Traditional vs Ecommerce Merchandising: How to Merchandise Online

Jun 7, 2024

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3 min read

You need people to see your products, or how will they be convinced to buy them? People have been deliberately arranging their products into attractive displays since before your grandparents were born.

You walk into a clothes store and mannequins have been purposefully arranged to showcase outfits. There are navigational cues around the store and the best products are proudly put on display.

This is traditional merchandising - or at least part of it. But eCommerce merchandising - otherwise known as digital or online merchandising - is a little different. In many ways, you’re at a disadvantage with eCommerce merchandising, and in many others, you’re better off.

We’re going to look at the differences between digital merchandising and traditional methods. We’ll then give you a run-down of how you can apply eCommerce merchandising best practices to boost sales in your store.

Traditional vs digital merchandising

There’s a lot of crossover between the kind of merchandising practices you’d implement in a brick and mortar business and those you’d do online. They’re the same basic principles, simply with a different application due to the spaces they inhabit.

Just like no item in a play is ever there by accident, no display in a fashion store is without deliberate design. This is perhaps the most obvious form of merchandising in modern retail.

Traditional merchandising

Every store you enter will be merchandising. Even the act of putting products out on shelves is technically merchandising. Of course, those with the brains will go the extra effort to make more revenue.

A good example is the US-based retail giant Costco.

Costco sells chickens for $3 to $4. That’s a lot cheaper than the competition. In fact, the company loses tens of millions of dollars every year on chicken alone.

So why do they do this? The simple answer is to get people through their doors.

The cheap chickens are placed right at the back of the store and shoppers have to walk through isles of meticulously merchandised products to reach them. This increases the chance they’ll buy other stuff.

On top of that, Costco places $5,000 television sets at the front of the store to create an imbalance. The high-ticket items are rarely bought, but they make everything else in the store look cheaper.

The combination of a high-volume sale item and a high-ticket perception shifter results in Costco making significant revenue. This is a method that has been tweaked and adapted over the years to find what works.

Chicken and TV. That’s what works.

This is merchandising in action. It’s a lot more complicated than you’d think and merchants need to analyze consumer behavior over time to find the right methods for their specific business. As there's a lot to explore in this field, you can compare online course platforms to find the one about merchandising that best suits your needs.

Imagine walking through an entire warehouse of great deals to reach the one item you went in for. Costco makes a lot of money from its merchandising tactics.

5 Rs of merchandising

The fundamentals of merchandising can easily be broken down into the 5 Rs. These apply to both traditional and digital merchandising. We’re going to look at them from the perspective of eCommerce merchandising.

Right product: You need to research the market and know what your customers are looking for. This is actually easier to do with an online store as you can use analytics data to see what users are searching for on your site. You can also use tools like Google Trends and Keyword Planner to see what searches are popular on Google.
Right place: Product placement is a multi-billion dollar industry. Think about that can of Coke sitting on the table in a movie. It’s not there by accident. The same should be true of your products on your eCommerce store.
Use bold imagery on your homepage to draw attention to a sale collection or promoted item. There are plenty of simple techniques you can use to draw people’s eyes to an area on the screen. Arrows are a good start.

Right time: Consider the time of year and what holidays or seasonal sales are taking place. You can also plan your merchandising to fit around product launches. For example, if you’re going to launch an updated version of a product, then it makes sense to get rid of all the previous versions of that product before the new launch.
Right quantities: Always make sure you’ve got enough stock to not run dry, while also ensuring you don’t buy more than you can sell and lose money.
Right price: This is the main factor when it comes to making a sale or not. The right price is critically important. Too much and people will walk away, but too little and people might assume your product is inferior. It’s best to go for that ‘Goldilocks’ price.

You might be thinking this sounds a lot like good luck. It isn’t. There’s a science to putting the right merchandise in front of people at the time they’re most likely to buy.

Of course, merchandising also relies a lot on marketing to make these products more desirable.

A combination of attractive photography and hype around a new release is a great start to eCommerce merchandising (Source: Reddress)

eCommerce merchandising

Digital merchandising uses the same fundamental precepts as traditional merchandising. The major differences come in its application.

How do you take what a store like Costco does and mimic it in an eCommerce store?

First, you need to build a logical sitemap. This is fairly easy with an engine like Shopify powering your eCommerce store.

You have your homepage, which is basically what you’d see when you walk through the doors of a brick and mortar store. Here you can promote sale items, draw special attention to promotional products, or demonstrate the kind of lifestyle your products will give shoppers.

It’s obvious to see what Beard & Blade is all about when you land on their homepage. This is how your online store should be.

Why digital merchandising is so important

Online stores are at a disadvantage to brick and mortar ones because people have to dig to see your products.

Shoppers can’t hold your products in their hands and inspect them properly. They can’t take them to the dressing room and see if they fit right. This puts e-merchants in a difficult position.

Still, this can be worked into an advantage for you because once shoppers find a product on your website you can hold their attention to it more effectively.

Online shoppers can’t hold your products in their hands, so they have to rely on detailed product photography and copy.

