Understanding Merchandise Optimization

Did you know that for the average DTC brand, more than 30% of site traffic comes from collection pages? Collection pages are critical as not only do they generate clicks, but they also play a significant role in driving traffic to individual product detail pages. In fact, 39% of all clicks are to product detail pages - and many of these start on collection pages.

RetentionX's Merchandise Optimization optimizes your Shopify collection pages and ensures that your best performing products get the visibility they deserve. RetentionX identifies your most enticing, high-converting, and profit-driving products and dynamically sorts them to make more money from your traffic.

Collection pages are a key factor in the success of your online store. Improving the performance of these pages can have a ripple effect, increasing traffic and engagement throughout your site, especially on the product pages where purchases are made. So by optimizing your collection pages, you're not just improving a single part of your site, you're improving the overall shopping experience and ultimately increasing conversion rates.

Numbers prove it: by increasing the number of product clicks on your collection pages - especially for products that are more likely to be added to shopping carts and convert - you can increase revenue per session by up to 60%. So let's find out how RetentionX can supercharge your product merchandising!

How to improve your collections pages

When shoppers visit your collection pages, they typically see a grid of products arranged in rows and columns. The position of each product within this grid has a significant impact on how likely it is to be clicked on. Optimizing product positioning on your collection pages isn't just about making the page look good - it's about using the data of customer behavior to increase engagement and sales.

Here's where it gets interesting: The relationship between a product's position on the grid and its likelihood of being clicked isn't linear- our analyses show that it follows an exponential function. This means that products positioned higher or more prominently on the page receive disproportionately more clicks than those in less prominent positions.

This finding has critical implications for how you should arrange products on your collection pages. By strategically placing high-performing products in these prime grid positions, you can significantly increase the likelihood that customers will click on these products, add them to their shopping carts, and ultimately make a purchase that leads to high profit over time.

How Merchandise Optimization works

RetentionX helps you assign the optimal position for each product on the collection page based on its individual performance, ensuring that the best performing products get the visibility they deserve. The following four metrics are considered to evaluate your products:

1. Click-Through Rate (CTR): We analyze both the expected and actual CTR for each product in its specific grid position. This helps us understand whether a product is over- or under-performing in its given slot, thereby measuring its attractiveness.
   
   
   

2. Add-to-Basket Rate: By analyzing the Add-to-Basket rate, we assess the quality of your collection offering by measuring how often a product is added to the cart. This helps us understand the effectiveness of your product detail page clicks.

   
   
   

3. Purchase Rate: The purchase rate evaluates how many products added to the cart actually result in a completed purchase. This metric helps us understand the efficacy of your products in converting customer interest into sales.

   
   
   
4. Product Lifetime Value: RetentionX also takes into account the 90-day LTV of each product. This metric calculates the average LTV of a new customer making that product their first purchase. By factoring in product return rates, repurchase probabilities, profit margins, and selling prices, we ensure that not only the top-selling products are prominently displayed, but also those with sustainable profitability.
   
   
   

What you'll get

With RetentionX's Merchandise Optimization, you'll discover your most enticing, high-converting, and profit-driving products. You also have the ability to turn on the dynamic sorting for your collection to make more money from your traffic without the manual effort.

Once Merchandise Optimization is activated in your account, you'll benefit from:

• Unique Insights: Gain a comprehensive understanding of your product and collection performance, eliminating the guesswork from your merchandising decisions.
• Higher Revenue per Mille: Ensure that products most likely to drive revenue and foster customer loyalty are prioritized for visibility. This maximizes the revenue generated per 1,000 collection views. RetentionX tracks RPM for your collections and monitors its development after Merchandise Optimization has been activated.
  
  
  
  
• Efficiency: Our optimization automatically sorts your products based on their performance scores in your Shopify storefront – and can be enabled individually for each collection.
  • You don't have to adjust anything manually; we provide visibility into the changes made and track performance.
  • The performance score isn't static; it's recalculated as new data comes in. This means that products are dynamically repositioned to ensure that the highest-performing products consistently receive the most visibility, while underperforming products can be demoted based on their updated scores.
  • You can also set sorting rules accordingly to boost new products, demote products with low inventory, or pin individual products.

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