In this article, learn how ecommerce merchandising impacts the quality of your customer experiences, plus the top tactics to turn Category pages into major conversion and revenue opportunities.
A 2019 analysis of Nosto-powered brands revealed that up to 70% of online sales originate from category pages, and yet less than 50% of category page traffic progresses to a product page. The reason for this is simple: most category pages don’t leverage the most effective ecommerce merchandising strategies. Many still rely on simplistic sorting methods, don’t cater to different audiences and are less-than-ideal candidates for onsite testing.
Let’s explore the key challenges (and some solutions) to optimizing Category pages by illustrating five key benefits of using Nosto’s Category Merchandising. The goal: to create winning category page experience using robust ecommerce strategies that make a difference.
Category Pages and the Challenges They Pose
Category pages are, unarguably, one of the most important page types in an online retailer’s arsenal today. These pages serve as sources of traffic, assist with product discovery and grant retailers the possibility to steer consumer focus from one product to another based on business goals.
So what’s the deal: Why can’t we just sort the products based on some default method and trust shoppers to find what they are looking for?
Pseudo solution 1: Limited sorting capabilities
Most ecommerce platforms worth their salt offer retailers some selection of online merchandising options to rearrange the products based on their attributes – which is where the problem with these solutions also lies.
Product attributes are very explicit, but don’t really tell you anything about which items should be shown first. Do you want to show the cheapest items first? How about alphabetical order? Neither of these attribute based use-cases make any sense from a consumer perspective since they are not actionable and don’t help shoppers find what they’re looking for.
Pseudo solution 2: DIY (but spend a lot of time and money in the process)
An alternative solution would be to follow one age-old saying: If you want something done right, you do it yourself.
While the saying holds true in this case, DIY merchandising comes with a hefty price tag.
Sorting category pages manually requires a dedicated merchandiser (or even multiple merchandisers) depending on the width and depth of the product catalog and how often the product offering changes based on seasonality or trends. Usually, trained professionals who adjust category pages manually generate a fair end-result. However, it’s a significant labor cost that could be better allocated towards other merchandising improvements such as supply-chain management.
The significant drawback usually shared between these two merchandising techniques is the lack of audience targeting or an easy way to test hypotheses on category pages. Ecommerce platforms traditionally create one category page that is shown to every user with the desired sorting. This completely forfeits any sort of lifecycle management or relevance optimization for customers interested in certain item-ranges.
Category Merchandising counters the challenges we mentioned above by seamlessly blending product attributes, performance metrics, segmentation and A/B testing. It also allows merchandisers to reduce their workload while still retaining the possibility of manually influencing the category pages through our innovative visual editor.
Sorting by Product Attributes and Performance Metrics
With Category Merchandising, product attributes and performance metrics can be used interchangeably to achieve both simple and complex use cases.
Any product attribute can be used as a stand-alone. So if you want to sort by price, brand, inventory level or unique meta fields such as sustainability score, it’s all possible.
However, by leveraging performance metrics, you can supercharge the sorting by focusing on the commercial metrics that make most sense, such as sorting by conversion rate, accounting for number of views, determining if revenue per impression is a better measuring point, etc.
Any product attribute that is mapped to Nosto is usable out of the box, and performance metrics are calculated behind the scenes based on a combination of behavioral science and raw transactional data. Both attributes and performance metrics can be used together, so there is really no limit to creativity when coming up with sorting. Promoting high-converting Nike items with less than 5 units in stock? We’ve got you covered.
Case study: Skinnydip London’s automated ecommerce merchandising strategy yields an 8x ROI
Skinnydip London wanted to test the impact of showcasing popular products within their Beauty, Clothing and Phone Case and Accessories Category pages – specifically, those that generate a good return in the form of revenue per view.
In this test, new, non-discounted products were prioritized on the respective Category page to maximize AOV and revenue while discounted items were demoted. They tested this variation against their default page setup, where new and best-selling products are manually mixed together and “new” products are based on Skinnydip’s assumption of which products would perform well:
The results? A substantial increase in conversion rate and click-through rate across Skinnydip’s non-sale categories. Check out the brand’s success story for details on their growth per category.
Highlighting Seasonal or Campaign-Specific Products
If you’re responsible for your visual merchandising, you’re probably freaking out a bit about the visual aspect of the page and having a little more control over the products you want to display at the top of the page.
With Highlights, you can replicate the end-of-aisle experience of retail stores by promoting a specific new collection, drop, or range for a set amount of time at the top of the relevant category pages.
By highlighting the right products that you know shoppers will interact with, you’ll be that much closer to converting them into happy, long-term customers. In fact, 70% of consumers believe a brand’s understanding of their personal needs influences their loyalty.
|Curious to see how other brands are creating kickass Category pages? Explore our roundup of the best ecommerce Category pages that attract, convert and retain more shoppers.|
Built-in Segmentation in Real-time
With Segmentation & Insights, different audience groups can be created and used in tandem between Category Merchandising, other Nosto products such as Product Recommendations, and even by syncing them to 3rd party integrations such as email service providers or Facebook.
