Personalized merchandising: solving the context problem in e-commerce

How personalized merchandising gives the right context to products and users

Telling you that ‘personalized merchandising’ involves merchandising products with personalization sounds like a pretty obvious no-brainer. Context matters. Without it, a definition like this isn’t going to do you much good.

But what if I told you that one of the biggest challenges that e-commerce retailers face is merchandising by providing context to their products and their shoppers?

Being able to merchandise on your e-commerce storefront should be a given. But when you consider the differences between a brick and mortar shop and a digital omnichannel ecosystem, there are challenges both physical and strategic that need to be overcome.

Using site search and personalized merchandising, you can solve the context problem by satisfying your user’s intent while also considering your business needs too. How does it all work?

The advantages of real-world merchandising

Merchandising is a retailer’s way of affixing context to their products. Even as the context—seasonality, popularity, or strategic KPIs for example—continue to change, the goal remains the same: by spotlighting products that align with your context, you can accelerate users to the shopping cart, enlarge the average basket size, and increase overall conversions.

For avenues both physical and digital, merchandising should be a big part of a retailer’s promotional strategy, but this just isn’t the case. Even as goals are the same, the approach is vastly different.

Consider the traditional brick and mortar shop. The physical truth of these shops has a level of authenticity that an online storefront can never replicate.

Brick and mortar shops are limited by their creativity to merchandise. Retailers know that a shopper’s threshold for stimulus can be swayed to trigger buys. With purposeful merchandising, you can squeeze every bit of a product’s exposure to level up visibility, foot traffic, and of course sales. Some ways to do so include:

• Window and in-store displays
• Controlling the floor layout
• Colorful decor
• Location of promoted product
• Grouping related products together
• Upsells by the counter

A retailer that runs a brick and mortar store may take for granted the decision and the action to, say, move a seasonal winter jacket to the very front of the store to promote it. Such flexibility and freedom of movement isn’t available on the digital front.

Merchandising digitally is a different story

For e-commerce, in contrast, senses are replaced with scrolls and clicks. Suddenly, navigation becomes a challenge on digital storefronts. A typical user interface will have a menu bar and maybe some facets on the side, relying on the user to click through page after page to find what they’re looking for. It’s not so easy to get around with such a bare-bones navigation.

Integrating search into your omnichannel architecture can help with navigation. Users prefer to maneuver through an internal search engine—59% of users frequently use search to navigate and 15% would rather use search than the menu. As a result, using the search bar shows an uptick in average conversion rate, increasing from 1.7% to 2.4%.

Still, shoppers need to interpret the online interface to find what they’re looking for, and this puts limitations on how businesses can merchandise digitally. Using search mitigates some of the roadblocks with navigation, but the actual merchandising, the actual product spotlight, is still a challenge.

The merchandising choices that e-commerce folks have are limited to the likes of promoting on the homepage or user interface. For example, you may be featuring a graphic advertisement on your homepage targeted at a seasonal winter sale. You may even be featuring several ads that carousel along, each different and tested for optimized performance.

Yet, how optimal can such a general merchandising method be? You see, merchandising isn’t a one-size-fit-all strategy. Each user, each segment is unique, and casting the merchandising net that wide will inevitably lead to opportunities slipping through the cracks.

How can e-commerce retailers capture a shopper’s unique preferences while also connecting their context with the products being searched for?

How does personalization help?

Adding a touch of personalization into the merchandising experience may be the answer.

Personalization reflects a user’s own unique context. Specificity, it turns out, is really important to users. 53% of online shoppers believe that personalized shopping experiences are valuable. Also, when personalization and proprietary customer data are integrated, revenue increases by 6% to 10%.

When a shopping experience is personalized, outcomes are informed by user behavior in real-time across any touchpoint to show curated content for every segment.

That’s really just a fancy way of saying that personalization lets you respond to a user’s intent with content relevant to them, something Algolia has been focused on for some time now.

In the context of search, you can also say that personalization is a kind of ‘hyper relevance.’ If a user searches for ‘sweater’ but sees results for ‘socks,’ the shopping experience probably won’t feel very personal.

Personalizing search tailors the results shoppers see based on their preferences, and previews behaviors on your omnichannel platform. How accurate a results set is at approximating intent can impact user satisfaction—74% of consumers are frustrated when they see irrelevant results.

With a site search architecture in place, you can keep your relevance, and in turn, your personalization sharp. Site search captures intent not so much as a wide net, but like a precise arrow. Weighing several criteria like spelling and filters, products are ranked so users directly see the most relevant results.

Among the criteria, business metrics, like margin and units sold for example, can be considered within the ranking process too. It’s here that search and personalized merchandising come alive.

Providing context with personalized merchandising

Personalized merchandising works around e-commerce problems by communicating with users directly and individually, but most importantly, collaboratively.

By now, we know that the physical restraints that come with e-commerce make merchandising really hard. Evolving search beyond the box doesn’t only soften the navigation problem—it gives retailers the ability to tune search relevance and personalize the shopping experience.

This is where it gets interesting.

As shoppers who use site search moves along their buyer’s journey and peruse your digital shop, the experience will feel nearly personal, on account of the relevant results they’ll see.

But that’s not all.

Using personalized merchandising, voices from both sides are ringing loud and clear – not only is your user’s intent heard, your business goals are listened to as well.

Each shopper is unique and their intent can take on infinite voices. A good site search engine provides textual relevance that ensures even proximal queries will match a user’s intent. No matter what the query may be, you’ll be able to return relevant content that touches on your merchandising goals for every variation, for every segment.

That’s the beauty of personalized merchandising—it takes the contexts of the user and the business and emphasizes them together, collaboratively. Woven into the results are products that match the user’s search intent as well as your business metrics.

For the folks at Lacoste, they know well the impact a site search solution can have on their omnichannel environment.

A quick look at their homepage will show that on top of smart merchandising choices, they’ve added a prominent search bar at the top of the page.

While we don’t know what business metrics the Lacoste team chose to emphasize, it’s clear that a deliberate effort was made to spotlight some products over others.

In a search for ‘tennis,’ the top result a shopper sees is a premium collection that’s being promoted, even as the description is missing the collection search term itself.

A search for ‘leather’ will show products Lacoste have collaborated on with partners to the top of the results.

After having site search integrated on their online and mobile platforms, Lacoste saw a 210% increase in search use. As a result, conversion rates increased by 37%, with a 150% increase in sales contributions.

If you’re looking to transform your e-commerce business with personalized merchandising and provide the right context to both your shoppers and your products, talk to one of our search specialists.