E-commerce Research Archives | Blog

Personalization: It’s Kind of a Big Deal

Posted by Cheri WinterbergOctober 15, 2018E-commerce Research, EPIC, Personalization, Uncategorized

Imagine entering a store customized for you. The sales staff anticipates your unique needs, knows your sizes and tastes, and offers discounts on products you actually want. They make relevant suggestions so you don’t miss out, pointing to things you’re sure to like but may not have otherwise noticed. And they remember your previous purchases, recall what worked and what didn’t, and strive to make this visit even better than the last.

It’s every shopper’s dream come true.

In the not-so-distant past, highly-personalized retail experiences like this existed only for elite consumers. Upscale retailers vying for wealthy customers used personal shoppers and concierge services to ensure select clientele were shown products perfectly suited for them. But in the digital age, what was once an exception for the rich and famous is now within the reach of every shopper. And today’s consumers aren’t merely accepting personalization – they demand it.

Why the demand for personalization?

With so many product options, it’s easy for online shoppers to get overwhelmed and become dissatisfied. And when shoppers become dissatisfied, they abandon carts and brands. Personalization delivers a solution. High-functioning personalization strategies enhance a shopper’s journey and mitigate these frustrations. The result? Most consumers today (91%) opt for retailers who offer a personalized experience over those who don’t.

Just how deep does the desire for personalization run?

Deep. Consider this – a survey by Salesforce revealed a whopping “82% of customers will share relevant information about themselves in exchange for connections between their digital and in-person experiences” and “85% of customers will share relevant information about themselves in exchange for proactive customer service.”

With numbers like this, it’s clear that growing personalization is imperative for retailers interested in getting – and keeping – customers.

And savvy online retailers haven’t failed to notice the increased demand. According to SLI System’s H1 2018 E-commerce Performance Indicators and Confidence (EPIC) Report, one-third (33%) of retailers across the globe say their companies are already giving their customers a personalized online experience and almost half (49%) plan to add it in the next year. In fact, only 7% of retailers worldwide say they are not adding some form of personalization to their e-commerce strategy.

As e-commerce professionals know, Customer Experience can either entice customers to return or drive them to the nearest competitor. And it’s clear personalization is a must in order to deliver a strong customer experience. But personalization isn’t a single-faceted entity. What’s more? Choosing the correct personalization strategies can make or break a shopper’s online experience – and the bottom line.

So how are e-commerce businesses personalizing and how do they plan to expand?

SLI’s EPIC Report indicates that with 57% of those surveyed saying it’s already in use, Emails Triggered by Online Behavior is the top way retailers currently personalize for their online shoppers. And it’s no surprise. MarketingDive explains that personalized email subject lines “can increase open rates by 50% and lead to 58% higher click-to-open rates.” The second most common way to personalize is Recommendations Based on Online Behavior (55%) followed by Segmentation Based on Demographic Data and Offers Triggered by Online Behavior, which tied for third (34%).

Underutilized strategies offer unique pathways to personalization.

Less used forms of personalization reveal opportunities to improve customized shopping experiences through a variety of alternative strategies. But which strategies can retailers use to take advantage of these opportunities? SLI uncovered that Persistent Profiling through a Data Management Platform (DMP) is the least utilized method of personalization with only 6% of those surveyed reporting it is currently in use. DMP is closely followed by Offers Triggered by Offline Behavior (7%) and Recommendations Based on Offline Behavior (9%).

To be successful, personalization must actually be personal.

Conversant found irrelevant content is the number one way to frustrate shoppers and lose sales. So how do retailers ensure their customers’ personalized experiences are, in fact, personal? Tracking and utilizing online behavior in the right ways. And e-commerce strategists are taking advantage of expanding technology in this arena. SLI discovered the top ways retailers plan to expand personalization all center on online behavior.

"Offers Triggered by Online Behavior" is the number one way retailers plan to add personalization to their e-commerce site. The top approach selected for implementation this year by 42% of retailers is Offers Triggered by Online Behavior. It was followed by Emails Triggered by Online Behavior and Category Page Results Based on Online Behavior 38% each in second place. Recommendations Based on Online Behavior took third place with 36%.

The Bottom Line

Finding out what your customers want and helping them get it through a personalized e-commerce experience isn’t just good for shoppers, it’s good for business. Sixty percent of those surveyed by SLI believe personalization will increase conversion rates. As technologies to improve personalization expand, retailers must take advantage or risk losing consumers to those who’ve embraced the growing demand for personalization.

For more on the latest trends in e-commerce personalization, click here to download the H1 2018 EPIC Report.

Putting AI to Work for E-Commerce

Posted by Christina StublerMarch 2, 2018Artificial Intelligence, E-commerce Research

So if you watched our recent webcast you know that Artificial Intelligence has gone mainstream, accompanied by more than a little hype and big promises. But this 3^rd generation of AI is also providing some amazing value – much of it behind the scenes – powered by intelligent, predictive algorithms embedded in all types of software and devices, doing practical things.

Businesses who approach AI with clear goals have an opportunity to use the technology to transform the way they do business. Especially if they are aware of not falling into the “big AI” trap, and start by focusing on everyday problems, simplifying the customer experience, and looking for ways to use data along the buyers journey.

