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More than ever, online shopping is where customers are. The ongoing COVID-19 pandemic and rules governing the new normal have placed restrictions on physical stores in terms of capacity and available services. Given these restrictions, shoppers are more likely to browse and purchase online than visit a physical store. As 2020 showed us, you can’t stop shopping, you just change the venue. For retail owners, a successful online presence means continued ROI opportunities; and a strong online presence starts with a strong visual merchandising strategy.

Case in point: during 2020’s Thanksgiving celebrations, online sales blew away their physical counterpart. Store visits during Black Friday, a traditional crowd drawer, went down 52%. In contrast, online Black Friday shoppers spent a mind-boggling 116.6 million hours glued to online stores. Online sales grew 21.6% from 2019 to log $9 billion dollars. And that’s just for one day!

More and more people are replacing the shopping cart with a virtual one. In the US, eCommerce sales are expected to reach $740 billion by 2023.

With this in mind, are you confident your digital commerce store generating a healthy return on investment? Here’s how a visual merchandising strategy can help.

Table of Contents:

ROI Determines Success

A healthy ROI rate can spell the difference between a struggling business and a smoothly running one. The rate of return from an investment often reflects the efficiency of your venture. The better and more efficient the performance, the higher the ROI.

Digital commerce stores are no different from brick and mortar shops. Outside of the inventory to sell, you need to invest in a storefront (a website), a showroom (online catalog), and a point-of-sale system (online payment). If these components succeed in complementing the product you’re selling, wouldn’t you say you made a good investment? As a bonus, if all the parts of your store work as expected and with minimum intervention, that means you’re selling more and spending less.

For digital commerce stores, the return on investment will depend on the efficiency of how the site operates. Sure, it’s easy to have everything automated by hooking up to an eCommerce platform, as they have all the tools and services provided. Of course, the downside of this deal would be handing over a bigger part of the profits to the platform. We all know how this affects ROI.

measure roi with visual merchandising
A healthy ROI is often the best indicator of business success.

More Money In = Less ROI

Throwing money at a problem might eventually solve it, but the ROI suffers as a result.

Traditional visual merchandising often takes care of the store’s insides and surrounding areas to enhance and promote a desire to spend money. The same principle applies to digital commerce, but more in terms of a site’s ease-of-use, attractiveness, and availability of information. Among the top three considerations online shoppers look for when making online purchases are:

  1. Ease of checkout (81%)
  2. Variety of brands and products offered (80%)
  3. Number of shopping options offered (73%)

Having one or two of these features in your digital store can help bring in more shoppers. Having all three? That could spell the difference.

Business owners and retailers know this too well. There are plenty of things they’d like to incorporate into their digital shops. And they would be glad to do so if they had the tools readily available. Every business wants to provide the ultimate shopping experience, but few can or are willing to make the changes that are needed.

Unfortunately for most retailers, the initial reaction to any problem is to throw money at it. While throwing enough money often solves the issue in the short-run, it also means you’re spending too much to sell the same number of products. Once costs rise and efficiency remains the same or even decreases, the retailer often ends up holding an empty bag. Sure, targets are accomplished. But then, ROI tends to evaporate.

What Online Shoppers Want

On the opposite end of the spectrum, there are retailers that continuously tweak their digital commerce stores to keep up with the latest trends or to provide a new feature. With a visual merchandising strategy, you can easily adapt your campaigns to the will of the people.

Most customers want a hassle-free transaction. They go online shopping to avoid the hassles of the real world; like driving to a store, and waiting in line. Similar to the real world, there are turn-offs that make a customer abandon their cart midway. Consider the facts: according to the Baynard Institute, the top three reasons US online shoppers abandon their cart are:

  1. Additional fees
  2. Needing to create an account
  3. Complicated checkout processes

Just simplifying the payment process can lead to improved sales. In fact, the average eCommerce site’s conversion rate can improve by 35% just by improving the checkout process design.

Common Merchandising Challenges

professional frustrated with work
Reduce workplace headaches and try a visual merchandising strategy!

