May 28, 2003, 12:00 AM

Tried and true merchandising works as well online as it does offline

(Page 2 of 2)

It is interesting to note that traditional merchandising tactics score home runs in this newest channel. As retailing will always be about hot product, positioning of top sellers remains strong online. Merchants are fortunate that in this non-linear environment they have an opportunity to creatively display such lists of products on the home page, by category and even at the product page level. When customers are unsure of what to purchase, these top seller listings can be the differential between exiting the site or buying a product. Determine prime locations to position best sellers. Test alternative locations from the home page and category page to the shopping cart to position for peak performance.

7. What’s New
4Q Penetration: 62%

Another traditional feature on our top 10 scorecard is the hard-hitting new product classification. I am always surprised that more merchants do not highlight their new items even more blatantly onsite. Certainly timely blasts of e-mail have been effective in showcasing new product. It would be our recommendation that merchants also use more graphically pleasing icons to remind customers of additions to their sites. Additionally, just as traditional retailers do at point of purchase or via their rotating main floor boutiques, maintaining special locations on the site will drive impulse shoppers to visit and buy more frequently. At a minimum, include a what’s new icon or text header, as key item selling has always been the bread and butter of retailing.

8. Affiliate Programs
4Q Penetration: 55%

Affiliate programs have become a mainstay of many merchants’ marketing arsenals, given its cost-effective nature. Continuing to be critical to the success of affiliate marketing are issues such as managing the programs; making sure partners are well selected and promotions well engineered; and constantly evaluating results to understand if the program is meeting its goals. Merchant feedback indicates that affiliate marketing is ideal as an acquisition vehicle but its role as a retention vehicle needs further assessment. Regardless of the stage of your affiliate marketing efforts, assess your promotional programs and corresponding revenue share. Understand what you need to secure the top partners you seek. Make it a priority to nurture those relationships rather than putting programs on autopilot.

9. Frequent Buyer Programs

4Q Penetration: 26%

This cross-channel retention tool delivers. As the web channel evolves and merchants move into retention vs. acquisition mode, these programs should garner greater favor. The optimal scenario is to enable customer utilization across all channels, thereby truly putting the convenience and choice into the hands of the consumer. Now’s the time test a loyalty program and cross promote it to ensure its success.

10. Personalization
4Q Penetration-(not measured
due to its varying nature)

As an early promise of the Internet, personalization is a tool we attempt to measure across the web. In its earliest application, a site addresses a returning customer by name, often followed up with personalized e-mails. A secondary and more sophisticated aspect involves dynamic merchandising based on product purchases or clickstream analysis. We are in the infancy of personalization, but we believe its potential is unlimited, with the caveat that the fundamental rules of merchandising must be followed. Work your upsells and cross-sells wisely to increase average order while simultaneously maintaining the respect of the customer.

Whichever online tactics a retailer chooses, there are still certain techniques that merchants must follow for mastering merchandising:

Execute the basics well.

Evaluate both onsite and e-mail programs for opportunities to make enhancements.

Don’t ignore conventional techniques as those are often reinforcing learned shopping behavior.

Test new tools and techniques frequently to remain best of breed.

Watch competitors and best-of-breed players as there is little that is completely new in merchandising and that cannot be emulated for a retailer’s unique brand and shopper needs.

Lauren Freedman is president of the Chicago-based e-tailing group Inc. and author of the new book It’s Just Shopping. She can be reached at lf@e-tailing.com.

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