For e-commerce businesses, the machine-learning (ML) branch of AI has particular promise, especially with all the digital breadcrumbs and transaction data swirling around the typical omni-channel consumer relationship. Merchandisers have the potential to harness both big and small data to better understand their future buyers, and more effectively attract, engage and convert them.

Here are 4 takeaways from our session and my consulting days that can help online businesses put AI to work in the near term, even as they look forward to the next big thing.

Automate the big stuff, so you can focus on the details

You know your customers and which product features fit which needs, but how do you optimize online merchandising for hundreds of SKUs and thousands of buyers, and even millions of online posts or tweets, ideally in real-time? This is where AI comes in: sorting, matching, and generating insights that connect the dots between buyer profiles, product attributes, and the perfect online experience.

In my experience, “classic AI” is really good at chunking through data where there are established rules. And the softer, ML-based approaches are good at dealing with exceptions and discovering new relationships. Between the two, turning big (and small) data into these types of actionable insights is a proven use case that offers to free up merchandisers to focus on the art of selling and human-scale brand building.

Build around search and making it better

Consumers have been conditioned to search first (thanks Google!) so focusing on making products easier to find, and serving up the most relevant results is super-important. But unfortunately traditional search results are often long on results and short on answers. And those of us who have played around with search algorithms (and even programmed then in the past) know that search is the ultimate interface between man and machine, and thus require equal parts science and art, and a complete understanding of context.

Fortunately intelligent search features like predictive search and autocomplete (and soon visual and voice search) are some of the most established areas within AI and have reached a point where they are now available via add-ons to popular e-commerce platforms. MUCH easier than programming them yourselves!

Follow the data trail – especially the small data that reflects unmet needs

It’s always a good idea to observe your users, and look for bottlenecks in their buying process, whether you are running a corner store or a multinational etailer. See what they are buying and what they say about what they like by tracking social posts and reviews. Look at embracing agile merchandising on all your channels to streamline data collection and organizational learning.

More broadly, realize that while big data is about machines, small data is about people, as I’ve evangelized for the past 5 years! Plus as brand maven Martin Lindstrom has noted, these “seemingly insignificant behavioral observations” can in fact contain specific insights that expose an unmet customer need. Operationalizing these insights through a product recommendation engine for your website (or retail execution system in your stores) can turn insight into action.

Limit choices to drive conversions

At the end of the journey, you want to steer buyers to the right option – for you and them, while minimizing distractions. Real-time personalization powered by emerging patterns in transactional and behavioral data (such as the small data that represents the past week’s orders by location or social chatter from a certain customer group) can narrow the set of options while making each shopping experience appear “on trend.”

This is why next-gen recommendation engines, bots and other AI-powered “helper apps” are front-and-center on many online retailer’s shopping lists – and why Forrester predicts that in 2018 intelligent agents will directly influence 10% of purchase decisions.

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Retail Executive Brief: Customer Experience Trends for 2018

Posted by Bob AngusNovember 30, 2017Analytics, Artificial Intelligence, Customer Experience, E-commerce Research, eCommerce, Merchandising, Mobile, Mobile/Tablets, Personalization, Reporting and Analytics, User Experience

Customer Experience - Convert Buyers with a Great Customer Experience

The pressure is on for retail businesses to deliver on big sales growth expectations. That’s in the face of slow consumer spending growth combined with the tectonic shift in traditional retail channels.

You need to turn more shoppers into buyers. You can’t afford for your investment to bring more shoppers in the door or onto your e-commerce store that leave with an empty cart.

That’s why optimizing your customer experience is more important than ever.

This retail executive brief helps you better understand:

How customer experience strategies are evolving
What customer experience metrics to track and analyze
How to improve your customer experience using top trends in 2018

Let’s first dig into how customer experience is changing.

What is Customer Experience Today?

In the past, customer experience strategies focused on the discrete interactions shoppers had in the sales process. These touchpoints took on even greater importance with online retail channels simply because it was easier to track and optimize each webpage leading up to a sale.

However, this touchpoint-focused approach to improving customer experience can easily miss one critical element… the customer journey.

The journey is the customer experience.

The overall journey can still disappoint customers, even if your online store design, in-store layout and staffing are executed well on individual touchpoints.

Understand the customer journey in your shoppers’ terms. Customer journeys include many things that happen before, during, and after the actual purchase experience.

The journeys can be quite long, though the purchase decision can be extremely fast. Consider the multiple channels, devices, and, yes, direct interactions that may occur over days or even weeks.

Put yourself in their shoes. You buy products for yourself all the time. Think about your entire experience and why you made a purchase or didn’t.

Ask questions like:

Where and when did you first learn about a store?
What was your first impression of the brand?
What triggered you going in the store or to the website?
How easy was it to find what you wanted?
How did you feel about the product price and value? Product quality? Selection for you?
How did you feel about the shopping environment in-store or online?
What sales help, customer service or employee interactions did you have?
How did the purchase transaction go? Was it fast and easy?
How did you get your product? Was shipping fast? Did you need to exchange or return?

Always be asking how you can improve that journey.

