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Build on consumer expectations

Good merchandising has always been at the heart of successful retailing and companies that stand out in the Merchandising Performance Dimension demonstrate this through their product ranges, content and search options, as well as by providing tools to encourage add-on sales and impulse buys.

What the leaders do

Among Leading retailers, Dunelm stands out for its use of imagery, product information and encouragement of add-on purchases. An item of furniture, for example, may be shown in ten or more photographs that include close-up details. Product information is detailed and clearly displayed, while images of products both viewed and bought by previous purchasers are included on the product page.

H&M similarly suggests additional purchases, with items to accessorise a garment as well as illustrating purchases by other customers. The product page also includes ‘styled by you’ Instagram pictures from customers, with a neat sliding-scale indicator providing feedback on ‘true to size’ and a link to the shopper reviews that underlie the metric.

Ocado is one of the few food retailers enabling search by brand, with additional options including ‘dietary and lifestyle’ for customers to avoid allergens or specify, for example, vegan-only choices. It also recommends associated products to encourage add-on sales.

What has changed

This year, we have noted some significant changes in key merchandising metrics. Offering the ability for shoppers to save to a wishlist, for example, is now offered by 44% of Top500 retailers – up from 34% last year – while wishlists saved to mobile apps are even more popular, now offered by 49% of Top500 retailers, up six percentage points (pp) on last year. Providing upselling opportunities at the checkout are provided by 25% of the Top500 – up 10pp, so effectively a 66% increase in the use of this tactic within the year.

Use of ‘filter search by brand’ among the Top500 is up by a third since last year and is now provided by 40% of retailers, while auto-complete when typing into a search box is up 8pp to 54% of Top 500 retailers. In contrast, the use of bestseller indicators, never very popular, is down
by 3pp and are now used by just 7% of the Top500.

Key sector attributes

Researchers have also focused on the way different product segments merchandise their sites: clearly product per se is key, but the tactics used also reflect the way that consumers choose to shop for these particular items.

As well as becoming more popular, there are significant differences in the way ‘filter by brand’ is used between the product segments. The tactic is most common in the home and industrial appliances market, provided by 77% of this segment. This group also leads on search filtration by price (81%) and is closely followed for both types of search by sports and leisure clothing – 72% of top retailers in this category enable search by brand and 80% provide search by price. Both types of search are significantly less commonplace for fashion clothing – only 39% of Top500 fashion retailers, for example, offer search by brand.

These differences reflect shopper behaviour, with many more likely to search for a particular brand of white goods or tennis shorts, for example, while many fashion sites major on own-brand products. So by choosing to enter such sites, the customer has effectively already selected her brand of choice.
Searching by price is least common in the food and drink segments – although it is still offered by more than half of top retailers in these groups – while software retailers score particularly poorly on search by brand, which is offered by little more than a third (37%).

There are similar differences with web pages viewed per shopper visit. Footwear and clothing customers are likely to browse through many more pages on each visit than those looking for software – which scored lowest on this metric – music, films and TV or books. Many customers for these low-scoring products may have a specific purchase driving their behaviour, so browse far fewer pages.

Perhaps not surprisingly, top clothing and footwear retailers (both fashion and those in the sports/leisure sector) provide more pictures of their products than those in the food or health products markets. Where a ready-made meal seller may show one or two product images, a garment will be illustrated with at least four. But while fashion retailers lead on imagery they offer the least product information of any segment, with automotive, appliance and software retailers providing the most.

There are also significant differences in how retailers in the various product categories engage with their customers. While links to social media have declined significantly in the past year, with a 9pp fall in the use of social validation, a few retailers are bucking the trend when it comes to enabling shoppers to Like their products on Facebook. In 2017, this attribute was supported by 23% of the Top500. Today only music, film, TV (22%) and software (21%) approach this figure, with all other product segments well below last year’s average. Product ratings, however, remain popular, especially among retailers of sports clothing (72%), homewares (71%) and sports equipment (70%). Product rating are less significant among those selling ready-made food (30%) and fashion clothing or accessories (41%).

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