Recently we’ve been treated to a sudden burst of British sunshine and it’s warmed up a potentially gloomy scenario for online retailers. Whilst BRC-KPMG reported a disappointing performance in online sales during February, it seems that the fresh Spring weather has picked things up quite nicely in March.

Spring has sprung – and so has online shopping

The latest figures shows that online retailers have seen sales up by 13.9% on March last year. Stephen Robertson, Director General of the British Retail Consortium, commented that the main areas of growth were in “people keen to buy clothes, footwear and garden furniture”.

Here’s the rub though. In the same report female shoppers are holding back on extra purchases. To quote Head of Retail at KPMG, Helen Dickinson, “female shoppers are tightening their purse strings, focusing more on lower price point items to control the household budget. This buying behaviour saw women’s clothing perform less strongly than men’s and childrenswear.”

The question this poses is, how can online retailers adapt to these seemingly conflicting priorities and achieve consistent retailing success across product ranges targeted at different consumer profiles?

Product recommendations: optimising the effects

Fashion ecommerce is here to stay. Our own client Boohoo is a prime example – recruiting 1.8 million shoppers in just 5 years. Even haute couture is jumping on the bandwagon, with revered designers Karl Lagerfeld and Alexander McQueen taking to the internet. At the other end of the scale, Tesco Clothing (also a client of Locayta) is now the UK’s second largest volume clothing retailer.

What’s more, online fashion is an area where product recommendations are at their most powerful. After all, fashion is all about accessorizing and coordinating. With product recommendations’ ability to drive sales by up to 45% it follows that optimised product and accessory suggestions are bound to generate big business for ecommerce retailers.

However, if you take a look at the red heels conundrum I explained in an earlier blog, you can see that two of the traditional recommendation methodologies – collaborative filters and content based filters, run the risk of clumsy group targeting that negates the desired effect by actually impersonalising results, not personalising them.

Product recommendations: the individual touch

Let’s get back to our cash strapped female shopper. If kids and men’s clothing sales are up in March but women’s clothing is struggling, this suggests she is prioritising her family over herself. But in fact, by using the right technology, it’s entirely possible to deliver product suggestions that will fit her value shopper profile as well as delivering the results she seeks for her family.

The key lies in moving away from group targeting and striking out on a whole new journey. Referred to by one intrepid blogger as hybrid recommender systems, we have taken the principle much further and developed Locayta Freestyle Merchandising®.

Freestyle Merchandising achieves a truly bespoke response to each individual user’s behaviour whilst matching this with retailing priorities, thus optimising product placement and hence online sales revenue. The principle is simple. The technology behind it, however, is incredibly sophisticated.

Powerful technology: compelling product placement

So how does the technology work? Well, several principles apply that make for a potent merchandising cocktail. The first ingredient is our intelligent algorithms. Ranking algorithms are a key feature in creating a relevant search hierarchy for relevant results. Behavioural algorithms, meanwhile, will track the behaviour of your individual users in real time and optimise results and recommendations accordingly. This ups the ante from traditional group targeting or responses to past user behaviour which may not be relevant to the shoppers’ current priorities.

Meanwhile, rules based merchandising enables the promotion, adjustment and positioning of products based on rules defined by the retailer. Key to retailing control is Locayta Balance Factor®. This unique tool allows you to define any metrics you like – price, size, new stock, sale stock – and tell Balance Factor exactly how important they are to you.

Balance Factor then applies your weightings automatically behind the scenes – whilst cooperating fully with our algorithms to present a balanced and fully optimised result for both you and the customer.

Mix in feature rich flexibility, manual or automatic control options, and the ability to manipulate key merchandising elements such a display advertising, brand adjacency, and multi-channel applications, and you have an advanced solution that’s easy to control and integrates with all main ecommerce engines.

Our clients have experienced proven revenue growth and increased conversion rates after implementing Freestyle Merchandising. Plus, thanks to its automated functionality, manual input and labour costs can be cut significantly. Want to know more? Get in touch with Locayta today and start maximising your ecommerce revenue.

Read more:

Sunshine lifts March sales, online and off Internet Retailing April 2012

Ecommerce growth is plateauing, how do you stay competitive? Geoff Galat April 2012

Karl Lagerfeld and Alexander McQueen take the internet Racked.com March 2012

A quick guide to product recommendation engines Rueben Corbo March 2012