Even before reaching the checkout page, there are plenty of reasons why online shoppers won’t proceed with the sale. Merchandising is the lost art of enhancing visual, tactile, olfactory, and other sensual cues that can nudge a casual browser into an impulse buyer. The rules of digital commerce sites are similar to brick and mortar stores, but online stores are a bit more limited. Visuals will play a big role, but they won’t be working alone.

1. Platform Proficiency

Seasoned merchandisers know by instinct which items to put in the front row displays, which items may need additional push through markdowns or special offers, and which ones need to stay hidden (at least temporarily). Transferring that inherent knowledge into the digital store shelves depends on the merchandiser’s proficiency. Not just in the art of merchandising, but also in using various tools and platforms used to manage an online store site.

Often a team is needed to manage an online store’s merchandising needs. The process of maintaining, updating, and filling the online catalog can be both tedious and time-consuming.

2. Collecting and Consolidating Product Data

Another challenge is collecting and consolidating product data acquired from various sources. Often, the merchandiser needs to check different sources for a single item’s inventory, sales data, analytics, and social media scores.

Armed with all this knowledge, the merchandiser now needs to integrate all this information and decide on what to do with each item in the inventory. The bigger the product line, the bigger the amount of data accumulated. Multiply each product by their number of SKUs in sizes, then by colors, then variants, etc., and you’ll get the idea.

3. Making Use of the Analytics

Then, balance that information against the latest data on sales performance, social media scores, store analytics — all of which are gathered from other sources. The bigger the store, the more monumental the challenge for digital merchandisers. Only then, can a strategic decision on how to rearrange the products on the website can be made.

Sure, it can be done. It can be done well, but it won’t be cheap and it won’t be fast. Did we say tedious and time-consuming? Plus, did we also mention how all the added manpower and hours can affect the bottom line?

How Smart Merchandiser Boosts ROI

To help address the challenges of online merchandising, Zobrist Software Group developed Smart Merchandiser, a visual merchandising tool used by online businesses and retailers to manage the products in the online store.

Smart Merchandiser lets you quickly and easily reorganize a product catalog through automated business rules or manually drag and drop products. In addition, the software empowers digital merchandising teams to make informed display decisions by making all relevant data available with the click of the mouse. This saves enormous amounts of time, money, and effort for merchandising teams while providing updated catalogs and improved shopping experiences for customers.

Top 4 ROI Benefits of Visual Merchandising

With Smart Merchandiser, realizing your target ROI becomes easier. The visual merchandising tool provides four benefits that can improve your online store’s efficiency while keeping costs at a minimum. Smart Merchandiser can help address:

  1. Out Of Stock (OOS) issues
  2. Business automation for increase productivity
  3. Platform customizations for improved customer experiences
  4. Efficient merchandising to boost conversions

1. Out of Stock Issues

avoid oos with visual merchandising
Whether online or offline, nothing is more infuriating than looking for an item only to find it is out of stock.

Nothing is more infuriating to both retailers and customers (both online and in the real world) than learning that an item is out of stock. For retailers, out of stock items (or stockouts) mean a lost opportunity for sales, a potential loss of customers, and negative feedback. For shoppers, it’s combined frustration and disappointment, especially when the customer went all the way to visit your site only to waste their time spent there clicking on an item that’s not available.

Of course, losing a customer is often a problem that leads to more problems. If that customer finds the OOS item on another retail site, there is a high degree of probability that the customer might abandon your site in favor of the new retail site. Then, by word of mouth, the customer tells another buyer and so on and so forth. The journey from a single customer to a loss of market share is possible if stock-outs are commonplace.

In addition, stock-outs often trigger a knee-jerk reaction where retailers contact the supplier for an emergency refill via expedited delivery. This means additional cost to sell the same item at the same retail price. This method, while saving face with the customer, leads to less efficient operations and lesser ROI.

