What is eCommerce Merchandising? All you need to know

Jackie Pham
Jun 14, 2024
3 min read

Merchandising is now an integral part of eCommerce. People may hear of it, people may know it, but really understanding this concept and knowing how to execute eCommerce merchandising is another story.

It pains us to see many people struggling with this amazing concept, when, if done right, eCommerce merchandising can actually drastically boost your business.

In this article, we’ll first dive into the basics of eCommerce Merchandising - what they are, why they are important and its fundamentals. Then, we’ll discuss how to execute some best practices of merchandising effectively with examples from real brands. Finally, we’ll go over important reminders for e-tailers before closing the discussion.

Now let’s get into it!

What is eCommerce Merchandising?

eCommerce merchandising (eMerchandising for short), or otherwise known as digital merchandising or online merchandising, is the practice of presenting, organizing, and implementing product offerings and promotions on a website to influence customer intent and reach specific business or marketing goals. For online stores, these goals are often to enhance customer experience and thus boost revenue.

This process often includes managing on-site promotions, curating search results and testing improvements to guide users through their customer journeys.

To put it simply, you can say that eCommerce merchandising is all about how on-site products are displayed to encourage your customer to buy and buy more. As Practical eCommerce explains: “eCommerce merchandising is the art and science of displaying products or offers on a website with the goal of increasing sales.”

Why is eCommerce Merchandising important?

Do you remember the last time you went online shopping? How did you find the product you want? What made you click on a product to see more? What motivated you to purchase that product? Well, that probably thanks to the power of digital merchandising.

eCommerce merchandising plays a critical role in the overall success of your business. After all, when customers come into your online store, you want them to buy. Effective online merchandising is exactly the tool that gets them closer to that purchase decision.

Digital merchandising, if done right, makes several important contributions to your online store. It increases sales by making a site appealing to your customers. It also improves profitability by generating more revenue.

Appeals to Customers

  • One of the ultimate goals of online merchandising should be to take the hassle out of shopping and make it easier. Remember that not everyone may consider shopping fun, sometimes people shop because they need to. For that reason, good eMerchandising makes shopping easier for customers and gives them reasons to come back often and spend more money.
  • Good online merchandising can also create customer loyalty. Customers tend to shop where they feel certain they can find the products they want. They will be loyal to your online store long as you can create a pleasing shopping experience and provide what they need.
  • Finally, good digital merchandising can encourage repeat customers. You should be aware of the fact that 25% to 40% of the total profits of most businesses originated from these returning customers. If your customers remember that your online store is easy to shop through, they will return again and again.

Improves Profitability

  • One way good merchandising can improve your store’s profitability is by enhancing your price image. In the current eCommerce picture, having a good price is not necessarily your best competitive advantage.

    In particular, if you’re an online retailer, the way you merchandise weighs heavier than your product price. Customers are no longer drawn to your eCommerce store based on the items you sell or how much you sell them for. The fact is, your competitors likely have very similar products and prices and there isn’t much you can do about it.

    What you can control, however, is the shopping experience. This is where you can differentiate. This is why your merchandising warrants the same strategic planning as your product lines and pricing models.

    Instead, trying to focus on your customer experience can be a far wiser strategy. Online merchandising is a way to start, with convincing your consumers that you are priced competitively for the value and service you offer.
ecommerce merchandising customer experience over price boost merchandising
Image Source: Super Office
  • Digital merchandising also allows e-tailers to make strategic pricing decisions. Through promotional merchandising techniques, such as dump bins, it’s possible to increase item sales while at the same time lowering prices.
  • Merchandising can increase your sales per customer if it’s arranged to promote add-on sales on your site, for example, through impulse displays at the checkout counter.

Merchandising in Boost AI Search & Discovery

After the grand release of Boost AI Search & Discovery, our Merchandising has been upgraded. Boost Merchandising 2.0 allows users to create and apply Merchandising strategies on search results, collection pages, and both (aka universal merchandising rules).

Besides common strategies like Pin, Boost, Demote, and Hide products, we introduce a new Filter rule for search result pages. When activated, this newly added rule will only show products that match specific Filter criteria that you have set. For example, during the Christmas sale, you want items with the iconic Red, Green, White colors to appear in the results for "Christmas", you can set up a Filter merchandising rule to achieve that.


