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The importance of AI merchandising is growing rapidly. We know that product merchandising is key to successfully promoting products for both brick-and-mortar and online stores. It refers to the strategic, visual arrangement of products, offers, and pricing to influence consumer purchasing decisions. With the right product merchandising strategies, you can boost traffic, increase consumer spending, and drive sales. It also enables you to have better control over your inventory, thus reducing waste.

AI merchandising

Product merchandising is an umbrella term that includes several strategies to boost brand recognition, increase sales, and improve inventory turnover, all while elevating the customer experience. Though time-consuming and tedious, all of these things are crucial for the growth of any eCommerce business. Fortunately, with AI merchandising, you can expect more efficient results while saving precious time and energy to better serve your business elsewhere.

How Does AI Merchandising Work?

Product merchandising is a group of activities that focus on providing the right products to the customers at the right time. As customers today have the luxury of purchasing a product from any part of the world and getting it delivered the next day, retailers need to predict customer behavior and cater to it if they don’t want to lose them to competitors. A good salesperson in a brick-and-mortar setting should also be able to guess their customer’s desires. By integrating AI into your merchandising system, you can leverage the latest technology to create a dynamic user experience that can quickly predict a buyer’s next move. As valuable as merchandise planning, pricing, and inventory fulfillment are, there is a lot more to AI merchandising.

From pre-season to in-season promotion and product selling, AI merchandising offers countless benefits to retailers. For example, in pre-season planning, AI merchandising enables retailers to create a more comprehensive financial forecast for buying inventory. As AI provides updated data (demand, preference, color, brand, size, etc), retailers can use it to make better decisions. Better pre-season planning paves the way for higher in-season profits.

Accurate buying and allocation during the pre-season results in having relevant inventory–which makes product merchandising more successful during the in-season. Accuracy throughout the pre-season helps retailers to avoid both overstocking and out-of-stock costs. AI merchandising also helps eCommerce platforms save millions of dollars by avoiding promotional miscalculations.

With the help of AI merchandising, retailers can increase profits and curate uniquely tailored buying experiences.

AI Merchandising Benefits

AI has been the next ‘it’ thing for some time, and the upsurge in eCommerce growth during the pandemic finally paved the way for AI merchandising to enter the retail industry. AI is rapidly evolving through the consumption of different data points. Being fairly accurate in predicting consumer behavior enables storefronts to feature the right products on the homepage, boost underperforming products, help with inventory, and more.

AI Merchandising

AI integrate product merchandisers, like Smart Merchandiser, enabling retailers to increase their revenues quickly. The household name, JanSport, used Smart Merchansider to organize its online storefront after it shifted to the eCommerce space in 2013. After a successful first year, JanSport’s eCommerce director soon realized the need for a tool like Smart Merchandiser to help them with product cataloging.

There is far more to AI merchandising than just cataloging, like:


All the products need to be categorized for easy classification and mapping. You can efficiently classify your products and compare them to those of your competitors. This will enable you to review your existing categories and then give you the freedom to add or remove some based on your customers’ expectations.


Original yet relevant content is the backbone of driving organic traffic to your site. With more companies competing for user engagement, strategic content forms an invaluable part of your merchandising strategy. AI tools can help you keep up with this demand.

Whether you write product descriptions, blogs, social posts, or repurpose user-generated content (UGC), the right tools help you generate and optimize content for the most effective outcome. AI Merchandising tools can generate hundreds of topic ideas and keywords within seconds. This gives you a strategic base for keyword use, popular topics, and linking opportunities to boost organic traffic to your site and establish you as a market leader in your niche.

Pricing Decisions

Previously, pricing decisions were made based on historic sales-based trends. Given how quickly digital shops adapt to changes in competitors’ prices, making price decisions using old data can leave you in the dust. AI can identify price patterns and suggest changes that can help you increase sales.

Product Discovery

Product discovery is about making it effortless for browsers to find what they want (or don’t yet know they want). AI tools make this possible by building customer profiles for personalized marketing. AI interprets data such as purchase history, abandoned carts, and product page views in real-time. This drives a clearer customer journey and increases order values with upsells and cross-sells.

When users are shown irrelevant products or cannot find what they are looking for, they head straight to a competitor's site. An AI-powered search, whether by voice, image, or text, will give the user accurate results, which leads to improved customer experiences and reduced bounce rates.

Will AI Eventually Replace Traditional Human Merchandising?

The entry of Artificial Intelligence (AI) into the retail industry has been long-awaited. AI merchandising focuses on more than just top-line sales, store size, margins, volume, etc. While AI merchandising is here to make store maintenance easier for retailers, some are concerned if it will replace humans altogether.

human vs AI

So, will AI replace traditional human merchandising? It’s likely, but not in a way you may think.

eCommerce platforms make life simpler for consumers. Now, people can shop from the comfort of their homes, compare prices, and see reviews. This convenience is also making consumers more demanding. They want new trends and they want them now! To keep up with these trends, most retailers have to look beyond manual merchandising, as they can’t keep up with such rapid changes.

Most retailers are supported by CPG manufacturers for optimizing product categories. Together, they attempt to find gaps in the inventories or identify products that perform well or badly. Despite their best efforts, many product categories remain unoptimized simply because humans can't be as accurate as AI. This is largely because humans rely on previous data while AI focuses on future predictions.

AI does, however, have its limitations. Creativity, empathy, cultural context, and passion are human traits that machines lack. Although AI can guide a masterful strategy, authenticity is the human factor behind your brand message. Computers can tell you what customer demands, trends, and needs are, but it is up to you to make an emotional connection with them.

Moving forward, retailers will rely on AI. But, it is important to understand that it will support humans in merchandising, not replace them!

The Bottom Line

Merchandising is rapidly changing, and it's up to the brands to ensure they continue to strategize in line with ongoing developments. AI merchandising is accurate, fast, and reliable. It enables retailers to understand shopper insights much more efficiently. With AI, brands can understand trends and customer behavior more deeply.

Smart Merchandiser has been helping retailers incorporate AI into their eCommerce platforms. Offering a new way of managing your digital store, Smart Merchandiser allows retailers to efficiently analyze their inventories, establish better customer relationships by identifying their needs, and organize a visually appealing store.

Organize your digital store with AI merchandising. Integrate AI with product merchandising to accelerate your revenues. Book a Smart Merchandiser trial today.