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Retail evolution: From stores to searchandizing

BY CSA STAFF

By Kuruvilla Mathew, [email protected]

As search engines get sophisticated and online merchandisers get creative in presenting product information, an intersection forms that can really benefit customers. When you search products, you get results with price ranges, product highlights, and retailer availability. Search engines have become semantically aware and more contextual which has made them seem more intelligent. The change is subtle in Google results, but you will see it in a more pronounced way in Microsoft Bing, Yahoo! and MSN search.

Retailers are beginning to maximize the use of search to expand their reach to consumers on their merchandise directly through search engines. Stores are using techniques that worked on shelves to ensure that the consumer’s search results have product placement. This is typical cross selling. Retailers use planograms to position merchandise in isles. When you walk through a checkout stand you will see an interesting array of products. Similar techniques are also being used by online merchandisers by placing alternate options of products or services.

It is unrealistic for retailers to assume that consumers will go to their site to search for the product. Consumers are bargain hunters. There is little to no brand loyalty when consumers are looking for products or services online.

In tough economies, using or finding promotional offers is important. Users are scouring the online channels to find products using their popular search engine. Search engines help consumers cast a huge net to trap good bargains or alternates. Retailers and wholesalers have taken a number of steps to protect consumers. A great example is Microsoft Bing that is contextually aware and seems more intelligent.

So what are some good “searchandizing” techniques?

Keep your keywords simple. Spend time in defining the nomenclature. Do not use words that the common person or your target demographic cannot understand. If you have the time, make sure to perform a usability study with your target demographic. If you start getting puzzled looks from your usability groups, then you should send the project back to the drawing board.

Paying for keywords on search engines is a good method to get customers, but you will need deep pockets. Some search engines charge by the number of impressions and some charge by number of clicks. There is also a limit on the number of keywords (relevant) that an organization can invest in. Companies typically have defined budgets for search engine marketing (SEM) by paying for advertisements on search engines, social networks or site that the target demographic visits.

It’s key to understand what words your target demographic is using to search for your products. Good content that describes your product or service is important. Use simple sentences to describe the product. If a product is incorrectly described, then it will be next to impossible to find. Remember, slightly better copy will help sell the product.

Remember not all products are appropriate for online purchase. So retailers should not dump all the products online.

It is important to focus on merchandise that you can get from an offline store, not just on what you can buy online. And it’s worthwhile to spend time in defining a reasonable online price point. Offer a coupon to help in conversion and find that tipping point.

Good copywriters who have product knowledge can be helpful. It is critical to use the right words and convey meaning. Consumers scan and skim for information to look for words that they are familiar with or have heard of.

Let’s face it, retailers and wholesalers want to maximize conversion. To minimize the distractions for the consumers, they need to send them through a well orchestrated funnel so that it will result in a sale. Some of the retailers do not have the online brand equity, which means consumers never get to their site.

There are multiple ways you can get consumers to the online store, and it depends on other channels retailers have. Social networks and the retailer’s overall social presence are important in order to not miss out a completely new era of Facebook and Twitter interaction. It is key to have a social strategy that can cross influence search and links to merchandise. Having a multichannel strategy is important as it has a cross influence that helps build equity for online, as well as for offline.

Another important technique is search results showing bundled products. Consumers are looking for online deals, and they want to weed out the ones that do not meet their price point. Retailers and wholesalers are moving to bundled pricing that would tip the customer over to complete the sale. For instance, if you are in the market for a digital camera, the options you are presented is camera, with a memory card, a camera bag, and possibly a lens at the price point you may be interested versus another listing that has just the camera. Now the convenience factor kicks in, where you get everything you need (and don’t) in a bundle. The retailer may include a “limited time only” clause to tip the consumer over.

It is important for retailers to focus on pricing for the products they are offering. One area that the online retailers must stay away from is price wars. In the end it results in poor service performance.

Fine tuning search strategy for merchandise improves the conversion for retailers and helps consumers get to the product or service they are interested in, at a price point they are comfortable with, and at a point of convenience for them.

Kuruvilla Mathew is a practice architect with UST Global, a leading provider of IT services and solutions for Global 1000 enterprises. He is an enterprise architect by trade and works with clients in providing solutions on various enterprise initiatives. Mathew can be reached [email protected].

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This could be ugly

BY CSA STAFF

Target is scheduled to release monthly sales for March this Thursday, and the company has already indicated its same-store sales figures won’t be pretty due to the late arrival of Easter. The holiday isn’t until April 24 this year, so the bulk of sales related to Easter will occur in April whereas last year Easter fell on April 4, so a greater percentage of seasonal sales fell in March. The situation wreaks havoc on monthly comparisons, which is why Target has forecast March comps will decline in the mid to upper single-digit range as the results are compared to a prior year period that included the benefit of Easter.

Assuming the company produces the anticipated negative numbers, the March weakness is then expected to be offset by a hearty performance in April with comps currently forecast to be in the mid-teens. That figure may be updated come Thursday as Target gets a read on whether promotional efforts that have been in stores now for several weeks prompted shoppers to pull forward some of their seasonal spending. Such an impact is likely to be minimal, which sets the company up for a monster April, as results are aided by the late Easter in addition to what are likely to be more favorable weather conditions, which bodes well for outdoor activities which are an important part of Easter.

By the end of April, when the same-store sales situation has sorted itself out, Target is likely to be in the range of a low single-digit increase for the combined two month period. At least that is the officials guidance provided at the time February results were released and the negative number for March was forecast.

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Kellogg goes racing with Target

BY CSA STAFF

Target Chip Ganassi Racing (TCGR) has partnered with the Kellogg Company to become a primary sponsor on the number 10 Indy car driven by Dario Franchitti, winner of last week’s Honda Grand Prix of St. Petersburg and a three-time Izod IndyCar Series champ.

Franchitti will pilot the number 10 Kellogg’s Honda Dallara for TCGR in round four of the Izod IndyCar Series in Brazil at the Itaipava Sao Paulo Indy 300 presented by Nestle on May 1 and in round 14 at the Baltimore Grand Prix on Sept. 4.

“Kellogg Company has been involved with motorsports on a number of levels through the years, but this is our first foray into an Izod IndyCar Series program. Dario is a tremendous talent and we look forward to him and the team representing us on and off the track in 2011,” said Melissa Pawlowicz, sr. director of consumer promotions with Kellogg.

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