The 7 best practices for product merchandising

There were over a million new companies in France in the second quarter of 2022. In the United States, the number was over three hundred thousand. All over the world, new businesses are created every year. But the reality is that approximately 20 percent of these businesses will fail in the first year. And at the end of a decade, only 30 percent of these businesses will remain. 

There are many reasons why most businesses fail, but one of the most common reasons is that most businesses have ineffective marketing and sales strategies. 

In this article, we will look at an effective marketing and sales strategy businesses, especially retail businesses should implement. This strategy is called product merchandising. 

Product merchandising are the activities businesses use to promote and drive sales to their store. These activities can range from using product displays to offering special offers, and visual merchandising. 

Let’s take a look at best practices for product merchandising along with tips to help you get started.

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1. Optimize your store layout

The layout of your store is crucial. Whether it is a physical or an online store, you want it to be designed in a way that encourages customers to look around. The more ground the customer covers, the more likely they will see something they like and make a purchase. 

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For physical stores, there are many layout options to choose from. For example, the grid store layout allows you to display products on long aisles where customers can walk through, browsing the merchandise as they go. The grid layout also allows you to maximize product display while reducing white space. 

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Your goal with whatever physical store layout you choose should be to attract customers while promoting a comfortable shopping experience. And the same goes for your online store.

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It takes a visitor to your website around 10 seconds to decide whether they should remain on your site or not. If you want to ensure that customers hang around long enough to make purchases, you need to optimize the layout of your online store for conversions. 

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Here are two tips you can use: 

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#1. Include the most important information above the fold of your website

Above-the-fold content on your website is visible before the visitor even scrolls. Putting the wrong content above the fold can lead to increased bounce rates. Some of the things you should include are branding and logo, navigation, shopping cart, search bar, and most importantly, any promotions you might be offering.

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Source: Aya Paper

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Here is another example from Yumi on how to properly use the above-the-fold real estate. 

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Source: Yumi

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On their homepage, Yumi offers customers promotions like free shipping and discounts to encourage customers to shop from them.

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#2. Include primary calls-to-action (CTA)

Use CTAs to direct visitors to where they should go when they are on your site. CTAs will help users navigate your website more efficiently. Some CTAs you can use include “Shop Now”, “Learn More”, or “Buy Now”. Run A/B tests to find which CTAs lead to the most clicks and conversions for your business. 

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Here is an example of an efficient use of CTA buttons on the homepage of a skin and beauty product store:

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Source: Bliss

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You should test things like the color of your CTA buttons. For example, a Hubspot study found that red CTA buttons convert 21% more users than green CTA buttons. 

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The two tips above highlight how you can optimize the homepage of your online store. Further in the article, we will see how you can optimize product pages. 

2. Take advantage of technology

Technology can help you display your products in more creative and effective ways. You will also be able to create customized shopping journeys for customers by using merchandising technology. The best part is that these technologies can be used in both physical and online stores. 

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Here are some ways to use merchandising technology:

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#1. Use digital screens and interactive bots to get customers engaged and interested in a product. For example, British department store Harvey Nichols uses large touch screens to display more information about products and to highlight new collaborations. 

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Source: Trendhunter

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#2. Using virtual and augmented reality technology will help you to effectively demonstrate your products and also help users to connect with it better. 

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For instance, using 360 or 3D view functions when displaying merchandise on your product pages will give the customer a better viewing experience and allow them to interact with the product in almost the same way they would in a physical store. 

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Source: Threekit

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#3. With augmented reality (AR) software, customers can even use their phone cameras to directly see how a product will look in their space. Companies like IKEA use AR to test how a product will look in a shopper’s home. 

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Source: Business Insider

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3. Use displays to highlight products

Product displays can be used to highlight new or specific products. They can be called point-of-purchase (POP) displays and they help draw attention to specific products you want to advertise. You can use the displays to showcase new deals, promote product features, highlight collaborations, or to even break up open spaces in the store. 

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If you run a physical store, product displays are a must. But remember that the location of the display is very important. Display your best sellers or new products in high-traffic areas. Then run product displays for smaller add-on items close to the checkout area.

