Step-By-Step Guide to eCommerce Merchandising

The modern customer is more empowered than ever. When we can access practically limitless stores and make transactions without ever leaving our couch, it’s natural that people have raised their expectations of online retailers.

What’s more, eCommerce is still changing and evolving — and fast. With the popularization of artificial intelligence and advanced analytics, consumers’ standards continue to shift.

Getting eCommerce merchandising right is key to creating seamless customer journeys and memorable user experiences that keep online shoppers buying.

In this in-depth guide, you’ll discover the basics of eCommerce merchandising, understand its benefits and learn the steps to implement it effectively.

What is eCommerce merchandising?

Essentially, eCommerce merchandising means efficiently promoting and selling your products and services on a website. The goal is to guide buyers through a smooth journey and a memorable shopping experience so they become repeat customers.

Beyond knowing what eCommerce merchandising is, there are several crucial elements to getting it right. These include optimizing product listings, utilizing data-driven insights, crafting compelling product descriptions and strategically implementing promotions.

Why go through all that effort? Below are several compelling answers.

The importance of eCommerce merchandising

Think of eCommerce merchandising as a strategy to set your business apart in a continually evolving competitive scene. When done right, eCommerce merchandising transforms casual window shoppers into loyal customers.

As empowered as the modern consumer is, they’re also swamped with options. They need all the guidance they can get.

Suppose someone in your target market takes an interest in your handcrafted ceramics after seeing samples on your Instagram page. They eventually stop looking — but every couple of days, they get similar product recommendations fed to them by the social network’s algorithm.

To decide between brands, they search Google and Reddit to read comparisons of different ceramic brands. Those opinions weigh heavily on the person’s eventual purchase decision. The lesson here? With all the detours customers take before buying, there’s a big chance they won’t end up purchasing from you.

That’s where eCommerce merchandising turns the tide in your favor.

Laying out a seamless customer journey

A 2023 Salsify report explained that the modern consumer uses several platforms to research products — for example, they’ll check a combination of Amazon, search engines, online shops and retailer apps before buying.

Effective eCommerce merchandising means analyzing the data you collect from your target market. Then, by anticipating their behavior, you can make their buying decision as engaging, simple and easy as possible.

Leaning into the convenience of online shopping

Consumers follow the path of least resistance, so business owners need to make their shopping experience convenient. Two-thirds of consumers consider convenience and ease of purchase the top two factors in their buying decisions.

Whether it’s finding something suitable in a product catalog, making transactions or seeing a package on the doorstep, who doesn’t want their shopping done fast?

The best eCommerce merchandising strategies incorporate an online website that’s easy to navigate, even on a mobile device. Consumers increasingly rely on personalized recommendations and searchandising (search merchandising) to make quick purchases.

Boosting brand loyalty

Brand loyalty is a powerful driver of business growth because it encourages repeat purchases and generates positive word-of-mouth. In other words, fostering a loyal customer base is the solid foundation for long-term success.

Customer acquisition is satisfying. Yet, retaining customers is more profitable. In fact, a 2022 study found that customer acquisition costs have increased by 222% in the last eight years.

On the other hand, gaining customer loyalty has gotten more challenging due to inflation and rumors of an impending recession. According to the Salsify report cited earlier, 96% of consumers say rising costs have influenced their purchasing behavior.

Still, the study shows that even during economic downturns, 81% of consumers become loyal to brands that deliver superior quality, while 55% support brands that provide value and exceptional online shopping experiences.

And guess what? eCommerce merchandising is one of the best avenues to earn loyalty from customers.

Attracting the right buyers

Imagine a travel agency’s storefront. They showcase brochures of exotic destinations and thrilling activities to attract people who crave adventure and escape. In the same way, an eCommerce merchandising strategy is crafted to attract a specific audience.

Since there are seemingly unlimited choices of platforms and media sources to advertise on, and every consumer has their favorites, reaching your target audience can take a ton of work. Even online, you can’t be everywhere at once.

However, this presents an opportunity for brands with a great eCommerce merchandising strategy. With the right tools, you can gather, measure and analyze customer data across multiple touchpoints.

The insights you’ll gain can be used to make a shopping experience unique to each person. How? eCommerce personalization tools like Yieldify, Kibo and OptiMonk can curate product recommendations based on each individual’s preferences.

To better understand your ideal customer, start with the following seven steps to eCommerce merchandising.

eCommerce merchandising best practices

Like any good plan, your eCommerce merchandising strategy should involve distinct steps and best practices.

1. Understand your customers

“Understand your customers” is cliched marketing advice by this point, but that doesn’t make it less true. In fact, in a digital environment where consumers move on a whim between multiple platforms and media sources, understanding your customers is more crucial than ever.

Here are tried-and-tested methods to help you understand your customers better:

• Conduct market research using a combination of primary sources (e.g., focus groups, surveys and in-depth interviews) and secondary research (e.g., reports, marketing statistics and internal sales).
• Use heat mapping tools like Hotjar, Mouseflow or Crazy Egg to track visitor interactions and learn exactly how people use your website.
• Implement artificial intelligence in eCommerce merchandising. For instance, predictive analytics turns user data into accurate forecasts of what your target audience will do.

And remember, the goal of learning your customers is to provide them with a cohesive brand experience that takes them from awareness to conversion to repeat purchase.

2. Choose the right products

An old saying goes: “If you try to be all things to all people, you won’t be anything to anybody.” The same holds true when you’re selling; the better move is to solve a specific need for a specific type of person.

