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12 approaches that work - The Merchandising Report 2015

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Techniques to improve the effectiveness of merchandising range from technical fixes such as data analytics through to something as simple as improving website design. But whatever their provenance, here are a dozen techniques that have proved effective. By Paul Skeldon

1. Good site design matters

The first and perhaps most basic step to good online merchandising is to make a website look good. Sounds simple, but what this really means is to design a site so that it offers the balance between images that sell the product, just enough text to answer the questions everyone asks, and the ability easily to access the information that you may want. But again, that isn’t as simple as it sounds.

John Lewis has, arguably, one of the best sites around, with a clean and clear layout that relies on pictures to aid the shopper through to what they are looking for. Thought has gone into how the images are used, both to show off the products and to allow for simple navigation. Minimal text also aids the process on the home page. Clicking through yields more of a grid and the experience errs towards standard ecommerce website as users drill deeper in – not that there is anything wrong with that.

2. Good design on all devices

While having an exemplary site is the first step in good merchandising, today this has to be extended across all platforms, particularly mobile. The challenge here is to meet all the criteria of good site design, but on a variety of screen sizes, and for sites to be delivered, at speed, over a range of bandwidths. Load times and ease of use on mobile are crucial. A study by multichannel consultancy Practicology and UX testing provider WhatUsersDo, which got real people with their own devices to test the top 15 UK retailers’ sites on mobile, found that 10 of them had loading problems – or ‘conversion blockers’ – that made many users give up on them. Chief among these was design, but also any site taking more than one second to download was deemed slow. Getting the look and feel right, and delivering that at speed on all devices, is crucial.

3. Consistency across devices

Retailers have to offer consistency across all devices that users may use – and that goes for apps too. Familiarity across all properties for a retailer is crucial in terms of customer experience, which is the bedrock of merchandising, in particular on merchandising. The layout of the site and the general ‘look and feel’ are crucial for brand consistency, but having consistent offers, deals and bundles on all sites is also key.

This isn’t to say that you can’t do different product pushes on different devices: that too can work. However, understanding where the consumer has come from or their previous shopping patterns across all a retailer’s properties is crucial.

A first-time visitor to a site may well be happy to have a location-specific lead from a mobile site. However, one that has been looking on a website already may well want to see the same thing on their mobile when they return.

To achieve this, retailers need to understand who customers are and where they’ve been – and to do this you need data (see point 6). Retailers also need to look at deterministic verses probabilistic ways of predicting who people are. In an ideal world, customers have signed into a site and on mobile and so retailers know who they are. If not, then retailers have to rely on some heavy-duty data analysis from third parties to work out who people are and what they have looked at elsewhere.

4. Transferable shopping baskets

This commonality across devices also needs to include shopping baskets, and wishlists that transfer from device to device too, if merchandising is to be maximised. If retailers have done the work to persuade someone to put something in a basket, don’t waste that effort should the customer try to check out on another device.

Getting things such as baskets to work across web, mobile and even an app is no mean feat. Typically it means that retailers have to get the consumer to sign up and log in – and stay logged in. This is a merchandising feat in its own right. The incentive that your basket will always be there from device to device is not probably alone enough to make someone sign up. So retailers have to look at how to make this feature more appealing. Offering the ability to store payment and delivery details is one way. Serving up newsletters, offers and content may work too.

5. ‘Search merch’

Merchandising at the front end isn’t just about look and feel, it is also about search. Basic site design and branding will go some way to luring consumers into a site or app, but the ability for customers easily to search from there is crucial. Good search isn’t just about having a prominent search box on the home page – everyone has that – but more about the meta-tagging used behind the scenes to allow for searches to pull up what the user is looking for, but also what the retailer might want to sell to them based on what they are looking for.

Now, that is not to say that you give them pears when they search for apples, but intelligent use of search can be a way of merchandising elements of stock related to what someone is looking for.

6. Work any data that’s gathered

The key to making ‘search merch’ and many of the other elements of merchandising work lies in data gathering and, more specifically, data use. There are a number of analytic packages that enable the collection of meaningful online data. The solution chosen should enable companies to monitor an unlimited number of products and price points, and provide advanced product mapping to ensure in-depth comparability of a trader’s own products and those of competitors. A solution that gives retailers the ability to understand market maps – the trade-offs that customers are making with the retailer’s brands and competitor brands – is crucial.

7. Experiment with offers

Outside of the site design, big data and all the other back-office things retailers can do, online merchandising still relies on seemingly simple and mundane promotions such as offers, bundles and trials. But the key is to experiment and test offers – which comes back to using personalisation and data, trials, demos, events notifications, personalisation and segmentation, analytics and testing tools to continuously to experiment by region, placement, types of customers and their behaviours, or products and services being sold.

Test and experiment: see what works in the market, segment customers and push merchandising options accordingly. Do not stop at the customer acquisition stage, merchandising can be done at all stages of the digital commerce lifecycle. A company can push discounts in customer portals areas when people want to unsubscribe from a service, or focus on specific segments of customers on improving frequent visitors to a retailer’s website.