Next you need to figure out if you’re on the right path to improvement.

Customer Experience Measurements for Success

How do you know you are improving your customer experience? You’ll want to look at the numbers.

It’s very tempting to dive right into the weeds. Retailers now have so many powerful analytics tools. And data collection is getting easier.

However, direct contribution to macro financial metrics and sales trends can be difficult. Remember, your customer experience is a holistic journey. So your best customer experience metrics are more macro. They are not necessarily analyzing and optimizing discrete touchpoints.

Start by measuring key customer experience outcomes, customer feedback, and employee feedback.

Financial Metrics

The most common outcome metrics are financial. Let’s assume you are already tracking total revenue, profit, and transaction volume. Great financial indicators of your customer experience is Revenue per Customer and Average Transaction Value.

Make sure to also track Revenue per Visit (RPV) for your online channel or if you are a pure e-commerce business. This metric estimates the incremental value of each visitor to your online store. Simply divide your total online revenue by the total number of unique visitors to your website.

Customer Satisfaction

You also need to measure your Net Promoter Score (NPS) to capture how customers feel about you. NPS is a fantastic customer satisfaction metric to track over time. Customer experience and customer satisfaction are closely correlated.

But the most actionable customer experience metric in your NPS comes from the answer to the follow-up question – “Why did you give that rating?”

Categorizing the results of this open-ended “Why” question helps you measure the impact on different factors in the customer journey in your customers’ terms. For example, you may group results by broad areas like customer service, products, or pricing. Or you can go more granular into the touchpoints like checkout experience, shipping, or return policies.

Learn more by further breaking down your NPS by customer segments. You can segment by geography, gender or age demographics, order revenue, or purchase frequency or recency.

Employee Satisfaction

Lastly, you should also measure your Employee NPS. Employee satisfaction is also highly correlated with customer experience. Happier employees lead to better customer experiences.

After all, your employees are most responsible for delivering a great customer experience. All your employees contribute. Even someone behind the scenes in HR, the warehouse, or web development have an impact that trickles into the experience.

Here again, look closely at the “why” to measure and track the drivers that influence your employees’ feelings. Those feelings result in behaviors and actions that directly and indirectly impact your customer experience. Listen to what they say and recommend.

Track these financial and satisfaction metrics consistently. That’s how you will know your customer experience is on the right path.They are your “North Star” numbers.

Once you’ve established those customer experience measurements, you can then go deeper into specific success metrics for operational improvement initiatives. Use Google Analytics and e-commerce platform results for your online channel.

Now let’s look at the latest trends you can leverage to boost your customer experience metrics and sales.

3 Technology Trends that Help You Improve Your Customer Experience in 2018

Retailers continue to leverage technology to improve customer experiences. Much of the change comes from consumer technology use as a pulling factor. For the first time ever, more people say they plan to shop online (59%) than in big box stores during the 2017 holiday season, according to the NRF.

Here are three technology trends that help brands connect better with customers and improve their overall customer experience.

1. Rapid Growth of Mobile Shopping

Mobile Traffic and Sales Statistics - Black Friday 2017 Cyber Monday 2017

The continued rapid growth of smartphone use is undeniably impacting retail sales. Similar to how e-commerce is the growth engine of overall retail, mobile sales are powering e-commerce.

The rising tide is driving much of that growth. Mobile traffic from smartphones and tablets peaked on Black Friday and Small Business Saturday (56% of traffic). Then leveled out to 46% of traffic, almost equivalent to desktop traffic (54%), through Cyber Monday 2017, according to Adobe Digital Insights.

However, the mobile shopping experience is a challenge for retailers. Smartphones and tablets earned a lower percentage of overall sales (30% versus 70% for desktop) and lower conversion rates through Cyber Monday.

Retailers can close more sales with mobile shoppers by continuing to improve their mobile customer experience. Shoppers now find mobile as an easy way to check emails (hopefully your emails), find store locations and hours, get product information, snap and share photos, and compare prices.

Optimizing mobile product discovery and mobile payments are the biggest opportunities for retailers to improve the mobile customer experience.

2. Personalized Merchandising with Artificial Intelligence

Customers want a personalized shopping experience. Sales people help shoppers in the store. Now application of artificial intelligence are helping online stores create a similar personal customer experience.

Online stores have massive amounts of behavioral and transactional data now. The challenge is to harness that data to power real-time merchandising decisions.

That’s where artificial intelligence excels.

Fifty-four percent of e-commerce sites have already implemented or plan to add AI in the future, according research from the Q3 2017 E-commerce Performance Indicators and Confidence Report. And 20% expect to add AI within the next 12 months.

The top application is personalized product recommendations. Eighteen percent of online retailers report they are already using artificial intelligence in their product recommendations strategies. But that number will swell dramatically in 2018 with 38% planning to implement within the next 12 months.

Personalized Product Recommendations Engine - King Arthur Flour

Artificial intelligence can parse user activity, preferences, and sales trends. The result is smart and timely product recommendations that are personal. For example, this type of contextual personalization can be tuned to gender, clothing size, brand preference, or shopper’s location.

