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Best Practice: Establish Merchandising Strategy to Meet Business and Customers’ Goals

June 14, 2012

Precious Pots by Chuck Plaisted

In an earlier post, we listed three best practices for Targeted Merchandising. This post presents the three principles you will use to apply the Merchandising Strategy best practice.

Your business goals should be reflected in every decision you make about your site. Your customers’ goals should be considered in every decision you make. These aren’t conflicting statements: every decision is a compromise of ideals and pragmatism, and design decisions are no exception.

Principle: Align Customer and Business Goals

Your chief business goals are revenue, margin, and acquiring and retaining customers. Customers’ goals vary from visit to visit. The most common goals are as follows:

  • Research what’s on offer to satisfy my need
  • Compare and consider alternatives
  • Buy
  • Realize the benefits of the purchase:
  •  i.      Find out about returns and/or repairs
  •  ii.      Learn how to use a product
  •  iii.      Check status of current orders
  • Review order history to plan future purchases

You will be more successful with your customers – and make them more successful—if you help your customers rather than interrupt and deflect them from reaching their goals. That’s pretty obvious, isn’t it? Well, it is obvious as a theory, but the practice is complicated. It may be difficult to discern from a customer’s path just which goal he seeks. And even when it is clear, your own goals – revenue, margin, acquisition, retention—may distract you from your role as customers’ guide.

You have business goals for customer acquisition, retention, revenue, margin, but if you are helping your customer instead of thwarting him (and your business), you can’t attempt to meet each goal on each page. The most successful approach to reaching this balance is to align customer and business goals, and associate specific goals with specific page types used on your web site, mobile site, or kiosk.

Which goals, for which pages? Your customer context should guide you. If a customer is just about to buy, focus on making the sale rather than getting another newsletter subscriber. If a new customer has just arrived at the site, focus on acquisition, not margin.

Your customer acquisition goal likely lines up with customers’ research and compare alternatives goals, on dynamic landing pages generated when the customer enters from Google, Bing, or a shopping engine.

Your revenue goal lines up with customers who are buying, on the product detail page and the shopping cart page.

Your margin goal lines up with customers researching and buying, on the category and search results pages.

Your customer retention goal lines up with customer efforts to realize the benefits of purchase, on My Account pages, order history pages, and retargeting emails, newsletters, order confirmations, shipment notices, stock alerts, rate your latest purchase emails, and abandoned cart emails.

Please note: all customer goals, and all business goals, could be addressed on any page.

Principle: Establish a Merchandising Strategy for Each Page Type

Your next step is to decide your merchandising strategy for each page type (product detail, category, landing, search results, etc.). Given the customer and business goals that are associated with that page type, what merchandising strategy that will support those goals? For example, when the customer is on the shopping cart page, he may be ready to buy. Your strategy could be to encourage him to complete the conversion by pressing the “checkout now” button. Or your strategy could be to tempt him to add another item to the cart. If you want him to checkout now, you shouldn’t offer recommendations. In this case, recommendations on the cart page would not be a “best practice” for your business.

Principle: Identify Initial Tactics for Each Page

In support of your merchandising strategy, you should identify the tactics you want to try first for each page. Make your best guess –you’ll be thoroughly testing your tactics with real visitors and monitoring what happens. For example, if your strategy for first time visitors on the cart page is to get them to checkout now, your tactic might be to reassure this shopper by telling him what items were ultimately bought by other shoppers like him. Or your tactic might be to mention that the item is so popular that stock is low (if this is true), or that returns are easy. Another tactic would be offering discounted shipping for new customers-or any offer that would help overcome hesitation.

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