An example here would be Absolute Software. The company changed its trial model from free with minimal input to free with premium add-ons, and it worked wonders. It saw a five-fold increase in trial conversion rates and an optimised user experience.

8. Utilise mobile offers

One of the unique attributes that mobile brings to the merchandising party is location – and to some extent context – of customers, and this is a perfect lever to pull with offers. As part of the merchandising process – and the test-and-trial methodology outlined above – look at how to use mobile specifically to drive sales on any channel. An example to follow here is chicken emporium KFC, which has shown that mobile location-based promos do actually work, with a three-month trial driving increased footfall and a very impressive click-through rate to its site.

The campaign launched in March this year to promote KFC’s burrito range. In addition to an uplift in store visitation, the campaign showed that engaging with customers near KFC stores drove a click-through rate 40% above the industry benchmark.

The company behind it – xAD – has also done work for Starbucks and ASDA , both of which drove an average boost to store visits of 60%.

9. Gamification is becoming important

People like to play, so making marking, interaction and buying in to a game is a clear way to develop merchandising – and it works well across all channels: online, mobile, in-store and social. An example here is restaurant chain Zizzi, which is using gamification as part of its ZizziTacklesCancer campaign in the UK.

The innovative campaign, using 3radical technology, is aimed at taking customer engagement to a new level by combining online, mobile, social and in-restaurant experiences across its 140 restaurant outlets. Initial results from the campaign have already seen a threefold increase in email click-through rates, an engaged audience of repeat players, significant social sharing reaching new customers and importantly for Zizzi additional donations to Stand Up to Cancer.

Consumers are able to access an online scratch card via their smartphones on Zizzi’s Facebook page and mobile-optimised website, driven by the 3radical Voco platform.

Rewards include instant vouchers and entry into a draw for the opportunity to train with England Rugby teammates, Jonny May and Alex Corbisiero or to win a trip to New York.

Consumers can increase their chances of winning by supporting Stand Up to Cancer, getting friends involved socially, visiting Zizzi and redeeming vouchers, and over time through a range of additional motivational mechanics, both in and out of restaurant.

The high engagement rate for the online scratchcard – across all of initial plays, repeat plays, social engagement and donations – is mirrored by 3radical’s recent survey of consumers in the UK, where 87% of consumers have said that they are looking for a fun, rewarding and relevant experience in return for reading brand messages.

10. Virtual reality

As technology evolves and new gimmicks arrive on the scene, it is important to assess them and see where they fit into a merchandising strategy. While the key is personalisation and a lot of data mining, fun is a big part of merchandising, as we have seen from looking at gamification. One technology that has in some ways struggled to find a home – and while it does so has played a role in merchandising – is virtual reality (VR). VR lets you imagine what you think goods will look like on you or in your home – a sort of digital try-before-you-buy idea.

Opticians such as Specsavers have been trialing this technology – admittedly with mixed results early on – and it is starting to spread to the mainstream world. Furniture retailer DFS has installed the technology in its stores to help customers assess what big-ticket items may look like in the home. VR has played a part in the company growing 17% over the past year and taking around 40% of all upholstery sector web traffic.

11. Online visualisation

Akin to virtual reality, many stores, especially in the fashion apparel sector, are looking at how to use technology and mobile to virtually try on clothes virtually, or to see what furniture or decoration would look like in the home.

A leading proponent of online visualisation is Fitsme.com which provides the technology to let users share their measurements with apparel retailers and virtually try things on. This is great for consumers, but has a huge merchandising benefit for retailers.

Being able to try on and see what clothes look like is a great gimmick, but also a great incentive to buy. Retailers that create an interesting shopping environment are more sticky and consumers more likely to shop with them – and crucially, return to shop with them.

For the retailer, there is the added advantage of obtaining personal data about the consumer, which can aid in other aspects of merchandising and marketing. In addition, the data can also help with stock control because of the information it offers on sizes.

And it is not just in fashion where this works. Topps Tiles , a leader in the merchandising sector of the IRUK500 uses a Visualiser to help people assess how tiles and flooring will look in the home. This has contributed to Topps seeing revenues of £212m in 2015, up from £195m in 2014.

12. Augmented reality

Augmented reality is akin to virtual reality, but typically allows retailers to overlay something onto the ‘real world’ as viewed through a screen. It has been knocking about in retail for some years and, like virtual, has yet to find a true home, but it is quite an interesting technology for novel merchandising.

Asda has run Halloween-themed AR campaigns for the past two years, allowing those with the Asda app to see ghosts and ghouls – and offers – appear in the store when they hold up the camera enabled Asda app on a smartphone.

In another application of AR, House of Fraser [IRDX RHOF] introduced the technology to its iPad and iPhone apps, allowing customers to access apps and shop from immersive content such as videos, music, 3D product previews, recipes and ‘lookbooks’.

The augmented reality function – called Scan and Explore – was introduced into the apps through integrating Layar AR technology with the Poq app commerce platform, the platform that powers all of the House of Fraser apps. Data on how well it has worked has yet to be published, but such a move by a forward-thinking merchandiser as HoF clearly shows that AR may soon be part of the mainstream merchandising cannon.
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