September 3, 2002, 12:00 AM

Lose the Floor Plan

Merchandising on the web has undergone a dramatic change as retailers scrap their initial approach of replicating the offline world online.

By dint of long experience, the rules of retail merchandising are now an open book: Put the season’s best prospects at the front of the store, flag promotions and hot prices in prominent places that invite traffic, and group complementary merchandise together for cross-selling and up-selling.

Move from bricks and mortar into to the virtual store, however, and merchandising takes on new dimensions. The store’s departments, aisles and shelves become the web site’s sections, pages and links. And they’re connected not by a floor plan that guarantees shoppers will walk past end-decks and featured merchandise, but by multiple paths shoppers can jump to or from at whim.

In-store browsing becomes clickstream data, the online equivalent of tracking how a shopper considers and selects merchandise. The web’s ability to record shoppers’ every move through the site provides a potential gold mine of information on how customers like to shop-if merchants can figure out how to extract the data and shape it into effective business decisions.

“The trick with online merchandising is that it’s much more chaotic than in a physical store,” says Jonathan Heller, vice president of strategy for DoubleClick Inc. “There are so many more ways you can reach a product.”

But while they’re still learning about what makes merchandising work on the web, retailers are today already far beyond their efforts of just a few years ago. The leaders have long since dumped earlier thinking in which they attempted to translate catalog or store experience directly into the online medium, designing web sites that mimicked stores, for example, with illustrated “front doors” at the point of entry and sections depicted as “rooms.”

“There’s been a dramatic change in how effective merchandising is online,” says Petra Schindler Carter, director of consulting services for systems integrator Fry Multimedia Inc., which counts among its retail clients Eddie Bauer, Brookstone and Godiva Chocolates. “We’ve seen a lot of transition from initial experimentation with web sites as a virtual catalog or a virtual infrastructure similar to a store to something that has its own rules and mandates.”

Among those rules and mandates are a few that bear out lessons learned in offline merchandising. The higher the item is on a page, for example, the more exposure it will receive. While that’s not news to advertisers in the print medium, the web can quantify shoppers’ response as never before. As a result, retailers such as The Sharper Image are building online product presentation into an increasingly precise science; for example, tracking and comparing the click-through performance of each position in the 12 thumbnails that anchor its home page and using the data to inform online merchandising decisions.

And, as is the case with catalog covers, what constitutes the best use of prime home page real estate is an ongoing debate among merchants. Some, like Sharper Image, put the potential best-sellers front and center, while others such as Territory Ahead give the more prominent placement to beauty shots that enhance brand image. Experts say there’s no universal role and that the right course of action varies from site to site depending on the brand.

Sometimes, simple works

“For the most part, there are product shots on retailers’ home pages today,” says Bridget Fahrland, Fry’s executive creative director. “They’re successful in selling not just those products, but in showing the breadth of the site’s merchandise and in identifying key categories within it.”

Yet Fry’s site design for Crate & Barrel had just one product image on the front page, along with some mood copy. It was a departure from the look of other e-commerce sites, but right for Crate & Barrel, she says. “Their brand is very much about simplicity and boldness, and the page really carried it across,” says Fahrland. Other retailers such as Brookstone strike a balance; limiting home page product shots to just a few. That leaves room for the photos to be large enough to serve as not just product images but mood imagery as well.

Whether merchants go with a single product shot or page full of images, however, they’ve learned that online, what’s featured on the front page must be directly linked to the opportunity to buy. “Our numbers show that featured products on the home page have incredible lift, so if you’re spending a lot of effort to make the home page alluring, then capitalize on it,” Carter says.

For a long time, she adds, client Godiva used its front page primarily for branding, featuring an image such as a beauty shot of a single chocolate box. But usability testing showed that shoppers who liked that image wanted to find and buy the product. “Now, though Godiva still uses the home page for that beautiful branding, there’s always a clear way to get to that offer or item in the site or the item shown is clickable,” she says.

Successful online merchandising is about more than the product images on the home page. The web’s interactive capacities offer merchandising opportunities unique to the channel for merchants who want to take advantage of them. Near real-time feedback from the site lets merchants re-merchandise online with corresponding speed, as opposed to the longer cycles of store and catalog.

Multi-channel car and home audio and video system retailer Crutchfield Corp. tracks sales figures daily and re-merchandises on its web site weekly. “We try to put the best sellers where people will see them most,” says Alan Rimm-Kaufman, vice president of marketing. “We find things that are closing well but not getting a lot of traffic and put them where they will get more traffic. Conversely, if something we’ve placed prominently is getting a lot of impressions by virtue of being on the home page but isn’t closing well, then it shouldn’t have that space.”

Search as a merchandising tool

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