A price Merchandising segmentation strategy. A guide for growing your average order value.
Assuming that you run a sell-out analysis in the last 12 months, excluding the seasonal ones, and you found that your most sold products that make your business profitable are X.
It's possible to understand from the Google Analytics data where and how to give greater availability of warehouse or instead decrease them, thus optimizing the spaces according to the forecast sales based on statistical data.
Creating a strategy based on price to better understand which products can have the greatest effect on the conversion rate and have a wiser use of merchandising in techniques applied to market strategy.
I assume that downstream of our merchandising analysis, X SKUs make up the bulk of the turnover. You could think of organizing the merchandising as follows, but you should take present that the percentages are not shown because they should be applied in different way case by case:
% LOW PRICE - Upselling
% LOW MID PRICE - Promotions
% MID PRICE - Crosselling
% MID HIGH PRICE - Fashionable items
% LOW PRICE - Upselling
Selling your client a bigger, better or more expensive version of what they originally wanted.
I can use 20% of our catalog to implement Upselling strategies, on multiple channels.
- E-commerce: put these products in a dedicated section in the cart page;
Remarketing: generate a custom audience you can promote upselling products in your dynamic ads; - Mail: use Autopilot, or some other marketing automation product, for creating different automation and triggers to engage inactive customers or do some other interesting stuff.
% MID LOW - Promotions
It's a good driver to acquire new customers.
Engage more users using discounted and offers through landing pages or first sign up to new users, to manage all the demographic and behavioral data to segment the audience in the right way.
- Programmatic: promote to the audience has never been in touch with your brands and sent the traffic directly to the product page. Promise a gift to acquire the customer by the registration form;
- Feed: promote through Google Shopping, for example (to the new potential audience) discounted and limited promotion products. Drive the traffic to the product page or a landing, created ad hoc.
% MID - Crosselling
Selling additional items to your client, usually related to the product.
One of the most powerful biological driving forces for humans is the herd instinct. Though this was biologically designed to improve our survival rate, in modern times it has morphed into a peculiar strain of FOMO (fear of missing out). If everyone else has a fidget spinner, then you need a
fidget spinner too.
- Offer small additions to purchase (via pop-up) as soon as the product is placed in the cart. Make sure that it's related and relevant.
- Offer smaller-priced items at the cart through a pop-up or dedicated section under the cart resume.
- At the checkout, offer products that have also been purchased by others using contextual photos embedding Instagram feed (social proof).
% MID HIGH PRICE - Fashionable items
The most desirable products bought by the most loyal customers.
- Ecommerce: show a carousel, in featured positions, possibly through a machine-learning algorithm to perform better;
- Ecommerce: create "immersive" product page to explain the best product qualities, such as materials, performance, etc;
- Email: drive best products qualities through marketing automation campaigns to loyal customers and more inclined to buy;
- Influencer: drive more traffic using VIP which sponsors these top product's brand
Test the e-commerce pricing strategy
it's important now to measure and test the success of the changes you make to your online store's pricing strategy. Ideally, every change should be tested and validated with an analytics tool.
Pricing Analytics tools (or Price Optimisation Tools) can analyze your historical data and support you by making recommendations to increase or decrease specific prices in order to either increase profitability or drive revenues. If you try to search on Google you should find some really interesting.
These products can analyze if your 'Summer Sale' (where you implemented a pricing strategy) increased your conversion rate, or if the newer products in your online store are generating more profit than older products.
You can view the main KPIs easily connecting this Data Studio dashboard by Google Analytics connection. You don't share the data with anyone.