Visual Merchandising Helps Avoid Stock-Outs

Smart Merchandiser features an inventory management tool that helps identify potential stockout problems even before they happen. The software includes three features that help you avoid not just a one-time sale loss, but also eliminate or mitigate the damages from repeated out of stock issues.

Visual OOS Alerts

The visual OOS alerts trigger a notice when they detect products that have low inventory. Realizing that not all products have the same demand, each item can be assigned its own low inventory threshold. When a product’s stock registers below the threshold, an orange bar will appear on the product image, prompting the merchandiser to adjust the display properties, initiate a reorder, or take other action. A completely out-of-stock item will display a red bar.

In addition, Smart Merchandiser sends alerts to notify merchandisers when OOS (Out-of-stock) conditions happen or when inventory is back-in-stock. The alerts can be customized to the merchandiser's preference of email, text messages, and even Slack channel. Merchandisers can also select the core products and core size they would like to monitor and how often the alerts should be sent. These alerts are actionable insights so merchandisers can click right into the OOS product set and merchandise them accordingly.

Product Display Page Automation

In case stock flies off the shelves, a visual alert won’t help much. Instead, Smart Merchandiser will automatically move out of stock items to the bottom of the catalog page, leaving the space above-the-fold for products that can be purchased immediately. This places the OOS item as far away as possible from available items, lessening the chances of a disappointed customer while increasing the chances of impulse buys from alternate product offerings.

Analytical Overlay for Monitoring Sell-Through Rate

Smart Merchandiser’s analytic overlay identifies sell-through rate and compares it with planned or expected rate of sales. Keeping track of the sell-through helps merchandisers identify which items are fast-moving, giving them an earlier time to decide on when to replenish inventory and avoid add-on charges for special reorders or expedited delivery. In addition, it helps avoid a glut after the demand for the item passes, which may require price offs or promotions.

Anticipating stock-out issues before they happen gives more opportunities and time to resolve the matter. This visual merchandising technique helps you avoid costly emergency reorders or deliveries, and prevents your site from damaging your store’s reputation. With the avoidance of added cost and the potential for lost sales, your ROI remains safe.

2. Increased Productivity through Automation

roi benefit automation
Automation, when done right, helps complete a catalog that features thousands of products with different variants, sizes, and colors.

Managing a successful business with a catalog of thousands of products can be a nightmare. Then the additional horror of manually arranging each product’s SKU, size, color, and other variants will definitely require additional team members and a sizable number of hours to complete. Given the repetitive nature of the sequencing, manually performing this task can also lead to errors or oversights. When this happens, it’s back to square one again.

In addition, consolidating product information from different sources will add more time and effort in the merchandising process. A small shop with a few dozen items should be no problem. But, multiply that with a hundred or so products that come in different models, and you’ll find your team overworked, stressed, and error-prone. Then, after completing this laborious task, imaging having to do it again because somebody missed something.

Manual sequencing is out. Instead, visual merchandising can apply sequencing in real-time via a single interface. Instead of sequencing each product one by one, you have the option of automating item sorting and sequencing. You can apply business rules to determine how products get sorted, and how each item is displayed by default. In addition, you can get a preview of how the finished catalog would look, allowing your team to go over the whole thing before committing to go live.

Automating the merchandising sequencing process increases efficiency and reduces errors and oversight. The reduction of additional manpower and hours in creating, updating, or revising an online catalog not only saves time and money but also allows your team more time in developing strategies that can potentially rake in more revenue. At the least, you can safeguard your target ROI. At best, increased productivity can lead to increased revenue.

3. Avoiding Costly Platform Customization

man frustrated with computer
Personalizing an online store can be a catchy way of enhancing customer experience, but it often can be expensive as well.

Using standard eCommerce platform tools and services, personalizing your online store will entail a whole body of work. Upon review, let’s say you determined that in order to display a more accurate version of your envisioned product listing page or product detail page, you will need modifications in the platform software or catalog via coding. This will entail getting the services of a third party agency that will fulfill your custom code requirements for a fee.

