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Digital Shelf Optimization: Conversations in REM with Mandy Critchley
May 5, 2023
The digital shelf has become the new storefront for brands. However, getting products online is only a small part of the battle. Brands face the challenge of optimizing their digital shelves to stand out in a crowded marketplace. To help brands tackle this challenge, we spoke with Mandy Critchley, Customer Success Director and Transition Director at CommerceIQ.
In this recap of a Q&A session hosted by our Director of Industry Insights, Tim Campbell, Mandy shares actionable advice for brands looking to improve their digital shelf presence and drive growth.
Tim Campbell: Let’s say, some brands are not yet convinced that content and ecommerce are so much more important now. What would be your quick pitch for investing in effective content management?
Mandy Critchley: You’re right, content management and optimization are crucial for success. With so much competition out there, you have only a few seconds to convince shoppers to buy your product. That’s why you need to invest in high-quality images and descriptive content that immediately portray everything your product has to offer, from its size to its nutritional content, for example.
The two main reasons to invest in content management and optimization are conversion and discoverability. If a shopper can’t quickly see and understand all the important details about your product, they’ll move on to the next product that allows them to do so. This will impact your conversion rates. If your product isn’t visible enough on search or on the “shelf,” your discoverability also suffers. That’s why content is one of the most important tools you have to move your products up the shelf and improve their visibility.
TC: How has digital shelf and digital shelf management changed over the past 10 years?
MC: The landscape has indeed shifted, from simply mastering “the basics” to being able to respond efficiently to changing situations in real-time. We know that sales value is determined by traffic, conversion, and sales price, and that profit is the margin after delivery costs. However, what’s changed considerably is the speed at which decisions can be made, and much of this change is driven by the technology that’s available now.
Whether it’s using technology to optimize media spend, sponsored ads, or managing stock levels in real-time, decisions are no longer being made in monthly meetings with retailers. The challenge now is to bring all these factors together and utilize technology to make simultaneous decisions.
TC: In terms of either content or even broader digital shelf management or optimization, what are the best practices that hold true across ecommerce platforms?
MC: The core process remains the same. If we break it down, there are two parts to consider: content into the retailer and content out to the retailer. Online, you have to look at how retailers are receiving and using information. Are you using a product information management (PIM) system? If you are, how are the retailers taking the information from that PIM and using it to create best-in-class content, for example? Are retailers taking advantage of all opportunities to display the information to shoppers, such as rich content, ratings, reviews, and multiple images? It’s also vital to benchmark competition to identify areas for improvement.
TC: If you go beyond that, what are the differences between retailers?
MC: Each retailer’s technology is different, which means there is no one-size-fits-all approach. The key is to understand the specifics of each retailer and use that knowledge to perform optimally for your brand. For example, search can be cut into three buckets. The first is content, which involves getting taxonomy and keywords right for each retailer. The second bucket is pay-to-play elements, which is more technology-driven and can vary across retailers. Some retailers prioritize promotion and sponsor positions, while others may not consider these factors at all. The third bucket is a conversion factor, which is typically a product of the other two buckets. It’s all about understanding what is within your capability to drive organically and what can be paid for, and to use this knowledge to create a strategy or playbook that works for each retailer.
TC: How do the best practices of digital shelf management differ across categories?
MC: In the CPG category, each category has its own unique shopper journey. Categories like baby food and pet food require reassuring content around ratings, reviews, and all of the nutritional information. But even within CPG, there are category drivers that focus on high engagement and others that are based on commoditized factors.
Outside of CPG, consumer electronics shopping, for instance, is a completely different experience. Shoppers will visit multiple websites to research a single product, but they may not buy from the retailer with the most reviews. They may search for the product name or serial number to price match and find the best deal.
TC: How do you ensure that brands use content to optimize ecommerce sales or performance?
MC: Brands often use scorecarding to report at a senior level and give line of sight about what’s happening in their categories. I think what’s more important is understanding the trends behind the data and taking action based on those trends. While there’s a wealth of data available, it can be challenging for large companies to make changes due to different roles and silos, so it’s crucial to bring everyone together under a common aim.
TC: Do you have any thoughts about the dominant challenges that organizations face right now in regard to digital shelf optimization (DSO)?
MC: There’s a lot of technology available to help retailers optimize their digital shelves, but the key challenge is the speed of decision-making. For example, some companies enable programmatic sponsorship of search positions based on products on a retailer’s site. Bidding happens in real-time, while the revenue growth or the sales teams set the eJBP for pricing and promotions, and the ecomm team buys sponsored search positions.
All of these decisions are made in separate teams, but they are based on the same ecosystem. The challenge is to ensure that they are not cannibalizing each other and decisions are made in a cohesive and non-siloed way.
TC: The industry and technology are maturing in this challenging economy. How does that change DSO? Do you have any examples of how brands have navigated the current times with their digital shelf strategy?
MC: DSO provides visibility into both online and in-store activities. Utilizing cross-category information can help brands better understand their category in difficult times. Brands can identify key drivers of growth within their category and assess their assortment compared to the category as a whole and to their competitors. Brands can also look at price changes across brands and labels. In the dairy category, for example, own label products increased in cost by a higher percentage than branded products. Managing out-of-stock situations is another important area, where brands can analyze their price and promotion strategy in relation to product availability and see if promotions are causing further out-of-stock situations. Gaining insights on those will allow you to have informed conversations with retailers.
TC: Can you give us a rundown of all the things that a brand should be tracking when they launch a new product?
MC: I always advise brands to prioritize their digital presence. There are three phases to consider: pre-launch, early days of launch, and post-launch.
Before launching a new product, think about key elements like using shopper language in your product name and ensuring your brand hierarchy naming for ecommerce. Consider where your product will be placed on shelves, if possible, to optimize search results. Ensure you have hero imagery in place and that all necessary product information is visible at first glance. Have a promo laydown plan across each of the retailers. During the early days of launch, keep a close eye on early reviews, compliance with your promo plan, and correct assortment and product data. Post-launch, monitor changes in share of search and long-term ratings and reviews to identify any packaging or product issues and address them accordingly.
TC: What is just one piece of advice on DSO that you would leave brands with if they needed to take action today?
MC: I would say that the key theme here is “action.” It’s important to use all available data to understand the situation and implement actions accordingly. We often emphasize progress over perfection. Getting analysis paralysis can hinder progress. Additionally, it’s important to not only focus on your own scores, but also keep an eye on your competitors and the broader category trends. Look for insights both within and outside the category to inform your actions.
Want to learn more? Watch the full webinar at: https://blogs.commerceiq.ai/conversations-on-rem-with-mandy-critchley