A Brief History of Online Merchandising and Thoughts About the Future

shopping-websiteBefore the web came along, catalog companies were the first to experiment with merchandising techniques designed to overcome the lack of a fully immersive in-store shopping experience. Punchy and persuasive product descriptions, detailed specifications, and imagery were needed to compensate for the lack of interaction with sales agents. The better catalogs have included lifestyle shots of how customers use their products, rather than merely listing products or showing photographs of products. Instead of listing products in alphabetical order, they tried groupings based on themes, styles, designers, complete outfits, etc.

BASIC INTERACTION AND NAVIGATION

The first generation of e-commerce websites did not take advantage of the medium’s interactivity. Instead they typically took content from a catalog and simply converted it to HTML for the web. The first improvements leveraged the fact that individual customers can navigate a website in any manner they choose. No longer a linear catalog with pages 1-30, merchandisers enabled users to shop by brand, by price, by style, by designer, by occasion, by room in your house, etc.

CROSS-SELLS AND PERSONALIZATION

The next innovation promoted cross-sells by showing additional products that complement products already browsed or inserted into shopping carts. Many of these recommendations were generated statistically a la Amazon.com, whereby “People who bought product x also bought product y.” Others are based on sheer logic as in “You bought the razor, now buy the blades.” Advances in personalization continue to drive higher conversation rates by presenting products that are most likely to be purchased by a given consumer. Of course good market research is helpful to this effort as well as more sophisticated analysis of individual click-stream behavior.

CONTENT AS KING

By providing interesting, relevant and fresh content on your site and emails, you provide non-promotional reasons for people to return to your site on a frequent basis. Blogging is a terrific way to provide this content. By linking your content directly to relevant products pages, blog posts provide a rich context that encourages higher conversion rates.  Such content should also be re-purposed for use in white papers,  e-books, emails, social media, etc.

RICH MEDIA

Additional merchandising strategies emerged as more consumers acquired broadband internet access and e-commerce brands added power and speed to their web servers. This gave consumers greater opportunities to manipulate product images (e.g., rotate, pan, zoom, change colors and backgrounds, see how they look on a model or a photo of oneself). Audio clips can add character to avatars used to help sell products on site. Flash and Videos show how products can be used across time and space and are especially effective for conveying the lifestyles associated with products.

SOCIAL SHOPPING

Of course, people (especially women) often like to shop with their friends because it adds to the “fun factor” and enables them to get opinions from people who they trust and respect. This broadens the selection (“how about this one?”) and helps close the deal (“that looks great on you!”). By offering user reviews, testimonials and discussion forums, e-commerce sites are able to provide some of the benefits of social shopping. By encouraging customers to share what they like within their own social networks (e.g., Facebook, Twitter, YouTube) they are to obtain feedback from their friends and followers. By “voting” on them on such sites as Digg, Delicious and StumbleUpon, they get additional opportunities to share their preferences with, and receive feedback, from others.  Other innovations, including publishing FAQs and providing web chat or click-to-phone capabilities,  provide social opportunities that compensate for in-store salespeople.

THE FUTURE OF ONLINE MERCHANDISING

Soon, such innovations as screen-sharing will become easier to use so that friends can indeed shop online together while geographically separated. People will be able to comment to one another via texting to their friend’s screens while they shop. Applications for iPhones and Tablet PCs will further provide a fuller, more immersive shopping experience and allow for better geo-targeting (e.g., present different products to people on the East Coast, West Coast, in different climates or within cities, suburban or rural areas). And although 3D web environments such as Second Life have not yet caught on in any major way, their ability to simulate real-world shopping experiences are likely to further enrich merchandisers’ future ability to convert browsers to buyers, increase average order size, frequency of purchase and the lifetime value of customers. After all, isn’t this what its all about?

What types of merchandising do you use or envision to facilitate e-commerce?

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