By utilizing the space provided on a web browser or mobile screen, you can pull shoppers into a sales funnel without them even realizing it. Make sure you’re including CTAs (calls to action), as well as navigational cues like arrows and lights to draw attention to products you want to move.

Once a shopper is locked onto a product page, you can take steps to keep them there by building a sense of urgency using countdown timers, offering discounts, and using high-quality product and lifestyle photography to entice them into adding to the cart.

A good offer wins the day

The best way to win over shoppers is by giving them a good deal. This is the be-all-end-all rule of merchandising. People can be convinced to part with their cash for high-ticket items, sure, but nothing is easier to sell than a good product with a great price.

The trick to eCommerce merchandising is to get shoppers to the products you want them to buy. Your homepage is the easiest way to do this on-site, but your social media channels, email list, and other marketing platforms will also play a huge role.

How to merchandise digital products

Successfully merchandising products in an online store isn’t particularly difficult. Still, a lot of merchants try to find the ‘secret sauce’ of tips and completely skip over the foundations of effective merchandising.

Make sure that:

Your store has a simple and familiar layout
You’re grouping similar products
Your search bar isn’t overlooked

These fundamentals of eCommerce store layout and navigation will take the guesswork out of your store. Shoppers can then focus all of their attention on the products you place in front of them.

Let’s take a closer look.

1) Build a familiar store layout

Building a successful merchandising strategy is like building a house. You need to lay the foundations first, then fill it out, and finally focus on the decorations. A lot of businesses try to decorate their merchandising first without bothering to make sure their foundations are secure.

Luxury leather goods merchant Carl Friedrik keeps a simple homepage, with easily noticeable menu items, a recognizable cart icon, and a relatable bit of merchandising in the hero image.

You need to build a familiar store layout to make it easier to direct shoppers’ attention where you want it.

For example, the menu should be at the top of the page - as it is with practically every website you’ve ever visited.

The cart button is usually in the top right corner and the search bar is often under it or in the top-center of the page.

Don’t try to surprise your visitors with your store layout.

Get the basics right and then focus on adding promotional products and collections. Finally, you can add some arrows, lights, CTAs, and other navigational cues to try and guide visitors.

Keep it simple and intuitive.

2) Use the search box to full effect

Up to 30% of people use the search box on a website. These are more likely to be shoppers who know exactly what product or type of product they’re looking for. Still, you don’t always have the product they want and it’s much better to offer something similar than to show ‘no results’ and lose the conversion forever.

Boost Product Filter & Search lets you choose where products appear in search results.

The Boost Product Filter & Search app lets you merchandise your products in a live search bar, which draws significant attention to the items you’re trying to push.

This is an all-too-often overlooked strength of eCommerce merchandising.

Make sure you’re using your search bar to full effect.

Use site search analytics

You can also use Boost Analytics to measure which search terms are most frequently being entered, including those that yield no results.

You can use this site search data to more effectively choose products to merchandise, both in the search bar and elsewhere on your website.

3) Group similar products

The art of grouping products is a simple and often overlooked one. We don’t necessarily just mean putting paint with more paint, we mean putting paint with paintbrushes, or t-shirts with overshirts, or toothpaste with a toothbrush.

Some products simply sell better together.

Effective online merchandising leverages the power of cross-selling with ease because you can promote similar products in the checkout as well as on product and collection pages.

The art of cross-selling

Cross-selling is when you offer similar products in a bundle. A fine example is a camera and an SD card, or a laptop and a mouse.

Fashion store Nili Lotan uses a very effective ‘Wear With’ strategy to cross-sell other products that match with the one shoppers are eyeing.

Cross-selling works best when you offer small add-on products like accessories. Shoppers are much more willing to pay for small products when they’re already making a larger purchase.

Perhaps one of the best examples of this is antivirus software. Most people just ignore those McAfee pop-ups, but when you’ve just spent $800 on a new laptop, you’re much more willing to part with $30 to protect it from threats.

The art of upselling

Cross-selling and upselling are often thrown together, but they’re two different things. Upselling is when you offer a similar, but slightly better version of a product, to the one the shopper is looking at.

The Apple iPhone 12 Pro comes in three internal memory options. It’s the perfect chance for an upsell.

One of the best examples of this is offering an iPhone 12 Pro Max to someone who is shopping for an iPhone 12 Pro. You can then offer larger internal memory storage for an additional cost. People are quite easily upsold once they’ve already committed to a purchase.

In fact, upselling has been shown to increase revenue by up to 30%.

Final thoughts: Online merchandising is king

Digital merchandising has a lot in common with its traditional cousin, but capturing shoppers in a sales funnel is ultimately a very different process online. The world is moving online and eCommerce is taking center-stage. It’s important that your brand becomes completely competent with digital merchandising as we move into the era of retail.

Remember to use Boost Product Filter and Search to leverage your eCommerce store’s site-search function for more conversions. Good luck!

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Ellie Ho

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Content Marketing Specialist

June 29, 2024

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6 min read

Traditional vs Ecommerce Merchandising: How to Merchandise Online

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