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What are the fundamentals of eCommerce Merchandising?

There’s more to online merchandising than just having an attractive website. If you have an artsy and impressive site but it converts poorly, that’s obviously not good merchandising. Online merchandising, on the other hand, has long been a science associated with the design of the homepage, the placement of the elements and the presentation of the products.

Today, eCommerce merchants are making strategic decisions that go far beyond building a clean, responsive site. When you learn how to e-merchandise, you learn how to effectively utilize the most of your online store to encourage customers to buy.

A smartly merchandised store is also a smartly organized store. Customers like organized stores because they can find products quickly and easily on their own. All of the elements of eCommerce merchandising contribute to making a store more organized, more user-friendly, and more convertible.

Next, we’ll discuss five basic elements of eCommerce merchandising on online stores:

  1. Site Layout, Design and Structure
  2. Homepage Layout
  3. Product Layout
  4. Site Search
  5. Cross Merchandising

How to apply eCommerce Merchandising strategies - the best practices for SMBs

Now that we’ve identified the most vital aspects of eCommerce merchandising, let’s see how you can do it yourself. Don’t worry about us boring you with books of theory, as every step-by-step tip given out will come with examples for you to refer to.

Site Layout, Design and Structure

It is no secret that a more appealing site will not only decide an e-business’ credibility, but also lead to increased sales and revenue. Web credibility research by Stanford University shows that 75% of users admit to making judgments about a company’s credibility based on their website’s design.

The design, layout and structure of your website make up the look and feel of your website. According to Phil Turner in his book “A Psychology of User Experience: Involvement, Affect and Aesthetics”, 46% of consumers base their decisions on the credibility of websites on their visual appeal and aesthetics. All of the details, from the colors, fonts, design elements, etc., as trivial as they may seem, can be the difference makers in which you gain or lose a customer.

These are 3 utmostly important things you should consider when designing your site:

  • Clean design: Design and website visuals are the best way of bringing out your brand personality – something that makes you more human and pulls people towards your brand.
  • Clear navigation: Going beyond the surface appeal, your website must also be easy for the user to navigate through. The structure of the website should be simple and something that even a first-time visitor is able to understand easily.
  • Casual mobile responsiveness: Accessing your online store by mobile should be effortlessly easy, considering 79% of customers now make orders through their mobile phones.

Homepage Layout

When shopping online, your homepage is often the first encounter potential customers have with your brand and you know how the first impression matters.

The homepage is like the face of your online store. This is the space where you can deliver your visitors an instant impression of who you are and what you are doing. Going beyond static window displays, use this precious space to inspire customers with dynamic images and layouts, and deliver a more tailored point of entry for your target audience.

Here’s some super tips you can immediately apply to your site.

Start by explaining what your products or brand are, how your products work and why customers should buy them. Remember to make it brief, like a tagline, and of course use signature images to charm your visitors’ at first sight.

Headphone Zones homepage layout ecommerce merchandising
Headphone Zone’s homepage instantly gives us an idea of what they sell and an impression of their business.

Steal your visitors’ hearts with hot deals

Attract your visitors to convert by offering a deal right there on the homepage. Something like a discount code for first-time shoppers, for seasonal occasions, or a free shipping code or even a combo will do the trick.

What is the first thing you can see on GAP’s homepage? Yes, it’s deals, deals and super hot deals. Their offers are featured big and bold on banners and toggled pop-ups, so visitors can never miss a chance to check out these inviting discounts.

This strategy is plain and simple, but it works. After all, who doesn’t like a good juicy deal?

GAP ecommerce merchandising homepage tips
GAP gives their visitors more than a chance to grab their deals and keep them staying for more.

Utilize customers’ review

Back up your claims with third-party support, such as social proof, like customer reviews, and authority proof, like media reviews of your products. You can also use other forms of proof, like reviews and testimonials, visitor or sales numbers or links to your brand’s social media pages that show how many people like and follow you.

This kind of user-generated content (UGC) shows that people use and love the products they’re sharing photos of. In this way, if your visitors don’t purchase, at least they are likely to follow you on social media and on the way to becoming a potential buyer.

