The eCommerce Opportunity
It’s no secret that eCommerce sales continue to grow: TechCrunch predicts eCommerce sales will top $1 trillion by 2022. With retail competition at an all-time high and rising consumer demand, retailers must evolve and adapt if they hope to tap into this incredible potential for growth. One powerful solution is unlocking an endless aisle of virtual goods.
The endless aisle is a business strategy that allows retailers to offer a wider variety of products in new verticals to capture a greater audience. Expanded assortment and endless aisle have been key trends and buzzwords for years, yet many companies still struggle with how to adopt them and just how many new products to add. To do it successfully, you need a strong, comprehensive merchandising strategy.
The Elements Of A Strong Merchandising Strategy
The role of merchandising is to guide customers through a customized, multi-channel journey – that ultimately leads to higher customer retention and AOV (average order value). If you’re ready to expand your product assortment, start by developing your merchandising strategy.
The following is a helpful blueprint:
- Current state + goal assessment. Perform a state-of-the-state of current merchandising initiatives, identify priorities, and set growth goals.
- Identify and build on new opportunities. Start by identifying your top-selling products. From there, identify related items to coax a higher cart value. For example, a retailer specializing in consumer electronics can augment their offerings with laptop bags, screen protectors, and phone cases.
- Manage and optimize. Use real-time data and customized reporting options to see which products are performing and which ones aren’t and tweak your assortment accordingly.
Don’t forget that mobile commerce has become an important component of endless aisle strategy, too. Implementing interactive in-store kiosks brings your extended virtual inventory to brick-and-mortar locations, for an even more seamless shopping experience. With customer-facing, interactive touchscreens displaying the entire product catalog, shoppers are empowered to browse, discover, and purchase all on their own.
Choosing a fulfillment method
There are three fulfillment options for your expanded assortment: Purchase and warehouse new SKUs, drop ship, or implement a marketplace model. Each model has pros and cons, but drop ship and marketplace come with less risk and upfront cost than warehousing. They also allow you to add and subtract products more quickly, giving you greater flexibility to adjust your assortment in response to seasonal trends, consumer demands and sales performance.
By electing to offer virtual goods through drop ship and marketplaces, you can truly enable an infinite aisle. This blog on the pros and cons of marketplace and drop ship can help you decide which solution(s) are right for your goals.
Connecting with the right partners for your merchandising goals
It’s clear that an expanded assortment can be a competitive advantage. However, expanding into every product category and offering millions of SKUs does not necessarily translate to a better user experience. In fact, having too many products to choose from can be overwhelming to customers and having too broad a range of offerings can dilute your brand. To set up for sustainable growth, retailers must expand into relevant verticals and add curated product SKUs.
The key to successful curation is, first, to identify high-growth product categories. Equally important is choosing products that will bolster, not weaken, your brand image and quality reputation. Then, on an ongoing basis, you can use data to pinpoint your top-performing sellers/suppliers and best-selling items and adjust your assortment accordingly. Be sure to monitor supplier/seller performance and work with trusted brands.
Logicbroker can help. Through our merchandising consultants, we pair you with expert digital merchandisers to help you identify opportunities for smart expansion and strengthen your merchandising strategy.
- We’ll help you evaluate your current state, assess your goals, identify opportunities, and perform industry and competitive analyses.
- See how to manage and optimize your program through established KPIs and regular QBRs
- Keep strengthening your program and building connections with vendor summits, events, new initiatives, and tips for success.