When shopping online, people can’t touch or examine products closely like in real life. So they rely on the visuals, media and descriptions to make their decisions. This has always been an issue in ecommerce ever since it got popular going back to the 1990s. And ecommerce brands have been looking for ways to present their products so that has the best possible influence on the purchase decision of their customers.
This is called digital merchandising (or ecommerce merchandising) and it has become a rather refined strategy these days. In this article, I’ll explain what digital merchandising is, why it’s necessary for every ecommerce brand, and how to create the perfect digital merchandising strategy.
Summary:
- Digital merchandising shapes how online shoppers discover, understand, and choose products.
- A strong digital merchandising strategy is essential for ecommerce success as buyer attention becomes more fragmented, trust is fragile, and traffic acquisition grows more expensive.
- Top digital merchandising tactics include data-driven product placements, personalization, optimizing on-site search, high-quality visuals/UGC, and continuous testing.
What is digital merchandising?
Digital merchandising (online merchandising or ecommerce merchandising) is the practice of strategically showcasing products on digital platforms (such as ecommerce platforms, mobile apps, marketplaces, and social media) to improve product discovery and increase sales.
Digital merchandising is the online form of product merchandising which has been popular among physical store owners and franchises for ages. And its goal is to help online visitors find the right products quickly through the right structure and recommendations, and persuade them to buy.
The right digital merchandising strategy has a direct influence on customer satisfaction and revenue growth.
Digital merchandising functions in these 3 core areas:
- Guiding attention: steer shoppers’ eyes and clicks toward what truly matters (relevant, in-stock, profitable, or strategic products).
- Reduce uncertainty: remove doubts about “Is this right for me?” through clear information, proof, and context.
- Shape decisions: nudge shoppers toward better choices (for them and the business) using layout, ordering, and smart recommendations.
Why is digital merchandising important?
Digital merchandising is important because it influences how shoppers view and select products on digital platforms. It determines what products they find, what they understand from those products, and ultimately what they buy.
Digital merchandising blunders such as poor design, cluttered, incomplete or irrelevant product product information, lack of visuals, or poorly prioritized product listings will cause confusion, and will lead to shoppers overlooking key items, losing confidence, and ultimately abandoning the purchase.
There are three main reasons why digital merchandising is important:
1. Buyers’ attention is fragmented
When online visitors land on your website from search engines, social media platforms, email, or mobile apps, they are usually distracted and with very little patience. If product discovery is weak (bad site search, messy category pages), relevant products simply never get seen. That’s lost revenue.
Younger customer segments like GenZ are especially quick to abandon shopping experiences that feel irrelevant or cluttered. As they’re redefining luxury values and digital shopping experiences entirely, providing a strong product discovery process is even more essential.
2. Confidence is fragile online
Online customers can’t touch or try products. They rely on high quality images, clear product descriptions, user generated content (like customer photos and reviews, and BTS content), and social proof to decide. If your product merchandising and visual merchandising are thin or inconsistent, modern consumer expectations aren’t met and they lose confidence in your brand.
3. Traffic is getting more expensive
Ecommerce brands pay a lot for traffic. Without strong ecommerce merchandising, you pay to bring online shoppers in… and then fail to convert them. That’s why ecommerce merchandising is a core driver of ecommerce success, not “just UX.”
With the cost of traffic acquisition rising for ecommerce brands, you don’t want your traffic to have a low on-page conversion rate due to wrong product presentations.
Top digital merchandising practices you shouldn’t miss
1. Efficient navigation menu
Your navigation menu is the heart of your website (this is not an overestatement). When visitors land on your website, they use your navigation menu to find the product categories they’re looking for.
Here’s how you can design your navigation menu:
- Use clear labels.
Avoid internal jargon and use category names shoppers instantly recognize (e.g., “Pants & Shorts” instead of “Lower Body Apparel”). - Keep the top menu simple & scannable (7-9 primary categories max).
A clean top navigation prevents overwhelm and helps shoppers quickly find their path. - Use mega menus or well-structured dropdowns.
Mega menus work for large catalogs by showing grouped subcategories, visuals, and featured items; simple dropdowns work for smaller stores. - Prioritize high-impact products (“New,” “Trending,” and “Sale”).
These categories always attract attention and have high conversion rates. - Optimize for mobile.
Mobile commerce dominates these days, so your website’s navigation must be thumb-friendly and easy to scan on small screens.
2. Data-driven product placements on category pages
Make sure customers can see high-performing and relevant products first in each category. You can use personal data, purchase data, and customer behavior signals to automatically place the most relevant products at the top of each category.
When designing and structuring your product categories, avoid including too many categories in one page. Overcategorization limits users’ ability to find relevant products, and eventually leads to frustration. According to a study by Baymard, 75% of sites they benchmarked suffer from overcategorization or including too many categories on a page.
Here’s how you can design and structure your product categories:
- Rank products by relevance.
