What is Digital Merchandising & How to Personalize It

Retailers have been practicing the art of positioning products so people want to buy them – otherwise known as product merchandising – since the invention of commerce. Fairs and town markets surged in popularity in England around the 13^th century, forcing merchants to create eye-catching displays to lure shoppers to their wares (one imagines).

In the late 19^th and early 20^th centuries, the growth of urbanization combined with industrialization brought with it the emergence of new types of retail spaces. People went beyond their local town market to shop. Retailers were able to reach larger consumer audiences via department stores, supermarkets, malls, pharmacies, convenience stores, and local chain outlets.

Product merchandising techniques grew to include in-store strategies that included display design, signage, package design, and branding.

Merchandising also extended to physical media channels including newspapers, postal mail, magazines, TV, and billboards.

Digital merchandising takes this about ten steps further. Merchandising techniques have adapted to online spaces and channels in ways those early town square sellers couldn’t possibly have imagined.

What is Digital Merchandising?

Digital merchandising is the art and sometimes science of showcasing products in digital spaces like websites, apps, and email inboxes. Digital merchandising incorporates the channels people use to shop and interact with retailers. It achieves this thanks to the wonders of technology. Technology works behind the scenes to make things like online shopping and personalization possible.

Why Is Digital Merchandising Important?

Digital merchandising is pivotal in enhancing the online shopping journey, compellingly blending innovative techniques with insightful brand storytelling to consistently entice repeat customer purchases.

Not only does it foster an enriching eCommerce experience that aligns closely with a brand’s narrative and objectives, but it also empowers businesses with invaluable data and analytics. By delving into the nuances of customer behaviors, preferences, and purchasing patterns, digital merchandising offers a robust foundation for making astute, data-informed decisions, optimizing merchandising strategies, and uncovering new avenues for growth, thereby firmly anchoring its importance in a brand’s digital footprint.

The Impact of Digital Merchandising

In an era where shopping has predominantly moved online due to emerging digital channels and technology, digital merchandising has become a cornerstone for retailers to captivate shoppers’ attention in the absence of physical shelves and window displays.

Digital merchandising is a multifaceted approach that goes beyond displaying pricing and product visuals, such as images and videos, or crafting compelling product descriptions. It encompasses tools like social proof, product reviews, and persuasive content to forge a positive shopping experience and spur purchasing decisions.

Here’s how effectively implemented digital merchandising solutions directly bolster revenue streams:

Encouraging Repeat Purchases – Digital merchandising motivates customers to come back to your website. What this looks like, in practice, is relevant recommendations, easy navigation, and attractive high-quality images.
Enhancing Product Visibility – Regardless of whether you’re selling something online or offline, product merchandising is all about visibility. Digital merchandising incorporates many tools that let you do this including images, video, written descriptions, page layout, and digital signage (e.g., bold text, popups alerting visitors of sales and promotions, banners, promo boxes, etc.) All of these elements work together to increase revenue, but only if they resonate with your customers.
Optimizing Product Placement – In a digital setting, optimized product placement generally means that the products you want to promote are front and center on your home page, category pages, and arranged strategically and logically as shoppers browse. Optimization requires you to present customers with the products they’re most likely to buy based on data and shopping history. This is where personalized digital merchandising comes in. We’ll delve into more detail about this in a minute.
Increasing Conversion Rates – Clear, compelling information reassures online shoppers. It increases conversion rates because it helps people trust you. Professional images, social proof, incentives like free shipping and easy returns – all of this builds consumer confidence. Reviews are particularly helpful when it comes to online selling, increasing conversion rates by as much as 270% according to a study by Spiegel Research Center.
Promoting Cross-Selling and Up-Selling – In a physical store, upselling is as simple as putting a display of delicious candy next to the cash register or building a compelling tower of cookies beside a well-traversed aisle. In online spaces, digital merchandising is needed to cross-sell and up-sell successfully. Suggesting similar items based on a shopper’s browsing history, using banners and widgets to showcase popular items (customers who bought this also bought that), and making product suggestions post purchase are ways to do this.
Reducing Cart Abandonment – Digital merchandising reduces cart abandonment by making the checkout process as painless as possible. Elements like a clear list of products in the customer’s shopping cart, a delivery date range, and flexible payment options inspire confidence in customers who, after all, don’t have any physical evidence that what they’re doing on their end of the screen will produce actual products. Basically, the more information you can provide throughout the shopping experience up to and including when a customer completes their purchase, the better.

