4 Site Merchandising Strategies for Boosting Profits

In a previous blog post, we introduced how DynamicAction’s Export API can elevate your tech stack to drive more engaging customer experiences, better conversion rates and increased overall profitability. In the next few blog posts, I’ll dive a bit deeper into some key site merchandising strategies. First, I’d like to explain how DynamicAction provides critical insights for identifying when retailers should boost or bury products.

1. Boost Profit Generators

All things being equal, retailers should always want to increase views of products that have the most positive impact on profitability.

Find your most profitable products using DynamicAction’s Product-Profit-per-View KPI, which calculates each item’s overall efficiency in driving profit relative to its category peers. Armed with such insight, merchandisers and automated site merchandising technologies like onsite search and product recommendation solutions such as Attraqt, Certona, and Episerver can ensure profit-generating products receive more exposure relative to less profitable items.

2. Bury Fragmented Items

All site merchandising technologies can incorporate fundamental inventory data into their selection decisions. For example, as soon as an item is out of stock, it can be suppressed completely. However, a product can still technically be considered in-stock even if the only units left in stock are XXS or an undesirable color.

Products with very few color, size, material, etc. SKU options in stock have low SKU Availability (a DynamicAction KPI that calculates the in-stock % across all SKUs included for a product). Products with low SKU Availability should be buried or potentially suppressed altogether from category pages, product recommendation zones and onsite search results until their stock levels across the appropriate SKUs have been replenished.

3. Suppress Items Delivering Poor Customer Satisfaction

Product ratings and reviews managed by vendors like Bazaarvoice and Reevoo, as well as returns data, can be used to quickly determine if there is a problem with a product that needs to be addressed. Fast action must be taken, as products with abnormally high return rates are margin killers, and poorly rated items are failing to delight your customers. These items likely need to be removed from recommendations to customers until you’ve had the opportunity to investigate and rectify the issue.

In some cases, the problem with the product might be easily remedied. For example, incorrect product descriptions often lead to fit issues and ultimately a high return rate.

DynamicAction points out which of your products have a high return rate and/or a low rating, making it easy to identify the products that require your attention.

4. All of the Above: Make Your Vendors Work for You by Automating Your Merchandising Strategies

One of the great things about merchandising technology vendors is they all support incorporation of additional product data. Many can pull this information directly into their algorithms, and most will allow retailers to fine tune the logic to boost, bury and exclude products.

Each of the DynamicAction KPIs mentioned above can be used to develop rules for automated site merchandising. For example, you might want to completely suppress any items from being recommended if:

  • If the SKU Availability < 25%

-or-

  • If the products have a Rating < 3

-or-

  • If the Product-Profit-per-View < 35%

You may also want to apply a boost rule such as:

  • Re-rank the top 4 items returned by my onsite search or product recommendation engine in this order:
  1. By Product-Profit-per-View
  2. And then by SKU Availability

DynamicAction collects and transforms your retail data, then applies over 1,500 proprietary algorithms to create new retail metrics like SKU Availability, Product Profit-per-View, Low Review Rating, High Return Rate — and many more — that deliver improvement in the performance of your organization’s site merchandising technologies.

Using DynamicAction KPIs with these refined merchandising strategies will boost overall profitability. (Read our case studies for customer results.)

In future blog posts, I’ll discuss merchandising strategies for additional use cases, including offsite marketing and surgical email campaign development, amongst others.

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