Retail Best Practices for Targeted Merchandising and Personalization

chinese takeout
Blue Ribbon Chinese by Charles Plaisted

Targeted Merchandising Benefits

Merchandising is the practice of maximizing sales by leveraging product design, packaging, pricing, display, and most importantly, selection. Targeted merchandising selects content (including products and offers) for consumers based on traits such as consumer context or behavior, or based on rules set by merchandisers. Targeted merchandising improves the customer experience and merchant results.

Targeted merchandising has four big benefits:

  • It improves the customer experience by optimizing the customer’s time, and engaging the customer with the most relevant and interesting content.
  • It maximizes retailers’ scarcest resource: customer attention.
  • It increases retailers’ chief goal: revenue.
  • It improves margin by automating the promotion of all items in the catalog, not just the most popular.

When content is automatically selected based on customer behavior, targeted merchandising can triple the conversion rate and drive significant revenue (as much as 20 percent).

Introducing Best Practices and Principles

Targeted merchandising is a relatively new discipline, and not well understood or consistently practiced by merchants. People are hungry for best practices guidance. But just knowing what the best practices are is not enough. If it were, none of us would be out of shape: we’d eat less, and exercise more. When it comes to shaping up your ecommerce site, you need to know not just the best practices but how to achieve the best practices. You need a set of principles that enable you to adapt the practices to your business, your goals, your customers, your changing situation.

Best practices range from small scale decisions to large. A relatively small scale decision is how many recommendations to show on a page. A large scale decision is what strategy should guide the recommendation efforts.

I see three large scale best practices for targeted merchandising:

  1. Establish merchandising strategy and tactics to meet business and customers’ goals.
  2. Establish a management structure to oversee the use of the tactics to achieve business goals.
  3. Establish practices to continuously optimize to improve results, merchandiser skills, and customer experience.

Published by Sue Aldrich

As a leading authority on worldwide customer requirements, practices, technologies, and governance for personalization, Sue researches the technologies and practices that help marketers get the most useful content in front of customers at the right moment: recommendations, search, discovery, targeted marketing, and web content management. Aldrich is an expert on optimizing the methods that help customers find what they need to make buying decisions and/or to solve problems. She helps clients develop personalization, marketing, discovery, and content management practices that will engage customers and improve results.

One thought on “Retail Best Practices for Targeted Merchandising and Personalization

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: