Your homepage is the window into your store. But how do merchandisers maximize the power of their online real estate to drive sales, brand experiences, and other critical outcomes?
Every customer touch point — whether that's searching for a product, completing a purchase, or enrolling in a loyalty program — is an opportunity to build a connection.
If merchandisers know what customers are looking for, they can deliver that product sooner, and more just like it. it's an art that comes understanding behavior and a science that harnesses the power of data and AI.
Algolia's approach blends the art and science of merchandising with the guiding force of AI to help you deliver a world-class ecommerce shopping journey for the benefit of your customers.
Why does digital merchandising matter?
In today's competitive retail landscape, especially at a time when shoppers are still figuring out their balance with in-store and online the process of structuring, organizing, and curating product offerings on your ecommerce website is essential to achieving specific business and marketing outcomes and staying ahead of other players in the field.
From managing promotions, curating search results, and driving inventory to users through their customer journeys, merchandisers have an important role to play in shaping both the customer experience and the conversion rates that generate ROI and bottom-line results.
With so many options to choose from, customers have high expectations and high standards. They expect to be wowed by meaningful and frictionless shopping experiences both online and in-store.
AI and data are transforming the modern business funnel. The focus on user experience is all about a seamless customer journey with human-centric design and easy-to-use interfaces created to meet the particular needs of your customers. Not only do customers want what they get in a store but more and across multiple channels with the ability to purchase whenever and wherever they desire.
New technology gives business teams and merchandisers the ability to shape these outcomes. It lets them harness the full power of APIs like Algolia's AI Search and Discovery technology making it easier to guide user behavior and drive ROI.
From hand-picked to digital data-driven merchandising
In the past, merchandisers relied on manually curating experiences. Led by intuition and brand guidelines, they replicated the analog practices in their brick-and-mortar stores.
Merchandisers working to maximize their ecommerce platforms had to rely on basic strategies. But without the right tools or data, these strategies were limited in scope and efficacy.
Older monolithic ecommerce technologies were built around open loop systems that required a high level of manual intervention. They also typically relied on limited real-time data or feedback. Consequently, they had a reputation for generating mediocre results.
As data and AI automation have become available, integrated, and an essential part of the process, merchandisers with the right tools and technology are taking an increasingly critical and prominent role in driving ecommerce strategy and solutions.
Merchandisers are seamlessly integrating the online and offline shopping experiences by driving product and placement decisions. They are using a range of powerful data-driven tools, designing meaningful shopping experiences that enhance business outcomes in real-time at every stage of the customer journey.
Helping overcome critical merchandising challenges
Merchandisers across multiple industries face many of the same problems when it comes to maximizing the
capabilities of their ecommerce retail platforms. Some of the critical issues that non-AI enabled merchandisers face include:
What is data-driven merchandising?
Data-driven merchandising uses data sources from your own business such as clicks, conversions, sales revenue, as well as market and seasonal trends to shape merchandising strategy and decisions from the ground up.
AI is applied to better understand and use that data. It facilitates the heavy lifting by automating processes, fully or partially, refining merchandising decisions, enabling real-time optimizations, driving conversions and delivering enterprise scale, speed, and personalized discovery experiences.
Taking a data-driven approach helps merchandisers harness rich and powerful user data that delivers valuable insights. In turn, these generate dynamic and personalized ecommerce experiences for end users in an omnichannel environment.
Most importantly, as the technology improves, so does our ability to generate new and innovative data-driven merchandising tools and solutions. “AI represents a critical new and powerful step in helping merchandisers work on and offline to improve business outcomes and end users’ shopping experiences.”
The evolution of AI and data-driven approaches to merchandising
Digital merchandising has evolved as the industry moves toward increasingly sophisticated ways to integrate AI with the data are three distinct readiness steps to deploying an automated data-driven merchandising strategy.
3 key readiness steps to deploy data-driven merchandising
Analytical merchandising
Key decisions are based on analytics gathered from available data and A/B tests. Limited in scope.
- Merchandising teams use analytics to identify opportunities and measure the impact of their actions. With this approach, data points like margins, recent sales, etc. start to play a role in shaping strategy
- A/B tests are often used to validate hypotheses
- Changes to the configuration are implemented manually, and on an iterative basis, therefore the scope remains limited
- This approach to digital merchandising is becoming obsolete largely due to the fact that many of the data sources are not originally built for merchandisers and do not provide optimal data in real time
Behavioral merchandising
AI is blended with human strategies. Lends itself to personalization. Automation enables scale.
- AI kicks in and enables automation at scale
- AI runs its magic while humans can intervene as needed. The balance is determined by specific business and merchandising needs
- Behavioral merchandising is where Algolia's AI capabilities like our new merchandising studio can deliver considerable value
Contextual merchandising
Real time optimization for business metrics across all feeds and touchpoints. Easier to implement cross channel strategies.