Segmentation opens up a lot of interesting use-cases: from influencing life cycle stages (e.g. showing more offers for new users and new items in stock for returning customers) or improving relevance based on previous engagement or transactional history (e.g showing more Nike products to those interested in the Nike brand).
When it comes to segmenting new visitors, we might want to favor products that have a good revenue yield for every product impression using performance metrics. These products should statistically work well for unconverted prospects that don’t know what they are looking for yet. However, when segmenting loyal customers who are interested in Nike, we might want to use product attributes to favor recently added Nike products or, by using performance metrics, the ones that generate the most margin per product view. This essentially mirrors creating dedicated landing pages that cater to a particular audiences’ needs and wants, and can even be synced further with 3rd party marketing tools like ESPs and Facebook to align with outbound marketing efforts.
The possible combinations of product attributes and performance metrics together with segments are endless and scale for most business goals within digital retail.
Personalizing the Customer Experience on Category Pages
Any great ecommerce strategy requires both merchandising and personalization. Now you might be asking yourself: “What is personalization vs. merchandising in ecommerce?”
Merchandising is the practice of showcasing what the store wants to sell; whereas personalization is the practice of showcasing what the shopper wants to buy.
On top of the sorting layers based on product attributes and performance metrics, with Nosto’s merchandising solution you have the ability to automatically personalize category pages based off of the shopper’s behavioral data and segmentation.
The possibilities are limitless when you combine personalization with merchandising tactics like product attributes or performance metrics. One particularly powerful use-case is to highlight complementary products that match items the customer has already placed in her cart.
Another useful example: after purchasing hiking gear, a shopper visits the backpack category page, which consists of both outdoor and school backpacks. With Category Merchandising, Nosto’s Artificial Intelligence engine would promote the outdoor backpacks and demote the school backpacks, while also showcasing the backpacks with the highest profit margins. It enhances both the customer experience and the online retailer’s KPIs.
|Want more personalizatoin inspo? Check out the 3 strategies you absolutely need in your game plan to master site-wide personalized content.|
Visual Online Merchandising
As we mentioned earlier, deploying seasoned professionals to manually set up your merchandising usually generates fair results —but with a hefty price tag for the manual work required.
Adding more interactivity and blending manual work with the power of automation has been a cornerstone of product development at Nosto and deeply ingrained in the DNA of the company. With this product, however, we needed to take it a step further by adding a fully interactive Visual Editor that allows online merchandisers to reduce manual work, focus on the essentials and let the power of artificial intelligence fill in the gaps.
For example, this feature would allow an apparel merchandiser to promote a category page for sneakers by prioritizing higher-converting items, then start mixing and matching the position of items they think might work better or worse based on their professional know-how. Subsequently, they can deploy an A/B test to validate the performance of different tactics. This allows for more informed business decisions and defines how much focus should be devoted towards commercial optimization or delivering a branded customer experience.
Native A/B Testing and Continuous Optimization
Online merchandising strategies can have many facets and a variety of goals. One retailer might be content with improving overall revenues, while others believe improving margins to be their absolute north star for success. Influencing commercial metrics through online merchandising, however, can be difficult because moving an item from the top row to the second row might have a very small difference to the overall revenue (if any).
One of the main challenges with using A/B testing tools on Category pages is that the site content is much larger than a banner, text or product recommendation. This usually leads to issues with load times and performance in general, manifesting itself as flickering content or content that takes longer to become visible onsite.
Category Merchandising is built from a server perspective – meaning the content does not change after a page has loaded, but rather when the page is actually loading. The exact methodology varies from platform to platform, but the end result is a reduced impact on site performance compared to more traditional solutions (hence, no visible flickering or noticeable delay in content delivery when conducting an A/B test).
Native A/B testing finally gives retailers the means to come up with better-informed hypotheses (for example, testing the revenue impact of favoring well converting items vs. promoting new arrivals) and deploy a live test in minutes without jumping between different tools and thinking about the technical restrictions.
|Continue reading: Check out more advanced merchandising ecommerce strategies that influence your store’s conversion rate.|
Improving Ecommerce Merchandising on Category Pages: Key Takeaways
Category Merchandising enables online retailers and merchandisers to:
- Utilize powerful ecommerce merchandising tools to reduce manual workload by using product attributes and performance metrics to apply different combinations of sorting on category pages.
- Increase relevance by leverage real-time segmentation to cater to different audiences with different kinds of sorting methods to influence the customer lifecycle.
- Deploy in-house expertise and know-how and make adjustments using the intuitive Visual Editor with interactive controls to ensure a branded shopping experience.
- Validate hypotheses and deploy A/B-tests without time-consuming configurations, or needing to employ costly experts to interpret the results.
Interested in Getting Started?
Category Merchandising is available for select platforms and also available for manual implementation over a proprietary GraphQL API. Get started by reaching out to your Customer Success Manager or by contacting us at firstname.lastname@example.org.