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Also, ensure that your displays are eye-catching so they can capture the attention of the customer. Here is an example of a POP display:

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Source: Ravenshoe

4. Boost sales with proper product placement

Product placement is a marketing technique where products are promoted through some form of media, such as television, games, music videos, movies, and social media platforms. Typically, most product placements are aimed at targeting commercial retail market customers. And when done right, the customer might not even recognize the product placement as an ad. 

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The goal of product placement is to help capture the attention of customers when they are shopping, build brand awareness, and drive sales. The more a customer recognizes your product, the more likely they are to purchase it when trying to make a purchase decision and have multiple choices. 

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Here are some of the ways you can use product placements to promote and showcase your products.

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• Retail floor placement: This is the oldest form of product placement. Here, companies pay for premium display spaces in retail stores. In departmental and grocery stores, big brands pay to display their products in shelf spaces that are at the customers’ eye level. 
• Social media placement: This is the same thing as social media influencing. Businesses find social media influencers that fit their brand and pay the influencer to share posts where they are using their product. For example, a fitness influencer can make a video of them exercising while wearing a brand’s footwear, or a lifestyle influencer can make a video of themselves holidaying in a specific hotel. 
• TV placement: In this form of product placement, the product is usually advertised subtly in movies or television shows. For example, when you see lead actors in a TV show or movie using a specific phone brand, let’s say Xiaomi, that’s product placement.  Ad Age reported that the Superman: Man of Steel movie had up to $160 million in product placement promotions from brands like Nokia, Kellogg’s, Hershey’s, Sears, and Warby Parker glasses.
• Video game placement: Brands can pay video game creators to display their products in games. And with how advanced the modern gaming industry is – with great stories and narratives, the product placement will appear the same way it does in movies and TV shows.
• Verbal placement:  This is almost the same as influencer marketing. The main difference is that it is very subtle. For example, a brand can pay a celebrity to creatively talk about or at least mention their product during the course of interviews or on-air conversations. 

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Product placements are very effective. And depending on the scale of the campaign, you might get more return on investment from paid product placements than traditional advertising campaigns. You will also be increasing your brand’s visibility and awareness. 

5. Use experiential retail to drive traffic

Nowadays, the most successful stores are the ones that are not just visually rich but also offer customers exciting in-store experiences.

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Experiential retail is the process of providing customers with exciting and memorable shopping experiences. And as competition in the retail industry increases, 60% of customers say that they expect retailers to dedicate more than half of the retail space to creating customer experiences. In fact, 81% of consumers globally say that they will pay more for experiences that elevate shopping. 

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Here is an example from lingerie retailer LIVELY on how to offer customers a unique in-store experience. 

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Source: Shopify

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Part of LIVELY’s experiential retail strategy is offering its customers personalized fitting sessions. Customers can book their sessions online and then show up at the store where a retail associate will then assist them with finding their bra size.

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It is not only physical stores that can offer customers an immersive shopping experience. Online retailers can also replicate the in-store experience by enhancing how customers interact with products. With the use of images, videos, and technology, brands can deliver lifelike and engaging shopping experiences. 

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Here is an example from Levi’s: 

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Levi’s is a big brand with its products sold in 110 countries worldwide through a combination of online stores, department stores, and approximately 3200 retail stores. But during the pandemic, to make it easy for customers to explore their new collections, Levi’s developed a virtual showroom with interactive galleries to showcase their products. The galleries had detailed 360-degree images and videos to make the shopping experience as close to real life as possible. Customers who were unable to travel to physical showrooms could still have a similar in-store experience when shopping online. 

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💡 When offering customers experiential retail experiences online, it is important to have a central repository that will serve as a single source of truth for all your digital assets. For example, Levi’s uploaded 40,000 new images each season. Managing all these images can be difficult and time-consuming. But with a central repository, they can easily store, manage, and share all of these assets from one single location.

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Another advantage of having a central repository is detailed analytics. You will be able to easily measure which of your assets are effective in helping you get sales. An example of a central repository is a digital asset management solution. Find out how to choose the best DAM solution for your business.

