Behavioural merchandising is the process of using a customer’s behaviour to promote, place and display products to maximise retail sales revenue. For online retailers, this can be as simple as using data on where a site visitor has been directed from, what they search the site for, what products they click on and most importantly what they buy. Knowing the answers to these questions can dictate what product promotions and services each visitor should be driven towards at every possible point of interaction.

It effectively offers customers a personalised shopping experience that is highly relevant, trustworthy and adapts to ever changing customer needs and preferences automatically. Being automated, it also means that it can offer retailers a more cost effective merchandising solution to manual merchandising.

Effective behavioural merchandising is done through the creation of algorithms which provide real-time recommendations based on users’ behaviour on any given site. These algorithms can provide both generic recommendations based on the site’s collective intelligence and also deliver more personalised recommendations based on an individual’s past behaviour and also their current behaviour.

Three ways in which Behavioural merchandising can be effective:

 Weighted User Journey

  • Algorithms track users’ actions on a site and give a weighting for each action. These recommendations are based on what has been viewed, searched for, added to a shopping basket and also what has been purchased by the user with regards to both that users’ previous actions and the actions for all the other users on this site.

Previous User Behaviour

  • When it comes to previous user behaviour, the weighted user’s journey algorithm is used to create product recommendations based on previous actions in comparison to the collective intelligence of all site users.

Google Referrals

  • Recommendations are constantly being updated which means that actions such as viewing, purchasing or adding to a shopping basket will affect recommendations in real-time. What a customer typed into Google to arrive at a website can be searched to determine that product recommendations are suitable for each individual customer.

Some people have questioned the worth of Behavioural merchandising in the past but when considering if it is right for you, think about the following proof points:

  • Behavioural merchandising is extremely trustworthy. It is generated by peer consumers, not marketing professionals. Consumers are far more likely to trust their peers than online marketers.
  • Behavioural merchandising is flexible and adaptive. Being able to take into account collective behaviour in real-time means that it can respond and change quickly to preferences of visitors.

Please note the views expressed in this blog are the views of the author, Andre Brown and do not represent the view of Locayta, its employees or its shareholders. For more information about Locayta, visit www.locayta.com