With the overwhelming positive response to Angelica’s first article, Top 6 Questions to Ask When Pricing a New Product, we’ve invited her back to talk more about pricing and merchandising. Merchandising is all about displaying products effectively to encourage shoppers to make a purchase. Brick and mortar and online retailers have really gotten the hang of merchandising and repricing, respectively. However, they could each learn a thing or two from the other. There are a few different ways to bridge the gap between physical and online stores, and integrate the strengths of both in a way that prepares online retailers for success. Let’s take a look at the top three.
Online retail has to be highly visual because shoppers can’t try items on or hold them in their hands like they can in a physical store. Online shoppers are limited to images, descriptions, reviews and videos of the products in use (if they’re really lucky) on product pages. This means the product information that online retailers provide literally makes or breaks their sales - it’s time to optimize that information to make the most of the traffic retailers are already getting.
High quality images are essential to keeping shoppers’ attention and helping them visualize the well-written description retailers have provided. But each retailer must find their own sweet spot in terms of how many to display: having a slow website will only lead to cart abandonment. Hubspot found that even a one second delay in load time can lead to 11% fewer page views, a 16% decrease in customer satisfaction and a 7% dip in conversions. Quality certainly prevails over quantity when it comes to using images in ecommerce.
Some retailers take it a step further and provide informative product pages that reflect their branding. For example, Zappos has videos of people wearing their apparel and shoes to give shoppers an even better idea of how items might fit. Retailers like Zappos that take it above and beyond are able to command higher prices. It’s a win for them and the consumers who are more certain about their purchase. But what happens after they put an item into their cart can have an even bigger impact on a retailer’s bottom line.
A retailer’s online product bundle recommendations are important because they can help increase average order value. There are a few different ways to include recommendations. First, retailers can suggest complementary products based on past purchases. Second, they can recommend products that go well with items in the shopper’s cart. Finally, they can suggest more expensive versions of the item the customer already has in his or her cart.
The first two examples are ways to cross-sell and personalize the shopping experience. In real life, this might look like a shopper putting a trendy pair of pants into their cart and then a retailer proposing a shirt that goes nicely with them. Including text that explains that the item is a top seller or that the two products are often bought together are just two ways to build social proof into your suggestions and encourage shoppers to buy.
Our last example is an upsell and it can be a bit trickier to do successfully, depending on the product category. Some categories like consumer electronics thrive on upselling. Apple is a great example of a company that knows how to upsell electronics. Their iPhones can be purchased with different levels of storage space, but the price difference between each level isn’t much: getting double the storage for only $100 more seems like a deal to consumers - and it’s a deal for Apple too, because it doesn’t cost much more to produce iPhones with more storage.
Repricing in Real-Time
One big advantage that online retailers have over their brick and mortar counterparts is the ability to reprice in real-time. However, it’s an often time consuming process in which they have to determine when, why, and how to change prices. The choices they make will depend on their individual circumstances, such as supply, demand and industry norms. Many retailers choose to reprice when a competitor changes their prices or when stocks get low.
Online retailers can choose to reprice manually or automatically, depending on their SKU count. The more SKUs a retailer has, the more necessary automatic repricing becomes. After all, who has time to sit around changing prices 24/7 when there are more pressing tasks at hand?
Ecommerce can be a tricky industry to succeed in, but with the help of high quality product information, spot-on recommendations and optimized prices, there are plenty of opportunities for retailers to surpass their goals.
What merchandising tactics have worked for your online store? Tell us in the comments below.