6. Offer personalized product recommendations

Picture this scene: you’re in a physical clothing store looking for jeans to buy. And after you buy the jeans, the store assistant tells you they found a shirt that will fit the jeans perfectly. If you’ve experienced this, that was a personalized product recommendation. 

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If you run an online retail or ecommerce store, offering personalized product recommendations is the perfect way to upsell and drive more sales. When done right, personalized recommendations are very effective. In a 2019 study, Monetate reported that businesses that use personalization are getting 75.5% more positive ROI than businesses that do not. 

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Here are three ideas to help you with product personalization. 

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Recommend products to customers based on their browsing and purchase history. Brands like Amazon and Nike do this. They use the user’s browsing and purchase data to recommend products the visitor will be interested in.

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Source: Nike

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Recommend products based on the customer’s profile or location. You could look at the customer’s profile data like age or gender to determine what recommendations to make. The same goes for location. For instance, if a customer is located in an area experiencing winter, you can recommend products they will find useful during this period. 

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Source: Walmart

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Recommend products that customers with similar profiles have purchased. You can show recommendations based on the actions that customers with similar profiles have taken on your site. An example is Amazon’s “Customers who read this book have also read” recommendation. 

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Source: Amazon

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If you haven’t implemented product personalizations in your business, you should start now. Not only does it increase your average order value (AOV) through upselling and cross-selling, it can decrease your cart abandonment rate by 4.35%. 

7. Use detailed product descriptions

When done right, a well-written product description can help you influence a potential customer’s decision and improve your conversion rates.

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Product descriptions are used to describe the features and explain the benefits of your product. It includes all the details of your product. These details can be in the form of bullets, sentences, or short paragraphs. Most times, they are located under product images or product titles.

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To create detailed product descriptions, here are some questions you should ask. These questions will give you an idea of things to put in the product details.

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• Who is the product for? Is it for men or women? Or are you targeting a specific age group or lifestyle demographic?
• What are the product’s basic details? This will include the product features and attributes such as dimensions, materials, and cost.
• Where can someone use the product? Highlight where the product is used. Is it suitable for both indoor and outdoor use?
• When should the product be used? Is it for seasonal use only or can be it use any time of the day? Little details like this can help highlight the long-term value of the product. 

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Keep your product descriptions short and sweet. Also, opt for paragraph-long product descriptions to tell the story of your product. You can then use bullet points to convey important information and need-to-know technical specifications. 

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It’s also a good idea to show social proof such as product reviews and testimonials. Why? 88% of consumers trust reviews from other users as much as personal recommendations and will look at them before making purchase decisions. 

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Here is an example of a product page description that effectively communicates the benefits and features of a gas grill. 

Source: Weber

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On the product page, Weber’s visitors can see a detailed description of the product along with reviews. And when customers scroll down, they also see recommended products to help them complete the set. 

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💡 To increase your efficiency at product description, it’s best practice to integrate a PIM system in your overall MarTech stack. PIM stands for product information management systems and will serve as a centralized database to help you store and manage all of your product information. Having a centralized database ensures that the same product information is displayed across all your sales channels. 

How DAM can help with effective product merchandising

Large retailers and ecommerce businesses use a lot of digital assets and product visuals. To ensure that you can effectively store, manage, and distribute these assets while still delivering consistent, omnichannel experiences to customers, you need to invest in a Digital Asset Management solution (DAM) like Wedia. 

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Without a DAM it will also be difficult for you to accurately measure the customer’s experience and engagement with each piece of your content. On the other hand, Wedia will make it easy to measure and record the performance of your content so you can identify which ones best contribute to sales. And if you use the product view in Wedia’s DAM, you can easily prepare the visuals required for your ecommerce store and other sales channels.

In addition to the DAM, Wedia also offers a Media Delivery and Digital Experience . The module allows you to create personalized content and measure their performance across all channels at scale. You will also be able to automatically deliver images and videos that are adapted for every device and channel.  

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Using the DAM and Media Delivery and Digital Experience features of Wedia will help retailers and ecommerce businesses offer their customers more unique shopping experiences which will lead to more sales. Book a demo.

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