Intersection of visual merchandising, planograms and digital retail

by | Jun 8, 2017

Now that retailers are embracing and internalizing omnichannel strategies, one thing to think about is how important visual merchandising is for maximizing sales regardless of the channel – whether it’s a planogram for a physical place, the design of the digital space and even appearance in mobile apps or social. Just as visual merchandising can be used to maximize the potential for products to be purchased in a brick and mortar store, thinking about how the items are displayed in the virtual space can also potentially increase the value of each shopping cart.

Traditional visual merchandising

Pretty much every retailer is familiar with the idea of how planograms are used inside the store. These diagrams or models indicate the placement of retail products on shelves in order to maximize sales. That can be across the store – such as housewares in one section, shoes in another section, electronics in yet a different section. They can also be much smaller, down to just the size of an endcap meant to promote product specials or a holiday event.

But whatever the purpose of the planogram, the idea is to get customers thinking about what other items they may want in addition to that one product they were specifically seeking.

For example, I saw a holiday endcap last year that had everything you would need to bake cookies. There were premixed boxes of cookie mix, cookie sheets, spatulas, oven mitts, cookie cutters, frosting tubes and holiday-themed storage containers. The display signage even looked like a gingerbread house with candy cane poles.

If you weren’t paying attention, you might have missed that this entire endcap was actually meant to promote a certain type of chocolate candy with a crunchy outer shell that melts in your mouth, not in your hand. Yet, all these other items displayed with those candies in one convenient place was meant to get people to not only buy the candies, but to make an experience out of using those candies to bake tasty treats. And, of course, turn a quest for a single product hopefully into a boatload of holiday cookie crafting nostalgia – and a cartful of impulse buys.

That was a genius display. Any other time of the year, these items would have been scattered throughout the store in their usual sections. This endcap planogram put all sorts of items together for people to purchase, and it also tugged on the heartstrings enough to very likely loosen some purse strings.

“Visual merchandising” for digital

The purpose of visual merchandising strategies such as a planogram is to attract, engage, and motivate the customer towards making a purchase. This is often part of the shopping experience that is missing in the online store. Very often, e-commerce sites and other channels simply lump “like products” together, like men’s shirts with men’s shirts and dresses with dresses. We can see other attempts at online merchandising when products are lumped together online with Amazon’s “Other people also bought” and “You may also like” function. That might only work some of the time because consumers’ shopping baskets, habits and tastes are so varied.

Transferring the “planogram” concept to the digital space can be more than just “Other people also bought” reminders after a shopper has placed an item in the shopping cart. You can display related items on a product’s page, so they’re immediately visible, and not just an afterthought, much like reminding a retail customer not to forget the baking spray for the cookies while they’re standing in the checkout line.

We can take the idea one step further to more closely replicate some of the “impulse buy” benefits of shopping in a brick and mortar store. The idea of visual merchandising for the digital space is basically creating personalized shopping experiences with item suggestions to go along with every product. Taking such an approach with your e-commerce store or apps can boost sales considerably.

But is the best approach simply to show what other people bought along with the product in question? Is showing other similar products sometimes the wrong choice?

What about a different approach?

Sometimes finding the right accessory to go along with the item is the deciding factor for whether or not the item is purchased. When an online shopper is contemplating buying a dress, instead of showing other similar dresses, perhaps they should be shown shoes, purses and other accessories that compliment the dress to inspire the sale. Or when a button up shirt is being considered, maybe displaying coordinating ties and pants would impact whether or not the items are added to the cart. This is the type of experience the customer might have carrying the dress or shirt around to different departments within a brick and mortar store. I think it’s an improvement on the idea of what “Other Customers Bought” because it might be relevant, it might not.

These “planograms” for the digital space can be helpful in areas where displays and employees might have been of assistance in the store. If customers are looking at a pair of hiking boots, they should be shown the best kinds of socks to go with them, a backpack made for hikers, carabiner clips or other hiking accessories – this is the type of expert guidance they might get from a sales floor associate if they had walked in the store.

Putting these items directly on the product page will give customers time to review the information before adding them to their shopping cart. Make it extremely easy for customers to add these items to their cart, without having to click on the product page to do so. Including an “Add to Cart” button will make it much easier (and much more likely) for them to give in to those impulse buys.

How to put the items together

Of course, you can look at the data to see what types of items were purchased together. Is there a pattern that makes sense? If there is, it could be worth considering coding product pages to include specific items that other people bought together, with the hopes that it will increase the chance multiple items will be added to the shopping cart instead of just one. You may also consider an algorithm to do this so no manual entry is needed, but this can sometimes bring about strange results.

If there isn’t a pattern that makes sense, the product could use a more individualized approach to determine what items might be included together to maximize sales. One way would be to curate collections of items that go well together, such as the dress, shoes and purse example from earlier. This would take some knowledge of the products that are available and putting them together manually, but it could also be extremely beneficial to the quantity and value of digital shopping carts.

It’s barely spring, but retailers are already thinking of the holiday season, and determining which products they want to have in stock by November. They’re also figuring out how to best display and promote those items for maximum sales to customers. While you’re at it, be sure to give some attention to your digital planograms, and how you can increase online sales by linking items and having them show up early during a shopper’s online experience.

To learn more about sourcing products for retailers or brand sourcing, as well as creating “digital planograms,” please visit the SPS Commerce website for more information, or contact an SPS representative to discuss our different cloud-based solutions.

Brandon Pierre

Brandon Pierre

Senior Director for Customer Success - Community & Analytics at SPS Commerce
As a customer success executive at SPS, Brandon Pierre works alongside many retailers and suppliers to develop strategies to address their merchandising and supply chain business objectives. With more than 14 years in the buying organization at major retailers, he has experienced first-hand the opportunities of the digital era and how technology can transform the consumer experience through improved retailer and supplier connections.
Brandon Pierre

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