood of a sale dramatically.
9. Do you have access to all information in your merchandising tool?
Of course the product catalogue is a very important part of merchandising, but successful merchandisers know that other data elements are equally important. Can you present products depending on a customer’s location? Can you factor-in real-time stock levels? Are the commercial aspects up to date and do they reflect what is actually available? Successfully blending product, order, customer and stock level information with the real-time context of the customer allows for very powerful merchandising. It’s like creating an individual world for your customers.
10. Does your merchandising tool play well with others?
As stated in the headline, there is no silver bullet that solves all your merchandising needs. Every specialist solution has its sweet spot but sooner or later it requires help from another tool. How do you organise this zoo of packaged solutions? Keep them all fed with consistent information and allow them to work effectively together.
Striking the right balance – things to remember
- Merchandising is a team sport. It’s not the individual that decides whether you win or lose. The best teams do not necessarily need stars. They are more than the sum of their parts. So when selecting your tool set, think about how your perfect team looks so that it can deliver the trophies you deserve.
- When you think about feeding your merchandising tool with content, remember the pertinent saying, “You get out what you put in”
- Multi-language support is often key nowadays. Even if you are not planning a global rollout right now, make this part of your system’s DNA otherwise it will present you with a big headache should you decide to take your business global (or even just into a neighbouring market).
- Leverage your merchandising tool across customer touch points. It will not only benefit your customers, it will also make your sales force more effective when on the ground and in-front of the customer.
Stefan Schmidt is director of product strategy at hybris.
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