This happens more often than you think. Some products need to show their full range of available colors. In some cases, the same product should display a different default color for men and a different one for women.

Instead of sourcing for outside manpower to provide custom coding options, Smart Merchandiser provides these services completely built-in. The visual merchandising tool’s full range of customization options takes into consideration each product's SKU, size, and color so that you can assign the business rules you see fit for the display.

How does this work for ROI? Additional services that will require additional expenditures are eliminated. Smart Merchandiser's built-in customization options can provide the benefits while avoiding add-on costs. Again, with revenue saved due to cost avoidance, the ROI remains on target. Even better, there is even a possibility of increased revenue due to the enhanced customized displays.

4. Increased Conversions

The ability to discover which product is popular and having the ability to move the product’s display up front is a merchandiser’s wildest dream. Given the right tools, merchandisers can see who’s visiting the online store, what products are getting the most attention, and which ones are actually being bought. Knowing these pieces of information in real-time allows them to develop a targeted approach to these customers and plan a more effective campaign.

Sites featuring improved customer experience (CX) make online purchases easier and thus increases the conversion rate. Providing customers with a constantly updated store catalog that not only displays products but provides accurate information on their SKU, color, and size availability. Customers will appreciate finding that their target item for purchase is available. If they see the stock falling, they might get inclined to purchase at that very instant to avoid losing out.

In addition, gathering analytics from customer behavior on the sites allows the merchandising team to gather more insight into the products. They can see which items are constantly being viewed, and which items get picked up but dropped down. The team can gather these insights and adjust the site in real time to conform more to customer preferences. This can lead to increased conversions as more and more shoppers see what they like up front.

How Smart Merchandiser Helps

Smart Merchandiser provides a level of analytics and information that allows the merchandising team to adjust store contents to fit the mood of site visitors and increase the chances of conversion. Customers receive an improved online shopping experience if the team is quick enough to respond to changes in the mood or disposition of the customer base or marketplace. This includes getting feedback from connected social media platforms.

As this feature is standard in Smart Merchandiser, no additional cost outlay is necessary to achieve increased conversions. This means the protected ROI remains protected, and any positive reactions to the improved customer experience can lead to even increased revenue. Smart Merchandiser helps lead to better ROIs by helping address out of stock issues before they happen, increases productivity through automation, avoids costly platform customization, and increases conversion.

Advantages of Smart Merchandiser

smart merchandiser visual merchandising
Smart Merchandiser’s visual catalog management offers drag and drop functionality.

Visual Layout with Drag and Drop Features

Smart Merchandiser arranges and lays out products via drag and drop with full control. You can sort products automatically by setting business rules. Or, you can assign attributes that let the store display default colors or styles.

Built-in Product Information

Smart Merchandiser also collects and stores product information and insights to help product teams decide on sales strategies on the fly. This includes learning which products fly off the shelves and which ones don’t move at all. Knowing each item’s current inventory greatly improves the team’s ability to decide on what strategy or promotion to apply. Alerts that warn when an item’s stock is running low can help remind when it’s time to contact suppliers for a restock.

Insights and Analytics

In addition, Smart Merchandiser can incorporate analytics and social scores to provide better insights into individual products. With a single glance, sales and merchandising teams can find out which products get the most views and which ones get abandoned at the shopping cart. Data from analytics can help plan your next marketing strategy, or guide your attrition plans. Smart Merchandiser also incorporates social media scores from Facebook and Twitter to see which items are generating engagements and being talked about, and which ones are getting bad press.

Improved Productivity

Smart Merchandiser’s drag and drop ease of use and automated features can improve not just your customer’s online shopping experience, it also saves the merchandising team a lot of hours going over data and arranging the product displays. In fact, fully utilizing Smart Merchandiser on your static website can boost productivity among your team by up to 70%. At the same time, it can increase your site’s revenue by up to 20% by providing a more enjoyable shopping experience.

Visual Merchandising Features to Improve Your Digital Commerce Strategy

digital commerce visual merchandising
Analytics information is displayed as an overlay, making it easier to look up product data.

