3 Advanced eCommerce Merchandising and Product Sorting Strategies to Boost Holiday Profits

The peak shopping season is here! Is your merchandising team ready? 

Over the 2020 holidays, US online shopping grew by just over 32%, with revenue in November alone reaching $100 billion. However, with increasing revenue potential comes growing competition. 


When you add the expedited growth of online retailers resulting from pandemic market shifts, it is no longer enough for eCommerce retailers to ensure potential shoppers are seeing the right products at the right time. They also need to align these products with peak shopping season market changes and brand goals in order to increase sales. 

In short: Your brand needs smart product collections based on advanced merchandising strategies. 

These advanced merchandising strategies should be centered around reaching your overall business goals while simultaneously boosting conversions through real-time optimization. This optimization should be based on critical inventory and profit metrics. 

And when done strategically, it can increase profits by up to 30%

There is still time to upgrade your product collection strategy to ensure 2021 holiday sales success. 

In this post, we give you three must-dos eCommerce retailers and merchandising teams should follow to ensure they are set up for success. These include: 

How eCommerce Managers can Upgrade Product Collections and Product Sorting  


  1. Lay the groundwork for conversions success by identifying product, retail, and sales KPI goals 
  2. Develop and fine-tune a multi-dimensional product sorting strategy 
  3. Automate your eCommerce merchandising and smart collection optimization 


Let’s dive in. 

1. Lay the Groundwork for Conversions Success by Identifying Product, Retail and Sales KPI Goals 

The first thing you need to do when planning a smart merchandising strategy is to define your brand’s most critical goals for peak shopping season.


Do you need to move specific inventory based on true margins? Do you have deadstock you need to clear, without sacrificing on profit, to free up storage for new inventory? Do you have a revenue target you need to hit by the end of the fourth quarter? 


Let’s say your store is heading into peak season with a 30% deadstock average. Not only is this costing you in potential profit revenue, but you’re also losing overall profit in storage and admin fees such as warehousing, handling costs, and insurance, to name a few. At the same time, you have set revenue targets for the holiday season. 

Your two primary goals for the holiday season would then be to: 

  • Move and clear deadstock to mitigate costs and free up storage for new products 
  • Boost your brand’s revenue through popular products and bestsellers 


You would need to create an eCommerce merchandising strategy that can meet both goals, which brings us to the following advanced merchandising hack for online retailers. 


Bonus Tip: There are three ways eCommerce managers can use peak season sales to minimize deadstock profit loss: 

  1. Product recommendations to existing customers and returning traffic 
  2. Strategic promotions designed to clear stock with minimum margin lost 
  3. Product sorting and smart merchandising collections 


Additionally, you need to ensure you can adapt these strategies and promotions in real-time to accommodate brand and market changes. The most efficient way to do this is with an holistic, AI-powered eCommerce merchandising solution like Kimonix


2. Develop and Fine-Tune a Multi-Dimensional Product Sorting Strategy 

We know that as much as 75% of on-site product clicks come from the first results page of a collection or category. That means you need to ensure the products displayed have both the best chance to convert and will ensure you meet your revenue targets. 


Using just one product sorting parameter, such as sales quantity or  personalization, isn’t enough to compete with other retailers in your niche for sales.


Instead, you need to create collections with smart sorting strategies that combine a variety of smart merchandising parameters that match your crucial peak season objectives. 


A smart merchandising strategy should include a variety of parameters from the following list: 

Smart Collection Parameters for Peak Season 

  1. Personalization based on real-time shopping behavior 
  2. Margins and/or real margins (with discounts) 
  3. Conversion rates 
  4. Days to finish inventory (based on product daily sales rate)
  5. Inventory value 
  6. Sales by quantity and/or revenue 
  7. Variants stock ratio
  8. Number of days in stock 
  9. Product reviews 
  10. Product page views 
  11. Bestsellers   


Pro Tip: Let’s talk bestsellers. A common eCommerce merchandising glitch is often the classification of bestsellers. Most online smart collection tools base bestseller lists exclusively on the volume of the sales, but this is not enough. Instead, you need to consider and compare the following for each product before creating your bestsellers category: 

  • Number of units sold 
  • Conversion rates 
  • Marketing budget 
  • Margins


You can find out more here.


