What do window displays, product placement, and impulse-buy sections all have in common? Merchandising.
For decades, it’s been the unsung hero of retail—guiding shoppers, sparking emotions, and driving sales. But in the digital age, the stakes have skyrocketed.
Welcome to the era of digital merchandising. No longer just about where products sit on shelves, it’s now about crafting personalized, immersive experiences online—experiences that turn browsers into buyers and single-purchase customers into brand loyalists. And the tools? Data, AI, and a healthy dose of creativity.
Let’s dive into how digital merchandising evolved, why it matters, and, most importantly, how you can use it to transform your ecommerce business.
What is Digital Merchandising?
Picture this: A customer lands on your website. They don’t know exactly what they’re looking for, but they’re curious. If your digital merchandising is on point, they’ll feel guided—effortlessly discovering the right products at the right time. If not? They’ll bounce faster than you can say “abandoned cart.”
Digital merchandising is the art and science of presenting products online to maximize engagement, conversions, and customer loyalty. It’s not just about making products visible; it’s about making them irresistible. Think personalized recommendations, intuitive navigation, dynamic visuals, and interactive content—all designed to mimic (and often surpass) the in-store experience.
Traditional vs. Digital Merchandising
Here’s the breakdown:
For example, in-store, a bakery might place cookies by the checkout to tempt last-minute buyers. Online, digital merchandising does the same with AI-driven “You might also like” suggestions.
Why does it matter?
Because online shoppers are ruthless. If they can’t find what they’re looking for (or if the experience feels generic), they’re gone. Get your digital merchandising right, though, and you’re not just selling a product—you’re creating an enjoyable journey that makes the actual purchase feel like the cherry on the cake.
The Evolution of Digital Merchandising
Rewind 20 years. Ecommerce was clunky. Product pages were static. And personalization? Practically non-existent. Fast-forward to today, and digital merchandising has exploded, thanks to advancements in tech and consumer expectations.
From Static to Dynamic
The early days of ecommerce mirrored the limitations of print catalogs—functional but uninspiring. As competition grew, so did the need to replicate and even surpass the in-store experience online. Static images evolved into interactive visuals with 360-degree views, zoom-in features, and even videos that showcased products in action.
Dynamic content has been another game-changer. By using data, brands now deliver personalized product recommendations, targeted ads, and email campaigns tailored to individual shoppers. According to Salesforce, sixty-six percent of customers expect brands to understand their unique needs and expectations—and dynamic merchandising meets that demand head-on.
The Social Media Shift
Then came the social commerce revolution. Platforms like Instagram, TikTok, and Pinterest turned casual scrolling into a shopping spree, merging entertainment with ecommerce. Brands embraced shoppable posts, influencer campaigns, and user-generated content (UGC) to humanize their products and build trust.
Real customers showing real results create authenticity that no glossy ad can replicate. Combine that with Instagram Stories driving traffic directly to product pages, and you have a blueprint for engagement that converts.
Why is this important?
Because seventy-five percent of Instagram users say they’ve taken an action, like visiting a website or making a purchase, after seeing a product post on the platform.
Social commerce has blurred the line between discovery and purchase.
Enter AI and Personalization
Finally, artificial intelligence has become the backbone of modern digital merchandising. AI doesn’t just react—it predicts. It analyzes customer behavior in real time and offers hyper-personalized recommendations that can feel eerily intuitive.
Think Netflix-style “recommended for you,” but applied to ecommerce. AI-powered algorithms track every click, scroll, and purchase, then use that data to deliver tailored results.
Even more transformative is AI’s ability to provide real-time behavioral insights, so brands to pivot their strategies (almost instantly) and stay relevant every second.
The evolution of digital merchandising isn’t just a story of technological progress—it’s a reflection of changing customer expectations. From static pages to dynamic experiences, from social media to AI, the tools are here to create shopping journeysthat are as engaging as they are effective. The brands that embrace these shifts aren’t just keeping up—they’re leading the charge.
The Role of Product Merchandising in Ecommerce Success
Here’s the bottom line: Product merchandising directly impacts what customers buy, how much they spend, and whether they return. It’s your growth engine.
It determines what shoppers see, how they interact with your brand, and whether they leave your site satisfied or frustrated. Done right, merchandising becomes your growth engine, not just a sales tactic.
Why Product Merchandising Matters:
- Conversion rates: A well-merchandised product page doesn’t just showcase items; it removes friction. Clear navigation, compelling CTAs, and relevant recommendations guide customers seamlessly to checkout.
