4 Retail Merchandising Strategies That Drive Revenue

By Tinuiti Team

The Importance of Effective Retail Merchandising Strategies

Online retail is growing quickly, but it’s still far from catching up to the colossal sales that brick and mortar stores boast. Why? Well one of the many issues is that 60% of shoppers like to see items in person before they buy them. Getting a great deal on a website can be exciting, but when a customer receives the product and it’s different than they were expecting, they might feel a little let down.

Beyond that, price competitiveness is fierce because there’s an expectation that online retailers will be able to provide low prices — especially with Amazon lurking in the back of shoppers’ minds as the consistent loss-leader.


This article will address the top 4 retail merchandising strategies that online retailers can use to drive revenue and stand out in the hyper-competitive market. These tips can also keep shoppers from turning into cart abandoners.

1. Site Layout: Online retail by definition restricts some of shoppers’ senses, because they can’t touch the products or try them on, but this doesn’t have to be a bad thing. Site layout plays a huge role in driving conversions. Just like in a store, your site must be designed in a logical way to help shoppers find what they’re looking for and add it to their carts easily.

The products that you highlight on your homepage have an impact on what shoppers end up buying. Consider promoting higher margin and best selling products to steer shoppers toward items that will make you the most money with the added bonus of social proof.

2. Multiple High-Definition Images: Online retail is highly visual. What shoppers see is what they get, so having high quality pictures available for each item in your inventory is a must. eBay listings that have two images sell 7% more often than listings with just one and it doesn’t stop there. Each additional image increases the likelihood of selling that item by 3%. Regardless of the marketplace on which you sell, images play a big role in conversions, as 83% of human information is obtained from the sense of sight.

retail-merchandising-strategies-cross-sell-upsell3. Competitive Assortment Analysis: What products you carry is important, but what your competitors carry is actually more important. Why? Well, especially in online retail, shoppers are comparing your offerings and pricing to your competitors’. They want to get everything in one place for the best price, whenever possible. So it’s your job to provide this. Approximately 63% of retail leaders use analytics to make merchandising decisions, and here’s how you can become a part of that majority.

The key is performing a gap analysis. Mine inventory data for your competitors and compare it to your own. Then there are three things you need to pay attention to. One is where you overlap. That’s where you’ll need to price most competitively to keep shoppers from clicking over to a cheaper site.

Second, the products that you’re missing should be taken into consideration for new stock. Roughly 77% of shoppers will go to another site if they can’t find a product they’re looking for on a specific site. Third, the products that are unique to your business are where you can have the most fun. Since they can’t be found anywhere else, you have complete control over the pricing. You can raise the price until demand begins to drop slightly to learn the maximum price. This will remain true until a competitor enters the market.

4. Smart Recommendations: When shopping online, there isn’t always a helpful associate that will point out products you might like based on your preferences and previous purchases. Luckily, this is possible with the help of technology. Cross-sells and upsells are essential to boosting average order value, and what you present can have a big impact on how high you can get it. Presenting shoppers with products that compliment the item they’ve added to cart can be a helpful way to cross-sell.

retail-merchandising-strategies-dynamic-pricingOne area in which eCommerce has an advantage over brick and mortar is pricing because it can’t be static in such a dynamic market. In a physical store, employees would have to manually change price tags on all the items that needed an update. However, the process is much more simple online with the help of dynamic pricing software. Competitors are constantly changing prices (and this is especially true on Amazon with price changes occurring on numerous items every 10-15 minutes) and software providers make it possible to keep up in real-time.

Having the right products, a user-friendly site, great images, and spot-on recommendations are all nice, but without a market-determined price, this is all for nothing. Pricing is the final piece to the eCommerce merchandising puzzle because it seals the deal on the purchase.

What retail merchandising strategies have proven successful for your business?

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