The Problem with Manual Merchandising

Manual merchandising has been a reliable method of showcasing products in retail stores for decades. Merchandising is all about arranging product displays and optimizing in-store experiences, so shoppers are motivated to stick around and buy. 

But the retail landscape is increasingly becoming more digital. In an online shopping environment, ensuring that the right products connect with the right shoppers – while maintaining appropriate inventory – is incredibly challenging, particularly when it’s done manually. 

Manual merchandising doesn’t scale well in an omnichannel retail ecosystem. But thanks to advances in AI, new automated merchandising solutions can help. Automated merchandising systems dynamically create product bundles, keep track of inventory, and make visual merchandising easier to achieve online. 

In this post, we’ll highlight the drawbacks of manual merchandising and explain how an automated merchandising system can help you improve the customer experience and ultimately your ROI.

What is Manual Merchandising?

Manual merchandising refers to executing merchandising activities without any automation or technology assistance. It covers things like setting up eye-catching store displays, organizing product layouts on shelves, allocating floor space between categories, and other tasks related to showcasing and selling products in brick-and-mortar store locations.

Digital merchandising in an ecommerce setting is similar to in-store merchandising in that it’s about presenting eye-catching product displays, images, and offers to entice visitors to buy. Managers play a key role in curating the online shopping experience through manual efforts like choosing which products to feature, setting prices and promotions, and designing opportunities for cross-selling and upselling.

However, digital merchandising isn’t limited strictly to manual work. It often combines human intuition and decision-making with data-driven optimization powered by technology. Ecommerce managers can enhance the customer journey by leveraging consumer behavior insights, analytics, and automated merchandising tools.

The key responsibilities for merchandising teams remain product selection, pricing, promotions, sales data analysis, restocking, and working with buyers. Savvy managers execute those essential tasks in tandem with solutions that scale efforts and unlock the full potential of their merchandising strategy.

Examples of Manual Merchandising

Here are some examples of manual merchandising that’s likely keeping your digital merchandising and ecommerce teams very busy:

• Product Placement: Manually categorize products into relevant groups like clothing, electronics, or home goods. Personally select certain items to highlight on homepage banners and category pages based on what’s trending or seasonal.
• Promotions: Create and position promotional banners across the website to showcase sales and deals. Decide when and where to display coupon codes customers can use at checkout.
• Recommendations: Choose complementary products to suggest on certain product pages, like “Customers who bought this also liked…” Doing this manually means related items are selected based more on human intuition than data-backed insights.
• Holiday Themes: For special occasions like Christmas or Valentine’s Day, ecommerce merchandisers manually update website visuals, colors, and banners to reflect seasonal themes. They also curate holiday product collections to showcase what they think customers want that time of year.
• Pricing: Manually make judgment calls on when to run sales, adjust pricing up or down, or use strategic price anchoring to influence perception. Relying on gut instinct rather than data makes it harder to optimize.
• Content: Write product descriptions and select lifestyle images to showcase items in a compelling way. 

What are the Drawbacks of Manual Merchandising?

While manual merchandising has served retailers well in the past, it has some significant drawbacks when it comes to digital and omnichannel shopping experiences. Relying solely on manual efforts makes it extremely difficult to keep up with the scale and complexity of modern omnichannel retail.

5 Problems with Manual Merchandising:

1. Not Scalable

• Creating & sharing product sets can’t scale when done manually, particularly when you’re working with multiple channels like physical stores, your ecommerce website, and apps where keeping track of inventory in real-time is essential. This represents a missed revenue opportunity between what gets merchandised versus the rest of the catalog.

2. Product Staticity

• Manually curated sets of products are static and unresponsive to changes in inventory, new products, and behavior shifts across seasons. Keeping sets relevant requires constant manual upkeep.

3. Time Consuming

• Manual product categorization, search refinement, promotion building, product recommendations, and pricing is enormously time consuming. It diverts resources from more strategic merchandising decision-making.

4. Uninformed Decision Making

• Without customer analytics to inform decisions, merchandisers rely on intuition and guesswork. This makes it much harder to accurately predict and deliver what shoppers will respond to.

5. Limits ROI

• Since pricing, sales, and promotions aren’t optimized by data, there’s no guarantee they are configured to maximize ROI. Leaving money on the table limits business potential.

The bottom line: manual merchandising makes it extremely difficult – if not impossible – to deliver personalized experiences that inspire customers and meet revenue goals. Teams essentially rely on brute force efforts to curate an exponentially complex omnichannel retail ecosystem.

How to Resolve the Issues with Manual Merchandising?

Manual efforts alone make personalizing experiences that convert a big challenge. The solution is blending automation with human know-how. AI-powered merchandising systems like Monetate can handle tedious tasks like data management, inventory monitoring, and product pairing, so managers can focus on high-impact decision making. 

Specific features that can ease merchandising pain points include:

• Automated product bundling:  Bundling involves grouping complimentary products together. Automated bundling features like Monetate’s “Complete the Look” uses machine learning and rules-based algorithms to match complementary items aimed at sparking more purchases. 
• A/B Testing: Allows retailers to experiment with different merchandising strategies to see what resonates. Then double down on what works.
• Recommendations: Serves up contextual product ideas based on user data to help shoppers discover the products and services based on things like browsing behavior, past purchases, seasonality, and inventory availability. 
• Segmentation: Automated customer segmentation groups like-minded customers together, making it much easier to create targeted merchandising strategies that ensure each customer sees relevant product bundles and recommendations.

In addition to the above, merchandising technology provides critical performance stats to inform decisions based on real data versus gut feelings. 

Combining manager expertise with automation gives retailers a shot at delivering great, personalized experiences that keep customers coming back. That’s the future of merchandising.

Benefits of Automated Merchandising Systems

Automating the more cumbersome aspects of merchandising through platforms like Monetate presents some specific benefits including:

• Increased revenue: Monetate’s automated bundles like “Complete the Look” drive more add-on purchases which can lead to higher order values. This directly lifts key revenue metrics.  
• Enhanced catalog exposure: Curated product sets combined with recommendations and personalization get more products in front of more shoppers. This maximizes catalog visibility.
• Empowered teams: With software doing the heavy lifting on bundles and personalization, merchandising teams can allocate more time to strategy,  and customer-focused initiatives.  
• Brand differentiation: Cohesive product sets and tailored experiences help brands showcase their unique stories and create merchandising experiences specific to the brand – it’s a powerful way to differentiate your store from competitors.
• Happier customers: Relevant bundles and personalized product discovery enables self-guided shopping journeys with less friction. Happier customers convert more and remain loyal.

Automating some of the endless tasks inherent with digital merchandising drives efficiencies while unlocking new capabilities that wouldn’t be doable manually. The magic formula involves combining software capabilities with human expertise – neither works best alone.