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Performance area reviews: Merchandising

When it comes to merchandising it’s pretty obvious to conclude that product is key and instore retailers will soon notice shelves bulging with unsold product and a customer that’s passing by without a second glance.

Online however it’s not so easy but is still key to aiding conversion. In a competitive world – where customers can literally shop anywhere for anything retailers have to work hard to stand out from their competitors and offer something truly different.

“For us product is key and we source products from all over the world including exclusive products that are not on the high street or available anywhere else online,” says Walls and Floors web development manager Tom Murrell. “We use a host of tools to analyse the market and product demand and this then goes directly to our sourcing team,” he says.

The right product means nothing however if it’s not merchandised correctly. Again it’s something that retailers have always worked hard on instore. And yet despite spending huge amounts of time and money on investing in understanding the role of merchandising instore retailers often overlook its importance online and can let themselves down through the simplest of errors. “In terms of the actual products and product pages, costs, descriptions, images and availability can all deter consumers from becoming customers,” says Lee Howard, head of analytics at Practicology.

In our Top 500 report it was John Lewis who led the Elite pack thanks to the way it showcases its goods online and thanks to the fullness of its range in the first place. It showed that John Lewis focusses on a constant newness of product to maintain customer interest and ensure customers keep coming back to check on its latest range offers. This means customers don’t get bored and essentially keep returning and – as a result – keep buying.

And yet online it’s easier than ever to test and merchandise new lines. For Walls and Floors conversion rate optimisation is an important way of testing new design options. The company regularly trials new designers via multivariate and A/B testing to play new designs off each other and to test on a percentage of its online traffic. “The aim is to keep learning, taking away what works best and optimising,” says Murrell.

When it comes to visual presentation John Lewis scored the highest a retailer could with a maximum 26 out of 26 in the index value for its product presentation. Retailers including ASOS, Topps Tiles and eBuyer who were also rated in the Elite group were also commended in their acknowledgement of the importance of product information and presentation in getting customers to convert – even when that can be something as simple as stating that an item is machine washable.

Getting the look and presentation of products right online however is not easy since so many variables are in force. This means that retailers have to focus heavily on imagery, onsite colours and sizing to aid conversion – a fact supported by the research for this report.

At fashion retailer Joe Browns head of ecommerce Seb Villien says improving imagery on site is one of the key focuses for the online and mail order brand this year. “We are working on improving our photography as we realise having additional shots will definitely help conversion,” he says.

At ASOS the company has a team of 20 regular models who can boost conversion rates long term. Experimentation by the retailer has also shown that reshooting the same product but using a new model can radically affect sales with instances where such a tactic has improved sales by 400%. The company has used a data driven approach to understand how to make such decisions around product presentation – most recently working within menswear to do so.

Apart from not being able to touch or feel products online the next problem retailers obviously face is their customers not being able to try on goods and assess sizing. As a multibrand retailer fashion heritage online site Country Attire managing director Richard Parker says sizing is a particular challenge – not just for his business but across the clothing sector. “Sizing is a big issue for fashion – getting that right and getting that across to the customer,” he says.

The company has already worked with a virtual sizing business in the last couple of years to try to assist its customers and says this will be a key focus for boosting CRO in 2015 too.

For a category that relies so heavily on customers visualising how an item of clothing will look on them the Top 500 research confirmed the fact that this is an area that fashion retailers excel at since without great merchandising capabilities few customers will convert.

The best in this category were proven to have presentation covered from every angle – making it easy for customers to find the goods that they were looking for and easy to picture whether they were suited for their needs or not. Such retailers also complemented the presentation of products with additional product information, answering potential questions before they were asked with their provision of information and then answering questions that did arise through a proactive customer communication route – such as being responsive on social media.

Our Top 500 report predicted that 2015 will deliver yet further innovation around explaining how products work and how they may sit within a customer’s lifestyle- from grocers using recipes to inspire purchase behaviour to increased use of video online – both for inspiration and instructional functionalities. Personalisation is also likely to be key here as retailers work harder than ever to present product that is as relevant as it can be for the individual customer rather than simply the mass market customer. Get all these things right and put into practise the merchandising principles that retailers have relied on instore for so long and conversion can only follow.

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