- Customer engagement: Beyond buying, great merchandising keeps shoppers exploring. Visual storytelling—like high-quality images, videos, and user-generated content—turns casual browsers into captivated audiences.
- Average order value (AOV): Upselling, cross-selling, and bundling aren’t just strategies—they’re revenue multipliers.
For example, Amazon’s “Frequently Bought Together” isn’t just a convenience; it accounts for up to thirty-five percent of the platform’s total revenue. That’s the power of strategic product placement.
Digital Merchandising Strategies for Modern Ecommerce
According to Coveo’s 2024 Commerce Industry Report, ninety-four percent of modern shoppers start or end their journey in the digital space. So it’s worth the extra effort to strategize for it.
Successful digital merchandising strategies blend data, creativity, and a deep understanding of customer behavior to maximize engagement and conversions. Here are three approaches that can help:
1. Data-driven Product Placement
Effective merchandising starts with insights—not instincts. Using the right tools you can quickly identify where users are clicking and lingering on your site.
Once you have the data, ask:
- Are the most popular products or categories easy to find?
- Are users interacting with banners, CTAs, or suggested products?
- Is there an opportunity to cross-sell or upsell based on user behavior?
These insights can inform strategic product placement—whether it’s spotlighting bestsellers, new arrivals, or high-margin items. Analytics also help you track top-performing products and refine your layouts accordingly.
Leveraging browsing and purchase data allows you to offer tailored product suggestions, making it easy for customers to discover what they need—or didn’t realize they needed. The result? One-time shoppers become loyal customers.
2. Personalized Recommendations
Generic suggestions no longer cut it. Personalization is the key to creating shopping experiences that resonate. Use past purchases, browsing history, and demographic data to recommend complementary products or offer exclusive discounts.
AI-driven personalization adds another layer, delivering hyper-relevant suggestions in real time.
For example, Spotify’s playlist algorithms inspired ecommerce brands to take personalization to the next level. Companies like Amazon and Wayfair use similar strategies to suggest products that feel tailor-made for each shopper, driving both conversions and loyalty.
3. Social Proof and Reviews
Trust is currency in ecommerce, and social proof builds it. Highlight glowing reviews, UGC, and real-time purchase activity to reassure hesitant buyers. Simple additions like “Rated 4.8 stars by 1,200 customers” or “20 people bought this in the last 24 hours” can create a sense of urgency and credibility.
The Role of AI and Personalization in Digital Merchandising
If data is the foundation, AI is the architect. Together, they can transform digital merchandising from good to unbeatable.
AI in Action:
- Real-Time Insights: AI analyzes shopper behavior instantly, adjusting recommendations in real time.
- Inventory Optimization: Predictive analytics ensure you never run out of bestsellers (or overstock duds).
- Generative Experiences: AI-powered assistants guide customers, answer questions, and even upsell.
Ready to Transform Your Digital Merchandising?
Digital merchandising isn’t just about selling more—it’s about creating experiences that customers love and remember. Take the first step by exploring how Coveo’s AI-powered solutions can elevate your strategy.
FAQs
What is the meaning of digital merchandising?
Digital merchandising is the art (and science) of crafting irresistible online shopping experiences. It’s about showing products while guiding customers with personalized recommendations, smart layouts, and engaging visuals to turn clicks into conversions.
What is the difference between digital marketing and merchandising?
Think of digital marketing as getting customers to the door and digital merchandising as getting them to buy once they’re inside. Marketing focuses on attracting traffic, while merchandising makes sure that traffic converts with perfectly optimized product presentations.
What is product merchandising?
Product merchandising is the strategy of making products not just visible but downright desirable. Whether it’s an in-store display or an online “You might also like” widget, it’s all about driving decisions and boosting sales.
What are examples of merchandising products?
From Amazon’s “Frequently Bought Together” combos to a “Top Picks for You” carousel, examples of merchandising are everywhere. They’re the small nudges that guide customers to discover—and buy—more than they might have planned.
How has visual merchandising changed over time?
Once limited to static window displays and endcaps, visual merchandising has exploded into a digital-first world. Now, it’s 360-degree product views, AR try-ons, and social commerce that bring products to life online.
What is the difference between physical and digital merchandising?
Physical merchandising is about placement—what sits on shelves and where. Digital merchandising goes further, using AI and data to serve up hyper-relevant products at the right moment, turning browsing into buying.