Let’s see how Mavi uses the power of their customers’ testimonials, leveraging the power of Instagram feed to showcase customer imagery of the products and add credibility to the brand at the same time.

mavi social proof ecommerce merchandising optimization

Finally, include clear calls-to-action (CTAs) at the close of each section to direct your visitors to the next part of your purchasing funnel. Pay attention to the spaces and the layouts among images.

Social commerce is the new eMerchandising

Social commerce, according to Smart Insights, is an increasingly important part of eCommerce. Incorporating reviews and ratings into a site and linking to social networking sites can help understand customers’ needs and increase reach and conversion to sales.

Social merchandising is designed to grab the attention of a prospective customer and to provide online shoppers a sense of validation in their online shopping experience under the influence of KOLs or social connections.

Online stores can use a social merchandising plug-in on their website to friend-referrals from prior shoppers. This previously required the shopper to be signed into the social network website to enable the social merchandising plug-in to operate. However, e-tailers now have many creative ways to integrate their social media without troubling their potential buyers.

under armour UCG social merchandising example

Under Armour South Africa embeds their Instagram feed. Each time you hover over the plus icon in their photos, basic product information will appear and you can access to see the product more from that.

red dress social merchandising example ecommerce merchandising

Similar to Under Armour, Red Dress also integrates their Instagram on their website, but customers can easily click and buy (or add to cart) their favourite items.

Product Layout

A product layout is the strategic use of digital space to influence the customer experience. How customers interact with your e-merchandise then affects their purchase behavior. Therefore, it’s worth every penny and second for eCommerce stores to develop their product display and arrangement strategies to enhance customer experience.

A product layout is like a digital storefront. To leverage the benefits of the image gallery, you should create a layout scheme that focuses on enhancing user experience.

Here are a few recommendations:

Apply a grid-based layout

The grid layout is used by most giant e-tailers like Amazon, eBay, and Walmart. The main reason why grid layout is so popular in web design is that it scales well and makes use of the white space effectively.

Furthermore, it gives your site a fresh, clean look that is more visually appealing. Thus, it improves visitors’ experience and attracts even more visitors to the website while encouraging them to stay longer.

grid based product layout by Lenox ecommerce merchandising
grid based product layout by flashy box online merchandising tips
grid based product layout by Maps ecommerce merchandising tips

From examples by Lenox, Flashy Box and Maps, it is evident that grid layout is also versatile and can be applied to pretty much any niche or industry.

Clearly visible images

Product images shouldn't be obstructed by anything and placed on a clean background to avoid any attention being taken away from the product. The reason we now see so many minimalist sites with lots of whitespace is because this is ultimately the easiest way to ensure the content (products, images, text) is the focus.

ecommerce merchandising product images example from Yellow Shoes

An example of product layout from Yellow Shoes - simple but sophisticated. Product layout like this can help customers solely focus on the protagonist of the site - the product.

A reminder for you: use high-quality images. Visitors cannot touch or feel the product on online stores like they can in brick-and-mortar stores, so the only thing you can do is to use images of the best quality. In this way, visitors can examine the tiniest details of the products and zoom in to see the final product in the materials or colors.

More than images, use videos

According to a study by Digiday, 52% of consumers said that watching videos makes them more confident about their purchase decisions. Consumers today want a visually engaging online shopping experience that is personalized at the same time. As a result, including videos as a part of your eCommerce merchandising strategy will not only help you drive conversion, but also increase average order value, thus boosting your overall revenue.

Bringing life into the product with a short product video helps visitors easily imagine what a product looks like on a real person and suggest how they can mix and match when they can not touch the real product.

Aside from visuals, don’t forget the text

While visuals are important, your layout should also have room for descriptive text. Good copy not only describes the product, but also helps sell it and your brand.

For example, consider how Nine West uses a combination of both descriptive and spec information to give visitors an overall view of how the product will be like in real life.

ecommerce merchandising descriptive text on product layout from Nine West

Some tips for you: Descriptions should contain useful information about the product uses, specifications, materials, production and benefits. Aside from that, you should also highlight shipping and production times, especially if you’re offering free shipping. All of this should be done in an informative tone that matches your brand voice so that the customer feels connected.

Capture user’s attention with CTAs

CTAs (call to actions) are used throughout sites in an attempt to lead the user through a designated path, ultimately getting them to convert from user to customer. These are often in accent colors to draw attention and will lead to the checkout, a sale or other key areas of the site for conversions.