Use personal data, purchase patterns, and customer behavior to show the most relevant and personalized offers upfront. Don’t simply rely on an “alphabetical” order, or “newest” products. - Consolidate and group cluttered categories.
Overcategorization confuses shoppers. Group similar categories into parent categories and use filters to make navigation easier. - Feature best sellers upfront.
Showing best-sellers in the top rows reduces uncertainty and drives shoppers toward proven choices. - Use dynamic filters to simplify complex categories.
Strong filtering (by price, size, color, shipping speed, rating) helps shoppers sift through complex categories and find what they’re looking for more easily. - Continuously optimize product rankings with AI.
Let AI algorithms adjust product ordering based on seasonal trends, stock changes, and customer behavior so category pages never feel irrelevant and stale.
3. Optimize on-site search experience
69% of shoppers go straight to the search bar when they’re looking for a product , and 80% of shoppers exit a brand’s site because of poor search.
Here’s how you can optimize your website’s search experience:
- Fix typing mistakes automatically.
Support misspellings, slang, partial words, and synonyms so shoppers never hit a dead end due to imperfect typing. - Use smart auto-suggestions.
Show helpful predictions (queries, categories, products) as shoppers type in the search bar to speed up discovery. - Avoid zero-results.
Replace empty pages with near matches, related categories, and best sellers to keep people’s customer journey uninterrupted. - Rank by relevance.
Prioritize search results based on popularity, conversion data, inventory, and relevance to match what the shopper actually wants. - Provide powerful filters in the search results.
Provide clear, mobile-friendly filters (size, color, price, rating, shipping speed) so shoppers can instantly narrow results.
4. Personalize product discovery
According to Mckinsey, 71% of consumers expect personalized interactions and 76% become frustrated when they don’t get them. Personalized product recommendations is one of those digital merchandising tactics that has a direct influence on customer loyalty.
Start by Personalizing your homepage design, navigation, and category pages using data on customers’ personal data, browsing history, purchase history, and real-time purchase intent.
- Show you remember the customer.
Use browsing history and purchase data to greet returning visitors with messages like “Because you viewed…”, “Pick up where you left off”, or “From brands you like” on the homepage, product pages, and in navigation. - Blend global bestsellers with personal recommendations.
On category pages, combine overall bestsellers with items tailored to that shopper’s behavior (e.g., styles they browsed, sizes they wear, price bands they choose). - Continuously test and fine-tune product recommendations.
Recent studies show that while most consumers welcome personalization, a large number have had negative experiences that led them to break off interactions or lose trust. You need to be careful with personalization. Track CTR, add-to-cart, and conversion from personalized modules, and A/B test different logics (recent views vs. similar items vs. complementary products). Regularly remove underperforming or “creepy” patterns to keep the customer experience intuitive and respectful.
5. Use high-quality content
Use high-quality images, descriptions, and videos across all content online. Online shopping is dependent upon high quality visuals and descriptions because customers can’t touch products like in physical shopping experiences.
- Use high-quality images that clearly show product features.
Photograph each product from multiple angles with consistent lighting and styling so shoppers can inspect details without guessing. 3-D modeling and augmented reality can do wonders here. - Integrate user-generated content (UGC) for social proof.
Pull customer photos, reviews, and Q&A automatically into product pages to gain customer trust on the spot. - Maintain consistent content standards.
Use templates and content checklists in your digital marketing and digital merchandising so every content asset follows the same structure, requirements, and formatting patterns. Maintaining consistent branding is an effective strategy for selling products online.
6. Provide contextual comparison and decision support
Add comparison tables, size guides, fit finders, material details, and “who this is for” modules on product pages. These sections help customers understand the differences between similar products. They also reduce cart abandonment by providing personalized shopping experiences, and reducing hesitation.
- Use structured comparison tables. Lay out product features side-by-side in tables so online shoppers can scan differences at a glance.
- Help shoppers find the right fits and sizes through dedicated tools. Offer size charts, fit finders, or questionnaires that walk shoppers through selecting the right option.
- Add “who this is for” sections to frame product intent. Describe ideal use cases or customer types for products so visitors can immediately understand who the product is for.
7. A/B and multivariate testing of merchandising elements
A/B testing and behavioral analysis work together as the analytical backbone of modern digital merchandising.
Heatmaps, session replays, and funnel data reveal how online customers actually move through category pages, product pages, and the buying journey.
And A/B and multivariate tests validate which merchandising decisions (such as layouts, placements, UGC modules, or personalized recommendations) perform best.
- Use behavioral data to identify what needs testing.
Analyze user behavior through heatmaps, replays, and funnel reports to see where online customers hesitate, or skip products. Translate these insights into precise A/B testing hypotheses. - Run controlled A/B tests on individual merchandising elements.
Test one change at a time (such as moving personalized recommendations, adjusting visual merchandising layouts, or repositioning social proof) so you can isolate what affects conversion rates. Apply the same structure across online stores and mobile apps to keep results consistent. - Document every result and refine digital merchandising elements continuously.
