A recent study by Coresight Research showed that 40% of U.S. non-grocery sales are at a discount, representing roughly $395 billion in lost revenue, 12% of sales.
Retailers get to avoid markdowns and sell out of the season at full margin. However, we can’t predict how much inventory they acquire. Merchants usually complain about over-buying (resulting in markdowns) and under-buying (resulting in out-of-stocks).
There are two significant factors causing vitality.
-Changes in customer behavior, coupled with external factors like weather, competitors, and social effects.
-More customer choices, coupled with new channels and alternatives, like direct-to-consumer startups.
Balancing demand with supply is difficult. The conventional aspect of the inventory being a back-office department doesn’t exist anymore. Merchandising is inherently linked to inventory. Most leading brands and retailers currently closely coordinate these two.
In this post, I’ll address four coolest of the cool merchandising hacks that will not only help you effectively manage your inventory levels but also help you boost profit rates.
1. Show variants in pictures
The exposure a product receives directly impacts its sales, hence, more exposure, more sales. Direct marketers learned this years ago. Unusual art choices would have a significant impact on the sale of that product variant. As an example, if you display a black colored dress, then it will sell faster than all other colors. Showing multiple variants in pictures will reduce this drawback.
Online merchants don’t rely on one single image. Instead, we can change the featured image quickly within a given time using artificial intelligence.
It’s common for merchants to manage the highest row of a category grid and to feature product for additional exposure manually. This usually causes those products to sell out of standard sizes-small, medium, giant leaving only, say extra-small or extra-large. So the merchandise isn’t technically out of stock and continues to be prominently displayed.
2. Automate category management
Category management depends on performance tiers and measures every category’s revenue and profit contribution. It provides a structure balance exposure with offered inventory, to get profit. Category management for eMerchandising will automatically increase or scale back exposure, and thereby scale back markdowns — for categories and individual product.
3. Emphasize on bestsellers
Retail sales usually display a few product categories. Often the product in these categories represents just 5 to 10 percent of the entire product range. These categories systematically generate high volume and smart margins.
Cash-machine categories pay the bills. However, the best margins usually return from the products’ long-tail. These best-sellers are high margin, high-inventory things that aren’t obtaining a lot of visibility — ready for additional exposure. Exposing the product will drive significant progressive profit and scale back the danger of marking them down.
4. Leverage out-of-stocks
Out-of-stock inventory frustrates shoppers, mainly if the products are still promoted. A sensible eCommerce store owner will take off all the out of stock products from the promotion as it portrays a bad image about the business— the merchandise and the inventory not being in sync.
Nevertheless, out-of-stocks happen. You can scale back the impact on shoppers by providing the flexibility to back-order the item, or with a button to “notify once available.”
Most retailers commit blunders by hiding out of stock products. They lose business by not giving proper directions to the shoppers to reorder.
Bottom Line
These four hacks are just a starting point and are recommended by GoodFirms. As an eStore owner, you need to do everything it takes to earn profits, especially when the competition is so cutthroat. Digital Merchandising is evolving from a standalone perform to being perfectly synced with inventory, and from a manual, rules-based method to being optimized by AI. Lessons learned today will help to shape the future of eCommerce industry tomorrow.
