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Why Merchandising Must Get Social

  |  September 7, 2010   |  Comments

User-generated content can influence shoppers during these three phases of online decision-making.

In the past when a shopper was looking for a TV, he went to his local retail store. To combat choice overload in product aisles, shoppers were met with tools designed to influence their decisions and help them buy confidently. End-caps showed featured products. Signage and point-of-purchase (POP) displays grabbed their attention. Sales staff was on hand to answer any questions. For manufacturers and retailers, these merchandising efforts were meant to lead the shopper to purchase their product.

But the decision-making process is no longer an in-store activity.

Many shoppers are increasingly making their purchase decisions online before ever setting foot in a retail store; Forrester predicts that by 2014, more than half of total retail sales will be influenced by the Web. Today's shoppers don't go to a store to determine which TV they want - they already know which product they want when they arrive.

But traditional merchandising efforts don't translate to the social Web. Trust in marketing is gone - people want to hear from others like them. "Social" is no longer a label that can be applied to certain aspects of business and ignored in others; it's just one more way to shop today. For merchandising to be relevant, it has to get social.

Social merchandising is all about context. Shoppers research online to discover products, compare or reduce choices, and build confidence in their final purchase decision. Bring contextual user-generated content (UGC) to the research process that maps back to the shopper's task. Here's how UGC helps shoppers in three phases of online decision-making.

Discovery Phase

At the widest point in the purchase funnel, shoppers go online to discover products. This often starts in a search engine, and UGC equips pages with the scalable freshness that search engines crave to maximize search results and drive traffic. Increasingly for some shoppers, this search starts on social networks. Friends' shared reviews, questions, stories, and products on these networks introduce shoppers to new products and draw them into the purchase path.

Once on an e-commerce site, shoppers in the discovery phase can shop by profile, starting their search on profiles of customers like them to see what products they like. UGC adds additional filters for discovering products, such as top-rated category pages.

Choice Phase

Online, the same obstacle confronts shoppers as in-store - choice overload. Product specs and marketing copy can be nearly identical from product to product. Reviews and stories from "people like me" add a new filter to product choices to help shoppers decide.

E-commerce doesn't exist in a vacuum. Most shoppers arrive on your site with preconceived notions about products and brands. UGC helps to validate or combat these with trustworthy testimonials from real customers.

Additionally, customer Q&A help shoppers make choices based on their specific needs. Reviews and specs may lead a shopper to a specific flat-screen TV, but they may need more info to make a purchase. The ability to ask questions like "Can I hang this TV on my wall?" can lead to information shoppers need to move past the choice phase and select a product for purchase.

Validation/Confidence Phase

Once they've decided on a particular product, UGC can give shoppers the last bit of confidence they need to make a purchase. Much like in the discovery phase, shoppers can check profiles of reviewers to make sure people like them like the product. With features like Facebook Connect, they can also see what their friends on social networks think of the product.

Customer opinions also work to set expectations for shoppers. Reviews (especially negative reviews) give a realistic depiction of performance, leading to more satisfied buyers and decreased returns. And UGC can point out product details to help shoppers make the exactly right purchase for them - "These shoes are fantastic, but they run a little small. Be sure to get the next size up."

Shoppers are never alone online - networks of customers are always just a click away, ready to share their opinions. Will that click steer them away from your site? Social merchandising helps manufacturers and retailers alike by serving the end-goal of both - helping shoppers buy. As more shoppers make their decisions online before ever entering a retail store, merchandising must get social to stay relevant.

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Sam Decker

Sam Decker is founder and CEO of Mass Relevance, the leading enterprise social curation company. He speaks and consults on digital growth strategy, based on years of experience in technology and social markets. He has written two books on word-of-mouth marketing and is an award-winning blogger (www.deckermarketing.com). As former chief marketing officer of Bazaarvoice, the market leader in hosted social commerce applications that drive sales, Sam worked to help brands present the right user-generated content at the right time in the purchase path, bringing real value to the consumer and the business. Prior to Bazaarvoice he drove Dell's customer segmentation, their customer-centricity strategy, and led Dell's consumer website, building Dell.com into the largest consumer e-commerce site at $3.5 billion in annual sales.

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