Profit Driving Merchandising Tips, Part 2

This past Cyber Monday was record-breaking, especially in terms of eCommerce. US shoppers racked up $9.4 Billion dollars in purchases online and by mobile device, which was up $1.5 Billion over last year. A big part of the success of online retailers is the use of Social Media. In this Part 2 of the Merchandising Tips, we will cover how Social Media as well as Ratings and Reviews, can have an impact on sales and how merchandisers can leverage it.

Social media has grown into one of the dominant forms of communication in the modern era, so its role in eCommerce is critical. Companies must capitalize on this trend by using data gathered on social media sites to make more informed decisions about how to merchandise their products. It is important to pay close attention to the general buzz surrounding products, promoting items that are generating interest and lowering items that are not. This makes it easier for users to locate items they have heard about on social media, potentially increasing sales and improving customer satisfaction.

Effects of social media on eCommerce

In a survey conducted by advertising research firm Nielsen, 84% of respondents said that they trust recommendations from people they know when making purchases, and 68% said they trust consumer opinions online. That’s compared to only 48% who said they trusted web video ads and ads on social networks. Clearly, what people say about products online can have a significant effect on sales, particularly in close social networks dominated by friends and family, such as Facebook. Based on these statistics, it is likely that social media buzz can have a larger effect on sales than marketing campaigns conducted by the company. This seems to be borne out in academic research, which finds that the number of social media mentions for specific products has a significant positive correlation to the sales of that specific product.

With Smart Merchandiser, a company can see how many likes and tweets a particular product is getting and adjust position accordingly. And the merchandiser can see all the tweets related to each product.

Ratings and Reviews

Much like social media, ratings and reviews can have a significant impact on the sales of individual products and brand value as a whole. Research shows that 91% of people regularly or occasionally read online reviews, and 84% trust online reviews as much as a personal recommendation. Companies must take these reviews seriously and act on them promptly to manage spikes in sales after positive reviews or customer satisfaction fallout after negative reviews. This necessitates having a clear picture of what people are saying online and using that information to take decisive action that addresses any issues and puts more focus on highly rated products.

Reviews affect sales

The Internet has made it easier than ever for customers to locate a wealth of information on products and services that they consider purchasing. One of the most important components of this information gathering process is the customer review. 72% of consumers report that they will only purchase an item online if it has positive reviews and 88% of consumers trust online reviews as much as personal recommendations. It is clear from these statistics that reviews can have a major impact on the buying habits of customers. This matters to eCommerce businesses because it is important to have highly-rated items featured prominently on the site, both to generate an overall positive impression of the store and to increase sales.

Effective review response is critical

Aside from increasing sales, reviews are also an effective way for customers to communicate their experience to businesses. This can provide the company with valuable information and help them mitigate any negative perceptions that might result from the release of an inferior product or other similar negative events.

Effective negative review responses

Address customer problems – One of the most effective ways to mitigate negative feedback is through quick, generous customer service. Providing refunds, discounts, or other compensation when customers have bad experiences can significantly reduce the likelihood that they will spread negative information. Up to 24% of customers will continue to seek out a retailer for two years after a positive customer service experience. By comparison, 39% will explicitly avoid a retailer for two years after a negative experience. Leaving a good final impression can mean the difference between a lost customer and a lifelong customer.

Provide updates and address inaccuracies – When a product has many negative reviews, it is important to keep customers updated about the steps taken to improve issues. When problems have been resolved, let customers know by making notes on negative reviews. This tactic is also important when negative reviews spread misinformation about a product.

Ask customers to leave reviews – There is strong evidence that customers tend to leave more positive reviews when asked to do so rather than when they choose to do so of their own volition. Companies that request reviews receive an average of only 7% negative reviews (1 to 2 stars) compared to 53% when no such request is made.

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Now that consumers have a voice, we can use leverage it as a guide for merchandising. If you would like to learn more about how you can harness this new dynamic merchandising feature, give us a shout at or 877-962-7478 and let’s get started.