This is only possible once you understand your target customers enough to know their pain points, desires and dreams.

With that understanding, identify a specific product (or design a new product) that makes your target buyer’s life better in some way. That’s a product they’ll seek out and keep buying.

3. Optimize your product pages

It’s time to create sale-generating product pages. After all, presentation is key in eCommerce as much as in physical retail stores.

Just as brick-and-mortar stores aim to entice visitors to step inside, an eCommerce store should have product pages and category pages engaging enough to keep people interested.

To help get you started, here’s a breakdown of the essential components of a product page:

To ensure your product pages grab and hold the attention and desire of your audience, implement the following tips:

• Hire professional copywriters: A pro copywriter will craft amazing product descriptions that effectively communicate the benefits of your products in ways that will resonate with the reader.
• Use gallery plugins for photos: Customers need confidence in what you’re offering before they commit to buying. Use gallery plugins to add enough high-quality photos for the shopper to feel assured.
• Use honest reviews: Genuine customer feedback builds trust within new viewers. Encourage satisfied customers to share their experiences and thoughts so you can display social proof that your products are worth buying.
• Implement split testing (also called A/B testing): Experiment with different versions of page elements. Come up with alternate headlines, product images and calls to action. Later, check which performed better, figure out why and take advantage of it.

4. Create a compelling homepage

When customers visit an eCommerce website, the homepage is where they immediately sense whether staying will be worth their while.

This is why eCommerce merchandising includes creating a compelling homepage. True, the critical conversions happen on product pages and landing pages. However, your homepage will do the hard work of establishing the trust needed before viewers bother browsing your products.

As with any storefront, getting the website structure right is important. Here’s how to craft a homepage that captivates your audience and gets conversions:

• Convey your brand’s essence by incorporating your logo, brand colors and unique selling proposition.
• Make your website’s navigation intuitive and user-friendly. Keep the overall structure simple, then look into adding internal search and breadcrumbs.
• Arrange homepage sections logically by placing key elements where they’re most likely to catch your audience’s attention.
• Use high-quality, compelling visuals. Spend time crafting engaging headlines, titles and taglines.

5. Deliver competitive pricing

In a bustling online marketplace, competitive pricing can do far more than attract new customers and drive more sales. It also drives brand loyalty among your target audience.

According to Salsify’s 2023 Consumer Report, 62% of people prioritize competitive pricing when deciding where to shop online.

Since eCommerce is known for its relatively low startup costs and minimal barriers to entry, you have a ton of rivals. The hard part is running an eCommerce business with competitive pricing without compromising your profit margins.

To find that just-right price point where customers get real value without feeling overcharged, adopt Goldilocks pricing. This involves testing different pricing strategies (e.g., cost-based, competition-based and value-based) to find that sweet spot where you maximize both sales and profits.

And don’t overlook artificial intelligence — at this point, AI-driven tools can automate dynamic pricing for you, based on analysis of real-time market demand, pricing trends and inventory levels. Setting competitive rates is quite doable, even in a rapidly changing market.

6. Measure your results

Is your eCommerce merchandising strategy working? There’s only one way to find out: Measure your results.

To accurately measure your results, you must establish SMART goals — that acronym stands for specific, measurable, achievable, relevant and time-based. Here’s an example: Increase your monthly revenue by 15% within the next six months. Here’s another one: Reduce cart abandonment rates by 10% over the next quarter.

Once you’ve set a SMART goal, identify key performance metrics to track whether your eCommerce merchandising efforts produce favorable outcomes. Read up on the following key metrics to discover the best measure of your progress:

• Conversion rate: The percentage of website visitors who take an action desired by you (e.g., make a purchase, download your ebook or sign up for your newsletter).
• Cost per lead: The average amount of money you spend to aquire a new lead.
• Cart abandonment rate: A measure of how many times users had items in their shopping cart but exited your website without buying them.
• Customer lifetime value: The total revenue you expect from a customer throughout their entire relationship with your business.
• Cost of acquiring new customers: The total expenses costs incurred, on average, for each customer gained.

Once you’ve decided on what to track, set up Google Analytics for your eCommerce site. When the data’s rolling in and you can analyze it, you’re more likely to make the right decisions and nail your digital merchandising strategy optimization.

Consider consolidating your website management and analytics data on a single dashboard. The Bluehost Builder lets you link your Google Analytics account to your website so you don’t have to switch between platforms just to consult your data.

7. Stay relevant across several channels

As you know, there’s no point sitting idly while your target audience hops across the internet, contemplating which brand to buy from.

If you want that purchase to happen on your eCommerce store, you must make your brand’s presence felt everywhere your ideal buyer interacts. More and more business owners are implementing an omnichannel merchandising strategy to pull that off.

By leveraging machine learning, social media and big data analytics, you can pick up on the trail of your potential customers regardless of when and where they are on the internet.

Final thoughts: A step-by-step guide to eCommerce merchandising strategy

Even though you know the best practices for eCommerce merchandising, the many moving parts can be intimidating. To steer your eCommerce business towards success in the ever-shifting digital landscape, you need to have a North Star.

While eCommerce merchandising aims to define and facilitate a customer journey, it’s still the customers who decide what’s relevant to them. Put your customers at the center of your marketing campaigns, and the sales will come.

On the other hand, many entrepreneurs need help to build a world-class website from nothing. Here’s the good news: Bluehost offers full-service website design so you can focus on your products and merchandising while our website experts build and design the perfect eCommerce website from start to finish.

eCommerce merchandising: FAQs