Even better for online retailers, this personalization can be experienced by first-time visitors just as well as returning shoppers. So the shopper does not have to take any additional actions to receive the customer experience benefits.

3. Always on Customer Service with Chatbots

Chatbots were introduced as a new technology on the horizon for retailers in our 2017 e-commerce trend webinar. In 2018, chatbots are a must-have element of your online customer experience.

Ecommerce Chatbots - Retail live chat is always on

Think of chatbots like your online version of a sales associate or employee. Except they are always on 24/7/365.

A chatbot is an enhancement from the online chat communication channel. The old chat program still required a human sitting there typing in replies. Those employees had regular shifts. So sometimes customers weren’t getting their questions answered.

Now a chatbot is an always-on program that simulates the conversations your customers have with you. It answers questions, handles specific requests, helps shoppers choose the right product, and executes customer service procedures.

Your customer experience impact is shoppers have better and faster access to what they want when they want it. That’s a huge win. And you win more sales.

Customer adoption, and the resulting better experience and sales, is the biggest reason why chatbots are growing in e-commerce. Additionally two technology drivers are accelerating the deployment of chatbots – smartphones (again) and artificial intelligence (again).

Smartphone use is leading to speaking with a chatbot. Talking is easier than typing. Just say what you need and the chatbot tells you back. Siri, Alexa, and Google Assistant are all voice-enabled chatbots that are quickly growing is use.

Artificial intelligence is helping chatbots be more effective. The chatbot can repeat existing information easily and can be taught to mimic decision-making patterns. But artificial intelligence makes a difference by helping chatbots to actually learn. So your customer experience is continuously improving.

Design Your Customer Experience to Win More Sales

Planning and executing your customer experience strategies is a process of continuous improvement. Deeply understanding your customer’s journey sets you on the right path.

Take advantage of the key trends and technologies. Then test your innovations, measure, and optimize for the satisfaction of your customers and for the results that matter to you.

Ultimately, you can achieve what creative executive Loie Maxwell calls “designed serendipity”. Orchestrate the experiences that produce a customer journey that gives them a winning feeling. Your customers will love it. And you will win more sales.

Is Your Customer Experience Leaking Sales?

Most businesses are leaking online sales in at least 7 critical elements of their customer experience.

The Customer Experience Scorecard grades your e-commerce site using a 42-point checklist proven to increase sales, including:

Quickly finding products shoppers are most likely to buy
Personalized product recommendations
Mobile path to purchase

Want to find your leaks? Find out your quick-win opportunities to take your conversion rates to the next level.

AI in E-commerce: Boon or Bust?

Posted by Kim Presser, Director of SalesNovember 22, 2017Artificial Intelligence, E-commerce Research, Uncategorized

Advancements in artificial intelligence (AI) in e-commerce made headlines everywhere this last year:

1-800-Flowers.com launched Gwyn (a.k.a. Gifts When You Need Them). Within two months, 70% of online orders were completed through GWYN. See learnings.
North Face’s conversational engine has the potential to run tens of thousands of consumers through its Q-and-A interface.
A Boch Toyota dealership attributed a 60-sale increase per month to the authentic-sounding messages of Conversica “sales reps.”

But what does the future look like for AI in e-commerce?

SLI set out to answer this question by asking more than 200 e-commerce professionals in its third quarterly 2017 E-commerce Performance Indicators and Confidence Report. The responses were revealing. While more than half (54%) have already implemented or plan to add AI in the future – including 20% who expect to add AI within the next 12 months – there remain substantial opportunities for growth and education in AI.

About a quarter (24%) reported not understanding how AI can be applied to e-commerce at all, and more than one-third (39%) said that while they understand AI’s e-commerce applications, they weren’t sure how it applied to their specific business. These responses reveal a huge opportunity for online retailers to learn about emerging and existing AI applications that improve CX and the bottom line.

The Most Popular AI App in E-commerce

When asked how they’re using or planning to use AI, retailers reported the most-popular applications slated for implementation within the next 12 months were Personalized Product Recommendations (57%), Customer Service Requests (40%) and Chatbots (35%).

However, not all AI apps are popular on the e-commerce front – Virtual Reality and Voice-Activated Apps (90% each), Augmented Reality (85%) and Virtual Buying Assistants (79%) all had large percentages of respondents expressing no plans to use them in their businesses, now or in the future. Not surprisingly, VR and AR headset shipments are also experiencing slower growth than expected. Ecommerce Artificial Intelligence Applications Research Chart - EPIC Report Q3 2017

Cross analysis by geographical region exposes where AI is hot and where it’s been placed on the back burner. In the top three regions surveyed, current AI use is most prevalent in the U.S, with 17% of U.S-based respondents reporting it is already in use. This is closely followed by the the AU-NZ region (15%) and the UK (14%). However, retailers in the UK report the most aggressive plans for implementing AI with one-third (33%) expecting to leverage it within the next year, followed by the U.S. (17%) and the AU-NZ regions (15%).

In line with the cases and findings above, McKinsey uncovered that companies invested $26B to $39B in AI in 2016 and PwC found 72% of business decision makers believe AI will be the business advantage of the future. Without a doubt, the AI revolution is poised to be a boon for retailers.