Create a log of test designs and outcomes. Feed these learnings back into your digital merchandising strategy so each iteration strengthens customer experience, brand identity, and digital commerce performance.
8. Measure revenue influenced by digital merchandising elements
Track how much revenue is influenced by digital merchandising elements such as personalized recommendations, complementary products, data-driven product placement, and site search optimization. Leading brands measure:
- % of revenue influenced by product recommendations
- % of orders with complementary products (cross selling)
- Average order value changes after merchandising updates
- Customer loyalty and satisfaction influenced by ecommerce merchandising strategy.
- Map all merchandising touchpoints before measuring impact.
Identify where buyers interact with merchandising elements (e.g. AI product recommendations, social proof, UGC, and visual merchandising, across their customer journey. Tag each element using Google Analytics or an equivalent tool so you can track customer engagement and link it to purchase data. - Attribute revenue based on customer data and the level of interaction.
Separate “viewed,” “clicked,” and “added to cart” interactions to understand how each merchandising element contributes to sales. Use customer data such as purchase history, or browsing patterns to determine which touchpoints influence loyal customers and which influence first-time visitors.
Top digital merchandising examples to learn from
Here are some examples of how top brands use digital merchandising to increase sales.
1- Ikea’s augmented reality and custom 3D designs
IKEA Place is an augmented reality (AR) tool that lets online shoppers place IKEA furniture inside their rooms using their phone’s camera.
Instead of guessing whether a sofa, table, or bed will fit or look right, customers can view true-to-scale, 3D models of IKEA products directly in their physical space.
With IKEA Place, website visitors or mobile app users can:
- Scan a room with their phone;
- Select a product from the IKEA catalog;
- Drop the product into their real environment as a 3D AR object;
- Walk around it, rotate it, and see its exact size, shape, and color;
- Take photos, save configurations, and compare options before buying.
2- Sephora’s personalized product recommendation
Sephora’s Shade Finder helps customers find the right foundation shade by matching existing makeup or skin tone. They also have a Smart Skin Scan in their app: users take a selfie, and the tool analyzes skin concerns, then recommends personalized skincare products.
Offering personalized product recommendations is one of the most effective tactics in online merchandising.
Link to video:
3- ASOS product filters
ASOS provides rigorous product filters to guide shoppers to find the item they’re looking for. In their product category pages, products could be filtered by sort, size, style, color, body fit, and brands, among other options.
Product filters are absolutely necessary for sorting out large catalogues and finding the right fit.
ASOS also offers a Fit Assistant tool on their website and in their app. The tool can suggest your right fit based on your height, weight, and fit preferences.
4- Glossier’s cross-selling
Glossier has a strong AI product recommendation engine that showcases products relevant to the item being viewed by the shopper.
This is not a ground-breaking technology, and ecommerce brands have been using it for a long time. But the way Glossier integrated this feature into its product viewings and the depth of details in it are one of a kind. Cross-selling increases average order value and is a necessary part of an effective online merchandising strategy.
Finally: should ecommerce brands invest in a digital merchandising strategy?
Absolutely!
A modern digital merchandising strategy is a must for ecommerce brands these days. When customers land on your website, they are rather confused and don’t know where to look for specific items.
Without strong visual merchandising, strategic product placement, and data-driven optimization, even great products online stay hidden and your traffic simply doesn’t convert. And always keep in mind that buyers’ attention is fragmented, consumer trust in online brands is dwindling, and acquiring traffic is getting more difficult and expensive.
Use the tactics explained above to make sure you’re doing ecommerce merchandising right.
FAQs:
What is product merchandising?
Digital merchandising (or online merchandising) is the practice of organizing, presenting, and recommending products online in a way that improves product discovery in ecommerce stores, mobile apps, and social commerce platforms.
What is the difference between physical and digital merchandising?
Physical merchandising focuses on how physical products are arranged, displayed, and promoted inside brick-and-mortar stores. Digital merchandising does the same for online stores. Online merchandising uses proper navigation, category pages, site search, personalized recommendations, high-quality content, and data-driven product placements to help online shoppers find the right products.
What does a digital merchandiser do?
A digital merchandiser manages how products are organized, displayed, and recommended across an ecommerce store, mobile apps, and other digital channels. They optimize navigation, category pages, site search, product pages, and personalized recommendations using customer data and user behavior. Their goal is to improve product discovery, average order value, and, to a large degree, customer experience.
What are some examples of ecommerce merchandising strategy?
Here are some examples of an effective ecommerce merchandising strategy:
- Personalized recommendations based on customer data.
- Optimized site search with strong filters and NLP.
- Data-driven ranking on category pages using behavioral signals.
- User generated content (UGC) for social proof.
- Strategic product placement on homepages and product pages.
- A/B testing to refine layouts and merchandising elements.
- Cross-selling modules that surface complementary products.
