When augmenting a process, it’s important to anticipate how well the new framework, employee, or tactic integrates with the current flow of business. 

Interruptions could mean loss of momentum, less productivity, and failing to hit important goals. 

Why adopt merchandising?

Many eCommerce stores currently focus on advertising as their primary source of growth. ECommerce managers fear any workflow or process that interrupts this process. They want fine-tuned advertising workflows to ensure good data utilization and preparedness when products are ready to be scaled.

However, lost in the planning and execution of these processes is their primary objective: to grow their business profitably. Marketing managers, eCommerce specialists, and now merchandising experts are not valuable because they run good advertising processes, they are paid because they use advertising to achieve business objectives.

For many, common digital advertising practices are sufficient but objectives are a moving target and senior leadership always wants better results. It is important for marketers to always be a step ahead of clients, stakeholders, and their bosses. Adopting eCommerce Merchandising strategies should help with this.

The good news is that despite fear of change, eCommerce Merchandising frameworks are already part of your business, you may just be conceptualizing it differently. 

You likely spend more time on advertising, but pricing, promotions, and content are still part of your daily workflows. You just view these other factors in service of advertising not in service of your objectives. 

By learning how to integrate a merchandising strategy into your workflow you can leverage the 4Ps towards your objective. 

However, if you want a simple solution that saves you from late nights and headaches, sign up for Trellis.

How to think about online merchandising strategies?

Merchandising products online is as simple as understanding the marketing mix. By augmenting the evergreen 4P framework, we highlight the factors most important to your merchandising strategy.

These factors are:

• Placement of Advertising,
• Product Content,
• Pricing, and 
• Promotions.

Viewing the 4Ps through this lens helps you activate merchandising tactics and strategies your business is already tackling. 

Placement of Advertising

Traditionally, placement in a marketing strategy denotes both the time and place you plan to use to reach a target market. Similarly, placement in eCommerce is about accessibility. 

Key factors in fuelling this accessibility is advertising placement, whether it is through keywords, different marketplaces, or across marketing channels. The goal is to put products in front of users when it is relevant.

While many factors go into understanding the placement of advertising some of the most important are:

• Marketplace and marketing channels,
• Keywords,
• Bids,
• Ad types,
• Other types of targeting like remarketing and contextual targeting, and,
• Time of day, month, and seasonality for advertisements.

All are important to attain the right attention for merchandising your products for online shopping. 

Product Content

Humans who are capable and discerning usually don’t select the first product they see. They consider other factors such as the product’s content before making a decision. 

Product Content is a representation of a Product from the 4Ps of Marketing. It is important to consider how, and what, to communicate. In a world like Amazon, noticeable product differentiation is hard to come by. 

The competition is fierce when you’re next to pages of other brands. It is vital to optimize product content to match the expectations of customers when creating an online merchandising strategy.

Making the sale depends on:

• Quickly establishing your brand and its benefits,
• Highlighting unique features in your title and A+ content,
• Maximizing the number of positive reviews,
• Strong visual merchandising, and
• Refining the aesthetics of the listing through images and by meeting Amazon’s best practices.

Done right, you should see organic reach while also increasing the effectiveness of the Placement of Ads through better conversion rates. Optimizing these 2Ps makes up a large part of what advertisers do today. 

Price

Sometimes overlooked, pricing is a huge driver of purchasing decisions. 80% of shoppers say they compare prices before purchasing a product. It is vital to consider your price in your eCommerce merchandising strategy. When building one, understanding your price elasticity across your catalog gives you the knowledge to take on challenges as they emerge.

In Amazon’s competitive marketplace, customers have many product options and can easily compare prices. So, sellers must balance their prices to avoid losing customers or revenue. Good eCommerce merchandising also requires diligent price changes. 

Promotions

Promotions provide a similar effect to what a combination of good prices and advertising does for sales. Amazon Seller Promotions allow you to engage in shopping seasons, move extra inventory, and create cash flow. They are a vital part of most eCommerce merchandising strategies even if they are used conservatively. It is important to understand how promotions might impact a campaign.

If done right, promotions draw in new users like advertising but without a fluctuation in cost per sale. A discount of 10% is always going to cost you 10% of the product’s original price. 

This is unlike advertising where its cost could be any percentage of the products’ price when your campaign concludes. This means promotions give you exposure and increase conversions like advertising but keep the cost of the sale predictable.

Alongside this predetermined cost, merchandising specialists use promotion software to predict turnover. It models how effective certain discounts will be based on your past promotions. 

This means that if you need to move inventory or generate revenue, run a discount for as long as your model suggests. This predictability gives you freedom and information in how you run your merchandising strategies and business.

Integrating the 4Ps into your business

Understanding the 4Ps and their importance is one thing, but how can an organization structure them to achieve active business objectives?

Setting KPIs for your eCommerce Merchandising strategy 

To start, create KPIs that connect with your objectives. Based on these KPIs you can start to evaluate how to use a P to meet your goals. 

Depending on your objectives, your KPIs may be different but we recommend starting with establishing KPIs for:

• CPCs, 
• Total Sales, and 
• Return on 4P costs which can be represented in a number of ways like Profit margin, ROI, or RoAS.

Then set benchmarks to build a spectrum of suitable criteria for your 4Ps. Ideally, this criteria is realistic and based on your current performance.

These benchmarks will allow you to segment your 4Ps to optimize the variables you are already trying to improve, whether it is identifying a set of keywords, a range of prices, or a type of discount.

As you strive towards an objective, you can optimize these in the way that most actively contributes to your objective.

4P Segmentation

At a high level, this means identifying which prices, promotions, placements, and product content are good for certain objectives. For example, a business focusing on profitability may only use keywords with the lowest ACoS and highest prices for healthy profit margins.

However, this often comes with a trade-off. In a scenario where a business only wants to use its keywords with the best ACoS, the business has to accept that sales may slow down, as the keywords with the best ACoS could be a few niche search terms without a lot of traffic. This can hinder marketshare growth. 

This stresses the importance of 4P segmentation; it allows a business to be flexible and approach challenges in different ways rather than using the same keywords, ad types, prices, and promotions for every objective. Below, we show a simple example of segmentation that you could do using your established KPIs.