E-commerce Merchandising: The Ultimate Guide to the Newest Techniques

Posted by Bob AngusNovember 16, 2017Analytics, Artificial Intelligence, Customer Experience, E-commerce Research, eCommerce, Merchandising, Navigation, Navigation Tips, Personalization, Recommendations, Refinements, Resources, Rich Auto Complete, Site Search, Site Search Tips, Testing, User Experience

E-commerce merchandising has one goal in mind – connect shoppers with the right product so that they “Add to Cart” fast. Merchandise well and you’ll increase conversion rates and boost your average order values.

But execution is always incredibly difficult.

You have different visitors with different mindsets toward actually buying. Those shoppers are engaging with different parts of your website through their shopping journey.

On top of that, you have to wrangle massive SKU quantities, constant product and pricing changes, and frequent promotions.

E-commerce merchandising is complex.

It is no longer as simple as choosing the products you want to move, setting an attractive discount, and plastering the offer all over your valuable real-estate.

You need to figure out what each shopper is most likely to buy right then.

The leading retail brands are employing the newest e-commerce merchandising techniques to successfully unlock the complex code to winning more sales. They approach effective merchandising along three dimensions:

Understanding different customers need different merchandising strategies
Deploying the right techniques along the shopping journey
Delivering the right product that is most likely to be purchased

Plus, they’re using data to drive that complex decision at scale. And you can too.

Let’s breakdown what you can do to optimize these three elements… and dramatically increase your sales.

Customer-Focused E-commerce Merchandising Strategies

“Traditional” merchandisers that worked for brick-and-mortar retail stores often had a pure product buying background. They would master the data. But that mastery focused inward to the business for the purpose of increasing unit volumes, maximizing margins, and avoiding too much unsold inventory.

Yes. You still need to successfully manage your product buying to be profitable through your online channel. But you also need to understand what’s pulling through those sales and why.

Today, world-class merchandisers start from a different perspective. They think about the customer first. Then they apply their product expertise and merchandising skills to fit what their customer segments want.

You will want to incorporate specific merchandising strategies to help win these different types of customers – from visitors “just browsing” to your most valuable returning buyers.

Earn loyalty with returning visitors and customers

The first segment of shoppers you should consider are your return visitors and previous buyers. Why? Your conversion rates should be significantly higher than first-time visitors.

Better yet, you have some easily executed tactics available to boost extra sales.

Ecommerce Merchandising Strategy Product Recommendations - Crate and Barrel Home Page Screenshot

Crate and Barrel promotes “Recently Viewed” items on every product page. This makes it super easy for a returning visitor to jump right back to what they were interested in, without having to browse around your site.

This product recommendation strategy also works great on major entry points into your site like the home page or in your shopping cart.

Another source of product data to use for “personalized” products recommendations is your customers’ wish list shopping cart history. These customers have already clearly indicated exactly what they want. So you should boldly give it to them.

Other uses of your visitors’ shopping history include:

Highlight a special promotion for wish list items
Recommend complementary products that go great with a recent purchase
Show a reminder for abandoned cart items
Add an easy “Order Again” button
Create custom product landing pages for shoppers who clicked your retargeting ads

All of these online merchandising strategies can help grow loyal, repeat buyers and encourage returning visitors to buy more.

But what if someone is a first time visitor? Fortunately, there is another segment of high-value shoppers that you can convert with powerful merchandising.

Win high-purchase intent shoppers

Certain customers come to your site ready to buy. The question is: Are they going to buy from you or go to your competitor?

Who are these high-purchase intent shoppers? They are the visitors that use your site search functionality. SLI studies have found that visitors that use search buy at a 2.7x greater rate than visitors who just browse.

Search users have indicated exactly what they want. They often include a specific product option like a color, size, or material in their query. So you need to quickly get them to the product page for the best selling match.

Don’t make these folks navigate their way to what they want. No extra clicks. You’ll likely lose them even if you have a great price and an amazing free shipping offer.

In fact, there is one merchandising technology that dramatically helps you convert these must-win buyers – autocomplete.

A great autocomplete example is e.l.f Cosmetics. They go beyond simply displaying matching text keywords as the searcher types. They display specific product results while adding visual merchandising with appealing product images.

You are more likely to convert these shoppers by showing a product, not a category. Again, less clicks and browsing is what you want.

That’s just the start. Lock in more sales from high-purchase intent shoppers with other tactics that use search data to improve merchandising.

Now let’s turn our attention to another customer segment, who likely make up the majority of your traffic.

Convert browsers into buyers

Some customers have an idea in mind but may not be ready to buy. In a brick-and-mortar retail analogy, these folks are the “No thanks. Just browsing” shoppers.

They may be “looky loos.” However, your merchandising can effectively nudge these visitors toward a purchase.

Classically online retailers attempt to attract these browsing shoppers by promoting categories or themed product groups like seasonal or clearance categories. However, this approach just keeps them clicking through your site and you hoping they stumble on something that sparks a sale.

And that’s one of the big reasons why many visitors leave an online store with an empty cart. The merchandising kept them in a browsing mindset, not a buying one.

