AI-Powered eCommerce Merchandising in The Retail Industry

From tech to fashion eCommerce, businesses everywhere are looking for new and improved ways of marketing their products. They want to make their users’ journey with them as smooth as possible.

Part of this, creating a seamless buyer’s journey, includes knowing exactly what to present and when, which just so happens to be our topic today. In case you’re wondering, I’m talking about eCommerce merchandising, and this is what you need to know.

What is eCommerce Merchandising?

eCommerce merchandising is all about presenting and displaying products and services in the online world; it’s about matching shoppers with the right offers, thereby increasing awareness and engagement to make it more likely they’ll find something they like and buy.

Unlike brick and mortar stores, where everyone entering experienced the same visuals and smells, being online allows for more customisation, as every visitor’s experience can be tailored specifically for them.

Dropping the qualifier that precedes it, merchandising helps you control the narrative and decide how site visitors perceive your brand and its offerings.

Without it, the only option is to choose whatever products you want to sell the most, and plaster them everywhere, hoping to move as many as you can; a game of chance to see if more people than not like what they see. With it, it’s not a game of chance— not really—because the offers they’re seeing are those that pertain to them, and only them.

Part of merchandising also involves knowing that each visitor has their own mindset, will engage with the same content differently than others, and will convert for different reasons too. What you have to do is figure out that is for each person.

Thankfully, with artificial intelligence in retail, business is easier than ever.

AI in Retail 2018: eCommerce Merchandising

As we just touched on, a big part of eCommerce merchandising involves knowing how each site visitor is different. With this knowledge, you can use the right technique at the right time along the buyer’s journey to offer the product with the highest chance of being purchased.

In other words, like choosing an eCommerce agency, you first have to understand your prospects. You have to analyse their needs and desires, and then tailor their experiences with your brand so the likelihood of a conversion is increased.

To know with certainty what your visitors will respond to best, you need real-time data. To get real-time data, you need to delve into your website and eCommerce platform’s analytics to mine said data, which can include customer data like:

• Where your visitors are coming from (organic search, social media, referrals, etc.)
• Whether your visitors are first-time or repeat visitors
• Which pages they visited on your site and for how long
• Demographics like their age, gender, location and occupation
• Which device they used to access your site

And eCommerce data like:

• Browsing behaviour
• Which products were purchased, their quantity and their cost
• Any specific product details like its size, colour, style, etc.
• The purchase date
• The payment method
• Whether any cart was abandoned before checkout

Here’s where artificial intelligence (AI) comes into play. 

Retailers using AI know it fuels automation, which is extremely useful in sifting and making sense of all the data you have on your hands, such as what’s above.

For example, imagine a user who browsed Items A, B and C a set number of times. With eCommerce data like this, brands can pick and choose to show these and related products to said user when they land on their homepage, as they’ve already shown an interest in them.

But, manually going through every user’s data is not only time consuming, but exhausting as well. Thankfully, AI and its many capabilities is here to save the day.

Working in the background, AI-enabled tools and programs work in real-time to take note of practically every action users take on a website, leading to data-backed decisions regarding which product(s) to show to which user(s).

In fact, posed with the question of what the most popular application for AI is, research from the Q3 2017 E-commerce Performance Indicators and Confidence Report showed that merchandising techniques took the top spot, described as product recommendations. Furthermore, 56% of online retailers revealed they are either already using it as part of their recommendations strategy, or will be doing so in the near future.

Thanks to artificial intelligence in the retail industry, these brands can now merchandise with the certainty that what their users are seeing is what they want to see.

Examples of AI in Retail: How eCommerce Merchandising Works

eCommerce merchandising can work in many ways, but the gist is to show users personalised product recommendations that are more likely to be purchased, which is usually based on items they’ve previously shown interest in.

For example, these products can be items they’ve previously checked out, items similar to those they’ve they’ve checked out, items that are complementary to previous purchases, items from wishlists they’ve created, or a myriad of other sources that all lend some sort of insight into what will work best.

As to where exactly to show these products, you have a couple of options, such as the home page, a category page or a product detail page, but quite honestly, any page on a website should be used for merchandising.

In action, you want to feature your products front and center, where they’re more likely to be seen, along with complementary products that can be bundled.

For example, take a look at Apple’s website. As a big brand with a limited number of offerings, they always feature top-selling products more likely to be purchased. 

Amazon, on the other hand, has a much larger selection, so they choose to display products directly related to browsing and purchasing behaviour.

To reiterate what we’ve been covering, in both instances, the products chosen are those that are more likely to be bought.

Final Thoughts

Thanks to the “electronic” aspect of eCommerce merchandising, you can choose to display products with the knowledge that they’re being shown to those who are actually interested in them.

And that’s what AI-powered eCommerce merchandising in the retail industry can do.