Online shopping offers the variety of options that customers crave, but comes with a clear risk of information overload. It’s no surprise that personalized product recommendations make up a noticeable portion of sales. So, is it time to look into e-merchandising tools that offer more relevant and targeted recommendations?

Yes, says Lauren Freedman, president of The E-Tailing Group: “As best-in-class merchants raise the bar, keeping up with requisite functionality will be just the beginning . . . More differentiation and more creative execution of merchandising, both onsite and via e-mail, will be the next initiatives to require resource commitments.”

What are E-merchandising tools?

Let’s start with a basic definition: online merchandising involves choosing featured products and promoting them in a way that increases the likelihood that a browser will turn into a buyer. This can be done in 2 ways, using: 1) general marketing campaigns and 2) e-merchandising tools.

General merchandising activities are often campaign-based. They are linked with specific paid search campaigns and email blasts. They are broadly tailored to a customer profile, but not to actual customer behavior. This approach works well for home page and category landing pages, but loses effectiveness deeper in a site where more specific information is needed to differentiate products for the particular customer.

E-merchandising tools, on the other hand, make it possible to target real-time shopping behavior. These tools dynamically target promotions, product recommendations and even navigation based on the real-time shopping behavior of individual visitors by leveraging proven machine-learning technology. This technology can deliver a more personalized experience, identifying the customer’s intent by analyzing their clicks, views and navigation.

Why is E-merchandising Important?

Product recommendations are key. They are a proven way of increasing revenue, conversion rates, and average order values. It’s not uncommon for online retailers to report between 2-5% of total website revenue attributed to product recommendations. Powerhouses like Amazon show between 20-35% of total product sales resulting from product recommendations.

Retailers that personalize the shopping experience across channels are seeing an increase in engagement, sales, and customer satisfaction.

According to a study by MyBuys and The E-Tailing Group:

  • 40% of the respondents said they buy more from retailers that personalize the shopping experience across channels.
  • 41% buy more from retailers that send them personalized emails.
  • 39% buy more from retailers that personalize web recommendations.

Based on MyBuys’ database of over 250 million shoppers, customer-centric marketing delivers a 25% increase in total online sales and gives a huge boost to customer lifetime value.

Retail sites that offer the best personalization will win as most relevant to consumers. E-merchandising technology captures customer intent at a level beyond customer profiles or prior purchases. It gives you the opportunity to anticipate and fulfill your customer’s next want.