Do not be afraid to promote specific products. Smart online merchandisers are now curating and promoting sets of individual products, not general categories, on their highest traffic pages.

Product Recommendations Strategy - FTD Best Sellers Screenshot

FTD.com gives a big portion of their home page to promote their Best Seller products. What those product recommendations do is switch the shopper to an active “Oh. I need that too.” mindframe. And out of a passive “just looking” mode.

Tap into your massive SKU list to find the top sellers, new products arrivals, seasonal products, or specific sale items. Use your merchandising data analysis expertise.

Then continually test which products are getting the most clicks and conversions.

Simply promoting specific products can help increase the possibility of an impulse purchase, or more likely, can create a desire to come back to your site when they are ready to buy.

Now that you’re thinking from a customer perspective, let’s take your merchandising strategies to the next level. You can optimize the customer experience by where those visitors are on your site.

Merchandising Best Practices For E-commerce Websites

There is a flow to how people shop.

A brick-and-mortar retail store starts merchandising right up front as you walk in the door. Then throughout all the aisles, displays, and checkout counters. The whole store experience is intentionally designed to drive more sales.

An online customer experience also has its flow. Your e-commerce shopping journey can be designed to maximize sales too.

Every part on your site is a merchandising opportunity – the home page, navigation menus, category pages, product pages and your checkout pages.

Hundreds of online site search tips and navigation best practices have been published that can have a big impact on your sales.

Here are the top online merchandising tactics for your e-commerce website that are red hot right now.

Visual Merchandising on Product Pages

Let’s start where customers most often click “Add to Cart” – the product page.

Many elements of the product page help merchandisers showcase that that this is the right product at the right price – product title, descriptions, specs, purchase options, ratings, reviews, and, of course, pricing and discounts.

This information appeals to the rational part of your shopper’s brain.

The part that usually makes the ultimate buying decision is the emotional part of the human brain. That’s where online visual merchandising excels.

Ecommerce Visual Merchandising - Boden Product Page Screenshot

You also want to show off your products. Boden uses model videos, shows products from many angles, and switches custom images by color selection. These extra images give shoppers context when they can’t actually hold the item in their hands. You want them to easily envision what their experience will be after the purchase.

To help shoppers visualize, update product pictures instantly when they select different options like color and allow shoppers to zoom in to the smallest details.

Also, show action shots and product videos that depict how the product is used, what the buyer gets in the box, or how to install it.

Now augmented reality applications are being tested too. From arranging virtual furniture in a picture of your home to trying on different outfits in selfie mode on your smartphone, this next generation of visualization is an e-commerce merchandising innovation you will want to explore.

Personalized Product Recommendations

Product recommendations have long been a valuable online merchandising tool. You can tune your recommendations strategies using best practices for each different page on your site. Now recommendations technology is getting even smarter.

Smart product recommendations are personalized to the individual shopper in real-time. The products displayed adjust automatically based on user activity, preferences, and sales trends.

E-commerce Personalization - Footwear Etc Screenshot

Footwear etc. adds a level of personalization based on gender. Product recommendations, search results and category pages use the products or pages previously viewed by the shopper. If a shopper starts out browsing women’s sandals, then recommended product results would boost women’s shoes or accessories on subsequent pages. The screenshot above shows before and after results when a shopper searches for “leather boots”.

This type of contextual personalization can be tuned for many different facets, including gender, size, brand preference, or location.

Not only are these higher-converting recommendations displayed in real-time, but this personalization works for first-time visitors just as well as returning shoppers.

Complementary Sales in the Shopping Cart

You also want to extend those product recommendations to your shopping cart and checkout experience. Just like your grocery store places a rack of candy and magazines in the checkout line, online stores have a great opportunity to capture extra sales right at the point of purchase.

Only for online stores, this upsell merchandising strategy can be even more profitable.

Again, you can personalize the products you merchandise based on real-time data. You know what products they have added to their cart. You know the other products they have viewed.

And most importantly, you know what other products complement those items.

Online Merchandising Product Recommendations in Shopping Cart - Swiss Colony Screenshot

Swiss Colony promotes “Customers Also Purchased” at the beginning of their shopping cart experience.

Other popular recommendation strategies in the checkout experience are “You may also like” and “Complete the set.”

Just be careful to use complementary products. Do not necessarily use the exact same product recommendation logic as your product page. You don’t want to accidently promote an alternative to the product your customer has already decided to buy.

At best, that mistaken recommendation is ignored, meaning a wasted upsell opportunity. At worst, your customer stops and doesn’t complete their order because now they’re not sure if they’re buying what they really want.

So make sure that you are tuning the product recommendations in your shopping cart to complementary products that add to your sales, not disrupt them.

Now let’s use powerful data analytics and technology to deliver the best results without extra work.

Merchandise the Right Product to Win the Sale

You understand the customer. You know how to merchandise for each step of the online customer experience.

Now we can put it all together with great data and your product expertise to personalize the shopping experience… and get the sale.

Data Mining for E-commerce Merchandising

Your website analytics, your product systems, and your e-commerce platform transaction system combine to provide an astonishing array of data. That data can be mined and used to fuel your merchandising decisions.

You just need to look at what you have.

