Merchandising (according to Wikipedia as of March 19 at 10:18am Pacific Daylight Time) is:
Any practice which contributes to the sale of products to a retail consumer. At a retail in-store level, merchandising refers to the variety of products available for sale and the display of those products in such a way that it stimulates interest and entices customers to make a purchase.
The first (apocryphal) story of merchandising and data concerns disposable diapers and beer. The math showed that people who bought disposable diapers at convenience stores, rather than at well-planned trips to the big box store, also – impulsively – picked up a six pack of beer.
The role of the merchandiser is to decide whether stocking those two items together would boost sales of beer, or whether separating them physically would increase sales of other, impulse items. The true data-drive merchandiser would have tested both – in different geographies – in different socio-economic regions – at different price points.
In-store merchandising reached its data peak when stories came out of Japan of how 7-Eleven stores changed the products they had on their shelves based on the time of day to maximize their limited retail space.
Some manufacturers have some leverage when working with large stores. In exchange for higher margins, lower shipping costs, specialized packaging, etc. a retail chain might give special shelf consideration to best partners.
But what happens when the store displays are invisible or dynamically generated depending on the shopper? Welcome to online merchandising.
Where, Oh Where Are My Products?
If you sell through Amazon, BestBuy or Costco, you have no idea whether your products even show up on the home page, in a given category or during an on-site search unless these things are pre-negotiated and good luck scaling that.
This is where the new metrics Findability and Shopability come in.
Coined by Content Analytics:
Findability is a measure of a consumer’s ability to discover a product online.
Shopability impacts a potential customer’s ability to make a rational decision
Is there enough information about specifications, size, packaging, price, etc., for them to actually put it in the shopping cart?
Content Analytics founder David Feinleib says that over 75% of on-site search on major e-commerce sites like Amazon and Walmart.com are generic search terms rather than brand names. How do you know if your product appears on the first page of in-store search results? This is crucial because products in the top three positions enjoy four times the traffic than all of the other results combined. This issue, of course, is significantly aggravated by mobile shopping.
On the Shopability side, an online merchandizer needs to know if the right information is delivered to the shopper in the right format, at the right time, to turn them into a buyer. Photos, specs and reviews must be present to clinch the sale.
Technology to the Rescue
- An item is out of stock? You get an alert.
- An item loses its ranking in the search results? You get an alert.
- Your competitor changes their pricing on a given retailer? You get an alert.
- Insufficient number of product reviews? You get an alert.
- Bad viewability on mobile devices? You get an alert.
- Pictures not rendering as expected? You get an alert.
While the technology itself may not be remarkable, the collection and analyzation of the right kinds of data are proving to be invaluable ion the online world.
If you’re in the ecommerce world, it’s time to add Findability and Shopability to your metrics lexicon.