In other words, you should ensure your collections, categories, and in-store merchandising displays include products based on key parameters that match your peak season sales goals.


To give you an idea of just how powerful switching to a multi-dimensional product sorting strategy can be, let’s look briefly at Swarovski IL. Their online merchandising team, using Kimonix, saw the following lifts after implementing smart collections over one-parameter sorting: 

  • 8% increase in overall profit 
  • 18% conversion rate boost 
  • 29% reduction in deadstock 
  • 72% increase in daily sales rate of top products by inventory volume 


Ideally, you don’t just want to vary your collections and ranking strategies, but also vary where these collections are displayed. Your merchandising team will also need to react in real-time to quick market and inventory changes that happen during the peak shopping days. 


However, without automation, that’s virtually impossible… which brings us to the final must-do eCommerce merchandising and smart collection hack. 

3. Automate Your eCommerce Merchandising and Smart Collection Optimization 

eCommerce retailers not only need to create collections using advanced sorting strategies as highlighted above, but merchandising teams have to be able to react in real-time to quick-shifting market, inventory, and goal changes. 


Without constant tweaking and optimization, even the most well thought-out merchandising and product sorting strategies will fall short. It’s virtually impossible to maintain this during peak shopping seasons without automation. Just ask Amazon!  


Instead, you need: 

  1. Smart automated, multi-segment collections based on critical parameters 
  2. AI-based advanced product sorting personalized to brand, market, key KPIs and in-the-moment shopper engagement and behavior 
  3. Advanced product groupings 


In short: automation will save you and your teams a lot of time that would otherwise be spent on manual merchandising and analytics, while ensuring your merchandising is optimized for maximum profits.

Final Thoughts: Improve Holiday Profits with Advanced eCommerce Merchandising 

With the growing number of sales and the sheer volume of new eCommerce retail competition, market changes will be shifting this season. It is therefore vital that you automate your merchandising and product sorting strategies to cope with these changes in real-time. You will also need to ensure you have built holiday merchandising strategies around both: 

  1. Marketing KPIs (such as conversion rates and revenue targets) 
  2. Retail KPIs (such as non-moving inventory and gross margin projections)


If you don’t,  you risk being left behind. 


The bottom line: Even the most experienced eCommerce managers continually struggle to improve their stores’ ROI. They often focus exclusively on marketing KPIs while neglecting important retail KPIs. 


This can result in an average profit loss of 20% – which makes it difficult to reach peak season revenue goals.  

Why?

Historically, they lack the ability to simultaneously optimize their marketing KPIs (such as conversion rates and revenue goals) and retail KPIs. However, without being able to do this in real-time, they cannot capitalize on the full profit potential of the peak shopping season.


This can either be done manually or with new Merchandising AI technologies. But regardless of what method you and your team land on, one thing is certain: without advanced merchandising your unoptimized sorting and collection strategies could cost you holiday sales and profit. 

Say Hello to the First Holistic, AI-Powered eCommerce Merchandising Solution for Shopify Stores 


Meet Kimonix, the first and only AI-powered advanced merchandising solution designed to optimize merchandising and boost revenue all year round. 

Our advanced one-of-a-kind AMS (AI merchandising strategy engine) allows eCommerce retailers to build, automate, and optimize smart collections based on current business goals, inventory constraints, and shopper demand.


Kimonix will: 

  • Synchronize sales data, inventory analytics, and insights on your customer preferences to create smart collections that boost sales, optimize inventory, and maximize margins.
  • Enable eCommerce retailers to create dynamic product collection and sorting strategies according to key business parameters 
  • Monitor inventory, sales, and customer engagement stats for each product to gain a deeper understanding of which products are performing well and which aren’t 
  • Leverage critical real-time product insights and alerts to enable marketing and merchandising teams to continuously optimize product performance



Ready to combine real-time sales and inventory data with insights on your shoppers’ preferences and build tailored customer journeys that maximize profitability?

Request a demo