Digital merchandising is not merely a strategy but an indispensable asset in the digital retail sphere, harmonizing technology and sales in a way that magnifies product visibility and amplifies conversion rates.

As we continue to forge ahead in an increasingly digital epoch, retailers and digital merchandising specialists alike must pivot, adapting and innovating to craft experiences that resonate, guide, and reassure online shoppers. Employing strategic digital merchandising solutions — from enhancing product visibility to mitigating cart abandonment — becomes the cornerstone to navigating the digital marketplace, carving out a space where your products don’t just exist but compellingly engage and convert.

Personalization Meets Digital Merchandising

Increasingly, personalization is a necessary part of the digital merchandising playbook.

Personalized digital merchandising presents shoppers with the most relevant information possible in the form of product recommendations, reviews, content, messaging, and total experience as they move through their online buying journey.

The value of personalization lies in its ability to sell more products and increase revenue, but it also drives customer loyalty and satisfaction. According to McKinsey, 71% of consumers expect personalized interactions from companies. If you don’t deliver this, your customers are likely to get frustrated and move on to greener (and more personalized) pastures.

Digital Merchandising Strategies to Implement Now

Elevating your online store in a sea of digital retailers requires more than a simple presence—it demands strategy. With so many stores fighting for customer clicks, smart digital merchandising becomes a must to make your brand stand out and give shoppers a personalized journey. Personalization here means more than just suggesting products; it’s about crafting a tailored shopping trip from start to finish for each visitor.

Let’s look at some practical strategies that show how important personalization is in effective digital merchandising:

Data-Driven Product Placement – Using customer data to get the right products in front of the right people is what personalized digital merchandising is all about. Platforms like Monetate analyze visitor demographics, time spent on your website, search terms used, past shopping history and a wealth of other information to display items in premium locations, showcase bestselling products, and display the most relevant products based on a specific customer and their session activity.
Product Recommendations – Personalization in eCommerce is pretty much synonymous with product recommendations. Personalized product recommendations rely on AI to recommend relevant products to customers. “Relevancy” includes similar products of the “you might also like” variety, popular product pairings (e.g., “this goes great with that”), product bundling (e.g., this scarf is a perfect match for those gloves), etc.
Dynamic Pricing – Nothing is fixed when it comes to digital spaces and this includes product pricing. Dynamic pricing uses data and algorithms to adjust pricing in real time. The AI looks at things like seasonality, customer behavior, demand fluctuations, and timing (e.g., early-bird specials) then adjusts prices accordingly. Dynamic pricing helps maximize conversions and sales while also keeping prices as competitive as possible.
Visual Merchandising – Humans are visual creatures, with our brains having the capacity to identify images in about 13 milliseconds. Given this fascinating dinner table statistic, visual merchandising continues to play an important role as a component of product merchandising even in digital spaces. Designing a visually appealing and well-branded home page, providing visual cues for guidance, paying specific attention to color and layout – all these important elements help replicate a satisfying in-person shopping experience.

Looking ahead at what’s next for online shopping, the mix of digital merchandising strategies and personalized shopping experiences is key to reshaping how we shop online.

Using these strategies, such as using data for smart product placement and adjusting pricing on the fly, benefits both the customer and the retailer. It gives shoppers a smooth, personalized shopping journey, while retailers see more engagement, sales, and loyal customers.

Getting Started with Personalized Online Merchandising

Digital merchandising takes some of the old (physical displays, branding elements, promotions and offers) and combines it with the new (high-quality digital images and video, data-driven recommendations, AI-powered product placement) to sell products online.

All-in-one personalization platforms like Monetate support digital merchandising by ingesting and analyzing large datasets then using this information to present the most relevant products and experiences to users. Digital merchandising isn’t just about pushing products, it’s about understanding and catering to individual consumer needs. As retailers, embracing the role personalization plays in digital spaces with tools like Monetate can elevate shopping experiences for individual customers, ensuring they remain happy and you remain profitable.