- The long-term goal is to enable businesses to personalize all customer touch points, end-to-end and across channels. This involves AI optimizing for all touchpoints of the shopper’s journey (Homepage, PLPs, PDPs, etc). Algolia's goal is to deliver those capabilities for its customers that were only available for companies such as Amazon, Google, and Facebook
Data-driven merchandising - rich data and AI make all the difference
At Algolia, we base our approach to merchandising on four pillars built around our data-driven merchandising philosophy.
We believe that our AI technology solutions empower customers to embrace and leverage an innovative approach to merchandising. It also means that they have a choice — data and AI automation can work together or separately.
With Algolia, merchandisers have the freedom to choose the sweet spot that works best for them. They can use specific data to curate merchandising solutions or blend data with available AI-enabled solutions to automate merchandising outcomes.
We believe our approach gives merchandisers an enriched perspective that not only harnesses the power of data and AI, but also helps them outperform their competitors.
- Centralized workflow
solve the problem of process fragmentation to improve workflow efficiencies
- Unified real-time insights
enable a data-driven strategy with centralized access to performance
- Automation
reduce manual tasks and harness speed, scalability, and reliability
- Control over AI
democratize AI for business teams and make it simple to apply these capabilities
Comparing merchandising strategies and goals - Yesterday vs. today
Manual and curated vs Automated
- Manual and curated
merchandising strategies take a hands-on approach. Items are selected individually and picked out from inventory to drive customer attention and sales.
- Automated
merchandising harnesses the power of AI with click and conversion events to drive and personalize query results and pages automatically.
Brand experience vs Data-driven business goals
- Brand experience
goals focus on improving the user’s interaction with the brand. The engagement is not only about a sale or conversion but an interaction that generates a positive impression and delight. Though improving the brand experience is important it is often difficult to measure.
- Data-driven business goals
like improving conversion rates (CVR) or reducing website bounce by a specific number like 20% within the next quarter are what merchandisers typically focus on to optimize their strategy. “Built around data-based goals, they are easier to benchmark and measure in quantitative terms.”
The Algolia Merchandising Studio
Algolia's Merchandising Studio can use data to shape the user journey and bring products to customers in new and scalable ways that benefit their business.
Merchandisers can now create the best experiences while preserving margins from within the Studio. Businesses can can curate, personalize, and automate product results for AI Search, AI Browse and AI Recommendations, all from one single location.
Ecommerce store owners and merchandisers can access powerful, code-free, AI-enhanced tools, create data-driven, multi-faceted merchandising strategies that improve the customer experience and accelerate business growth”
Areas of focus as we move into the future
With the Merchandising Studio, Algolia is committed to continue building features and capabilities to help merchandisers make significant progress with their day-to-day tasks and enable them to make critical and strategic decisions.
- AI Automation
Minimizing or eliminating the need to be continuously involved with repetitive, rule-based, or complex mechanical tasks that can be programmed for automation
- Analytics
Aimed at optimizing operations and delivering a more customer-centric shopping experience through informed decisions that drive sales
- Manual controls
Freedom to deploy specific capabilities activated by human expertise and judgment (your merchandising secret sauce) to maintain a competitive edge, respond to market trends, and adapt to specific customer needs and preferences
- Workflow efficiencies
Built to improve the effectiveness and productivity of the merchandising process
What customers are saying about Algolia Merchandising Studio
The Algolia Merchandising Studio has helped visualize our data in a more concise and in-depth manner. In just two clicks, it also enables us to interpret our analytics and create rules based on visualizing customer queries. This capability allows my team to adapt to customer behavior trends swiftly and strategically.
A stand-out feature for us has been the analytics section, especially the category pages, where we have been able to precisely see at a quick glance how customers shop on our product listing pages and make commercial changes based on this, to optimize our customer experience. We are excited to use The Merchandising Studio further, working with Algolia to help meet our business goals. Algolia’s Merchandising Studio gives merchandisers unparalleled control by surfacing insights and automating their promotions, ensuring the right customers see the right products at the right time. Not only does this tool help my team create superior shopping experiences, but the reimagined view of key metrics provides a meaningful look at how our campaigns are performing and alerts us of optimization opportunities.
Katherine Lee, Online Trading Executive
Fortnum & Mason
Algolia’s Merchandising Studio gives merchandisers unparalleled control by surfacing insights and automating their promotions, ensuring the right customers see the right products at the right time.
Not only does this tool help my team create superior shopping experiences, but the reimagined view of key metrics provides a meaningful look at how our campaigns are performing and alerts us of optimization opportunities.
Mike Marcoux, eCommerce Manager
Shinesty
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