Smart Merchandiser features intuitive tools that help merchandisers and retailers web page layouts that incorporate data analytics.

Automated Business Rules

Automated business rules help optimize category pages automatically using custom sequencing rules. This allows you to customize how products and categories are laid out and which attributes are used to sort the items. Advanced business rules let you combine multiple rules for every more pinpoint merchandising. Automation allows you to schedule business rules to keep the catalog dynamic.

Visual Catalog Management

Creating the catalog is easier and more intuitive thanks to drag and drop functionality. Product thumbnails let you easily identify products so you can arrange them more efficiently. Copy and paste features apply to products so you can add them to multiple categories.

Analytics Management

Smart Merchandiser provides improved data analytics that display right over the product images. This includes information on page views, abandonment rates, conversion rates, and sales revenue. The overlay display removes the need to switch between layout and the data, allowing for quicker utilization.

Inventory Management

Smart Merchandiser’s inventory management feature tracks stock of each item and displays it accordingly. This leads to optimized inventory levels that are reflected in storefront layouts. Customers also appreciate updated stock levels. Better manage and optimize inventory levels, leading to improved online storefront layouts and customer experiences. Smart Merchandiser also has three levels of inventory alerts, which notifies merchandisers if an item is low, out of stock, or if it’s selling as projected. In addition, Available color inventory displays how much of each color is the item available. This lets you adjust the storefront display to show which colors need push and which ones need hiding due to zero stock.

Color Management

This feature allows merchandisers to adjust online displays to promote or minimize items in certain colors based on season, inventory level, or current popularity. Color swatches can also be arranged automatically or manually using drag and drop. Finally, colors can be arranged based on category, so that the color displayed for the same items features in different colors for each market segment.

Attribute Management

Smart Merchandiser can arrange and edit attributes for each product. This allows for easy adding, removal, assign or manage departments, colors, materials, and other keywords and attributes with a single click. Attributes help tag items so they can be easily searched or filtered. Product attributes are presented using a visual layout instead of the usual spreadsheet.

Cross Country Replication

Smart Merchandiser allows replicating the merchandising process across each country, instead of manually redoing the same for each location. Afterward, you can now modify the items based on the country’s specifics.

Social Media Awareness

Smart Merchandiser can incorporate insights, scores, and feedback from social media applications and review sites into each product. Like analytics, information on social media scores is overlaid in the product display.

Integrating Smart Merchandiser With Your Platform

Smart Merchandiser runs on the IBM Websphere Commerce platform, supporting WC V7, V8, and Commerce on Cloud (CoC 16.3.9). However, Zobrist understands that there are other eCommerce platforms out there. This is why the company can offer custom solutions that cater specifically to your choice of platform and integration.

Maintain and Increase Your ROI with Smart Merchandiser

The digital merchandisers of today require a solution that provides an attractive visual storefront that’s powered underneath by an analytics engine that gathers information in real-time. This allows retailers to base their merchandising decision on what the market currently wants right now and want your store has on hand. This saves time and resources in keeping up with what the market wants. At the same time, it saves customers from visiting your site only to find the item they want out of stock.

Smart Merchandiser is the only visual eCommerce merchandise management solution that helps ensure a healthy return on investment for your online store. It uses a client's products, visual details, and information with IBM WebSphere Commerce’s data analytics with each retailer’s visual product details to provide an all-in-one solution for all online store merchandising requirements. It overlays all analytic, inventory, and social media data on product images to provide a visual catalog that contains important information about the products. Based on the data, merchandisers can then react and modify the story and the catalog based on real-time insights.

Smart Merchandiser has been proven to increase productivity among eCommerce merchandising teams by as much as 70%. It eliminates the need to keep up to 7 reports open for deeper analytics insight. And it helps eCommerce teams increase current conversion rates by as much as 20%. For more information about integrating Smart Merchandiser into your online store and reaping the ROI benefits, leave us a note or contact us.