Data you know about your customer:

Your website analytics software offers useful demographic information about your customers and deep insights into what they are doing on your site.

Here are some of the most useful data types that can help your e-commerce merchandising strategy:

Traffic Channel: Where did your visitor come from?
History: Are they a first-time visitor or returning shopper?
Behavior: Where did they go on your site and what did they do there?
Gender: Are they female or male?
Age: How old are they?
Device: Are they on a mobile device, tablet or traditional computer?
Geography: Where in the world are they?

Now pair that up with what you know about transactions stored in your e-commerce platform.

E-commerce Platform Data:

Every past purchase provides information that helps you understand what customers are likely to buy in the future.

Product Sold: What product exactly is purchased?
Options: What sizes, colors, styles, and other product options are purchased?
Price: How much did it cost and what was the discount?
Order quantity: How many did customers buy per purchase?
Time/Date: When did the purchase occur?
Payment Method: How did they pay – credit card type, PayPal, on credit/layaway?
Shipping: How did the customer want this delivered?
Abandoned Carts: What products are selected but never actually purchased?

Best selling products should always be at the top of your merchandising list. But there is even more product data available to you. And that’s your merchandising experience.

Data from your experience:

Lastly, your own experience and intuition adds the special sauce to your merchandising data recipe.

Social trends:What’s hot right now with your customers?
Brand trends: What product brands can help pull in buyers?
Seasonality: What holiday or seasonality drives purchases?
Inventory: How much is in stock?

Compile all of this data, analyze it, and determine what products your customers are most likely to buy right now.

However, the challenge with the plethora of available data is… there’s so much data. It’s incredibly difficult and time consuming to effectively wrangle all the valuable data to merchandise to every single visitor on every single webpage for all your products.

That’s where new artificial intelligence technology helps.

Artificial Intelligence Fuels E-commerce Automation

Automating your data processing to power real-time merchandising decisions is quickly becoming a must-have for online retailers.

Fifty-four percent of e-commerce sites have already implemented or plan to add AI in the future, according research from the Q3 2017 E-commerce Performance Indicators and Confidence Report. And 20% expect to add AI within the next 12 months.

So what is the most popular applications for AI right now?

Not surprisingly, merchandising techniques are at the top. Personalized product recommendations is number one. Fifty-six percent of online retailers report that they are already using artificial intelligence in their product recommendations strategies (18%) or plan to implement within the next 12 months (38%).

Other merchandising solutions and visual merchandising technologies are also being accelerated thanks to AI. Virtual buying assistants, chatbots, visual search, augmented reality (AR), and virtual reality (VR) are all designed to help shoppers purchase the right product fast.

More automation definitely helps maximize results in less time. And in new ways.

But is artificial intelligence going to take your merchandising job away? Absolutely not.

You won’t hand over the keys entirely to your automation systems. You need to maintain a mix of merchandising techniques and always be testing to get the maximum results.

Testing Your Merchandising Strategy Mix

“Always be testing” is more than just a matra. It’s a requirement to truly maximizing your conversion rates and your total online sales.

Most every online retailer tests performance of different on-page merchandising elements. That helps determine your optimal page design. For example, a simple A/B test of your search box location can pay off big by converting high purchase-intent shoppers.

Or determine how many products should be displayed in your product recommendations. Pro tip: SLI Systems’ merchandising best practices show that 4 or 5 products are ideal. And that scrolling carousel presentation of more products doesn’t generate significantly more incremental sales.

Another high-impact test determines the best rules for your site search and product recommendation results. Keyword matching algorithms alone likely do not give your shoppers the most relevant product results, which lowers your conversion rates.

Merchandising-savvy online retailers use a prioritized mix of multiple rules to drive the most sales. They combine artificial intelligence results with pre-defined tuning rules, product and category keyword matching, and sales leader products to generate the maximum online revenues.

More E-commerce Merchandising Tips

The key to your online merchandising success is to figure out what each visitor is most likely to buy.

It’s not easy. But you can drive many more sales leveraging a deep understanding of your customers, the latest technology, and the leading edge online merchandising strategies.

We’ve shared the newest merchandising techniques here. And you have many more proven strategies and tactics available to you. Make sure to grab the hundreds of site search best practices, e-commerce navigation tips, and watch what leading retail brands are doing in these online merchandising webinars.

Survey Says . . . Amazon More E-commerce Foe Than Friend

Posted by Christina StublerApril 27, 2017Amazon, E-commerce Research, EPIC, Uncategorized

epic-competive-threats-chart Whether friend or foe to your online business, Amazon marketplaces are shaking up retail norms globally – from personalization to fulfillment. Even with Walmart and Jet.com encroaching on Amazon’s discount market share, the online mega mall added “tens of millions” of new Prime subscribers in 2016, reports investor site Motley Fool.

Add consumer expectations for relevance, price and fulfillment speed, and retailers face notable challenges in attracting, converting and keeping customers online as they seek to nab their share of retail e-commerce sales that eMarketer forecasts will top $27 trillion in 2020.