CTAs from Lacoste ecommerce merchandising

Lacoste (the Philippines) flexibly switches between CTAs to match the background colors and images used in one block. In this way, they can easily capture users’ attention and thus encourage them to make an action like clicking the CTA to see more.

Site Search

According to The Retail E-Commerce Playbook For 2021, 43% of users on eCommerce sites go directly to the search bar. People who use search are the ones more likely to convert up to 2.4 times more than those who don’t. When done right, site search can boost your revenue by up to 50% higher than the average.

On-site search is the eCommerce equivalent of asking for a store assistant’s help. One would expect shop assistants to know the answers to where to locate or find something, just like your shoppers expect your site’s search results to show exactly what they asked for.

In other words, to make your digital merchandising strategy work, paying attention to your search engine is one of the first things to do.

To buy the right products, shoppers have to be able to find them. You can optimize the search function on your site to help them do this. To make items easy to find, ensure that they carry appropriate tags: womens vinyl heels, black belt, tropical floral carpet. If your search tool has a visual merchandising option, use it to display thumbnails rather than a list of products.

Consumers also need to be able to find the newest products on your site. To help them, change the photographs in your hero slider frequently and feature new items at the top of category pages.

Cross merchandising

Cross merchandising is a term used to describe the placement of products together that are used together in certain circumstances. It is an effective way to show related items that are normally stocked in different departments of an online store. For example, you might show wine glasses right below your Rosé bottles product. In other words, you can e-merchandise these items to display on the same page.

Cross merchandising is an effective technique because it makes shopping easier and more convenient when customers can see several items they need in one space. This appeals to a customer’s desire to save time because they don’t have to go to multiple pages of the online store to get what they need. It’s also an effective tool suggesting add-on sales, since related items are together.

Cross merchandising organizes products in the way they are used. In this way, it gives customers project information. It can also suggest better-quality items.

In the eCommerce scene, cross merchandising is also known as cross selling technique. These techniques are often translated into presentation such as:

  • Recommended For You – Product recommendations based on the shopper’s preferences.
  • Complete Your Purchase – Products that compliment and can be used/worn with the chosen product.
  • Trending Products – Top-selling products (at category level if the shopper shows affinity to categories).
  • You May Also Like  – Products that are visually similar to the chosen product.
  • Style It (Complete the look) – Personalized styling recommendations for different occasions.

With cross merchandising, the sky's the limit. You can use your creativity and breathe in your brand voice to create relevant suggestions that resonate with customers’ needs.

online cross merchandising example ecommerce merchandising

Urban Natural uses the classic “Shop The Collection” to suggest cross-selling. This presentation absolutely matches their light and elegant overall style.

ecommerce merchandising cross merchandising make up geek example

Make Up Geek dazzles visitors with multiple sets of suggestions. First, they recommend similar shades under the category “Looks Great With…”, and then encourage customers to collect more diverse shades with “Make It A Set”. Make Up Geek also makes it extra easy for customers to make actions like Save (by clicking on the heart icon), or Add to Cart (by clicking on the shopping cart icon).

cross merchandising casely example ecommerce merchandising

Casely harnesses crowd wisdom by using “Customers Also Bought…”, thus they can increase cross-sales and overall revenue. This technique is popularized by the giant Amazon - old but gold.

ecommerce merchandising cross merchandising eastwood guitars example

Eastwood Guitars helps customers complete their purchase by adding suggestions of other accessories like guitar cases, guitar strings,  guitar straps etc. They also prioritize the discounted product to urge customers not to miss out on an opportunity to get a full set of guitar accessories. This technique evokes demands that customers may not even know that they need before seeing your suggestions.

More eCommerce Merchandising tips

The key to your eCommerce merchandising success is to figure out what each visitor is most likely to buy.

It’s not easy. But you can drive many more sales leveraging a deep understanding of your customers, using data from your online stores.

We’ve shared the most helpful merchandising tips here and you have many more proven strategies and tactics available to you. Also, make sure to grab site search best practices, eCommerce navigation tips and watch what leading retail brands are doing in our articles.

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Jackie Pham
Partnership Manager
June 29, 2024
3 min read