Findings in SLI Systems E-commerce Performance Indicators and Confidence (EPIC) Report illustrate the level of concern about various marketplaces among global online and multichannel merchants. The report provides insight from more than 200 e-commerce professionals — nearly 40% of whom sell on at least one Amazon marketplace, with 42% selling on additional marketplaces.

The key takeaway? Only 6% say Amazon is less of a threat.

“The Amazon Factor”

The e-commerce giant continues to challenge online businesses worldwide, with 11 Amazon marketplaces across North America, Europe and Asia.

Only 6% of the SLI study respondents feel Amazon poses less of a competitive threat. Thirty-two percent of U.S. respondents and 38% of those in the UK report that Amazon is more of a competitive threat compared to the same quarter last year.

And in Australia, where Amazon reportedly plans to open a new marketplace, 47% of respondents viewed the e-commerce giant as an increased threat.

Interestingly, Australian merchants chose “Advertising or Paid Search” as their top online retail initiative for the quarter, potentially indicating that the region’s merchants are gearing up for heightened online competition.

Other Mega Competitors

When it comes to Walmart and Alibaba, the “threat level” depends much more on region. Eighteen percent of the study’s U.S. respondents view Walmart/Jet.com as more of a threat. However, a majority of respondents in the UK (67%), Australia (60%) and New Zealand (62%) said the mega retailer was not a threat to their particular online businesses.

Looking at sentiment about Alibaba, the marketplace is a notable contender for APAC, where 20% of Australia-based and 31% of New Zealand-based merchants view Alibaba as more of competitive threat to their online business in Q1 2017 compared to the same quarter last year.

Whether selling on Amazon (friend) and/or competing with Amazon (foe), online retailers are having to keep pace with the giant as it sets the bar for the front office as well as the back office. When asked to select the single most important initiative for their online retail business, Customer Experience earned the top spot from 26% of all respondents, followed by Inventory, Logistics and Fulfillment, which earned 14% of the “votes.”

To learn about practical ways to combat Amazon, read the The Ecommerce Secret Weapon You Haven’t Heard Of on MediaPost’s SearchMarketingDaily.

Findings in the SLI Systems EPIC Report for Q1 2017 are based on a survey conducted between February 6, 2017 to March 6, 2017. For a copy of the full chart-packed report, visit: http://sitesearch.sli-systems.com/Epic-Report.html

New SLI Report Finds E-commerce Confidence Strong Globally

Posted by Chris Brubaker, Chief Marketing OfficerApril 7, 2017Customer Experience, E-commerce Research, EPIC, Uncategorized

The Q1 2017 EPIC Report found widespread confidence among online retailers with 94% of respondents selecting at least one area of planned growth during the first quarter of 2017.

I am excited to share SLI Systems’ debut E-commerce Performance Indicators and Confidence (EPIC) Report with you. The Q1 2017 EPIC Report includes findings and analyses from an in-depth survey of retail professionals worldwide and a look at consumer behavior trends based on more than 1.5 billion site search queries.

Survey findings in the first-quarter report represent a mix of retail business models, including pure e-commerce, as well as omnichannel merchants. In addition, 87% of the 200+ respondents work in a manager position or above – with 20% holding VP- or C-level positions. The responses, collected between Feb 6-March 6, 2017, come from a qualified cross-section of retailers around the world, offering a solid benchmark for us to compare retailer confidence and shopping behavior regularly.

We have included dozens of colorful charts in the 13-page report to illustrate the Respondent Overview, Confidence and Performance Indicators, Top of Mind (anticipated business impact of the new U.S. presidential administration) survey findings, as well as Search Trend Analysis, which looks at the average number of words in a site search query.

The best news? Ninety-four percent of retail professionals surveyed expected to expand their businesses during the first quarter.

Here are some other highlights:

Confidence – Eighty percent of respondents expect an increase in online revenues and profits, and 46% expect an increase in in-store revenues and profits.

Key Performance Metrics – Comparing Q1 2017 to Q1 2016, metrics include, among others, that 71% expect increased site conversion (CVR) and 76% expect a decrease or no change in their fulfillment costs per order.

Top Q1 Initiative – With 26% of the “Vote” Customer Experience earned the top spot among priorities. Inventory, Logistics & Fulfillment was second (14%), followed by Mobile Site (12%).

Mobile – An impressive 73% of respondents expect an increase in mobile transactions. Among those who cited mobile as their top initiative, the group selected “Mobile Site” six times more than “Mobile App.”

Amazon – Thirty-two percent of U.S. respondents, 38% of those in the UK, and 47% in Australia, see Amazon as more of a competitive threat compared to the same quarter last year.

Trump – U.S. retailers generally anticipate the new U.S. administration will have a positive impact on corporate taxes, a negative impact on selling internationally, and no impact on online sales taxes. Twenty-three percent of UK respondents expect it will have a somewhat or very negative impact on their online business.

As a global provider of cloud-based e-commerce solutions and services, SLI is in a unique position to analyze retailer confidence and online shopping trends. We hope that EPIC quickly becomes a useful resource for you to check the “pulse” of the e-commerce sector globally.

The complimentary report is available for download. Let us know what you think at research@sli-systems.com, and be on the lookout for future EPIC surveys. We’ll send you the resulting report once it’s published.

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