What is digital shelf optimization?

Learn the basics of digital shelf optimization, why it’s critical for CPGs to master it and how digital shelf analytics can help you drive ecommerce growth.

This post has been updated and was originally published March 2020.

Digital shelf optimization refers to the continual process of perfecting your digital shelf. The result is a digital shelf that’s more prominent across e-retailers and so more efficient at grabbing shoppers’ attention. But let’s go back a step: Do you actually know what it means and how it’s done?

In this article we’ll cover:

• What is digital shelf optimization?
• How digital shelf optimization works
• How to get started with digital shelf optimization

 

Brands have started taking ecommerce seriously. The forecasted growth rate by 2023 is 34.5%, showing the enormity of online shopping. To carry out digital shelf optimization, you need to understand the concept of a digital shelf, the importance of online merchandising and how to develop a sound digital shelf strategy.

Defining digital shelf optimization

Digital shelf optimization (DSO) is the process of ensuring your products are optimised for search –– as well as for the shopper.

DSO spans the optimization of your brand’s products for the digital shelf on e-retailers such as online grocery stores, consumer electronics, fashion, pet care and ecommerce platforms like Amazon.

Many people pigeonhole their view of the digital shelf, narrowing their focus to a branded website or a singular product page. In reality, a digital shelf spans much further than this, making optimization a huge –– but important –– task. Aside from your brand’s website, the digital shelf expands to mobile applications, third-party platforms and anywhere else your brand product is featured.

In essence, a digital shelf is your product’s online footprint.

Importantly, the most influential parts of your digital shelf are likely separate from your branded site, instead in third-party platforms where customers can benefit from an aggregated shopping basket, loyalty schemes and unparalleled delivery times. With this in mind, DSO extends far beyond the pages that you control, reaching category pages, curated product pages and third-party bestseller lists.

Although all of this can make DSO seem like a daunting task, it’s one that’s important. As with a physical shelf, buyers spend much of their time here researching, browsing and ultimately purchasing –– either offline or online. Research shows that 84% of smartphone shoppers turn to their mobile phone to help them shop while in a store, proving that DSO can help to increase offline sales as well as online sales.

Indeed, DSO should be at the core of your ecommerce strategy. According to Matthew Rivard, Head of Strategy & Product Acceleration at Google:

“A prominent place on the digital shelf can help brands reach a vast, interested audience and can mean big opportunities for growth in both sales and overall brand awareness.”

How digital shelf optimisation works

Digital shelf optimization focuses on making product range improvements at the individual product level post-launch.

The idea is to give equal time and attention to product optimization, as you would development, in a bid to keep up with constant retailer or category changes. To do this, you’ll need to continually revise product content in line with trends, competitors and platform updates. An example of this is updating your product listings to include rich advanced content such as immersive, 360-degree videos –– a key trend for 2020. We call this process online merchandising.

Brands have less control over how a product is perceived in ecommerce than they do in a brick-and-mortar store. For example, in a physical store, brands can manipulate product groupings, strategic product placement, signage and packaging. Through digital shelf analytics brands can take back control and work with their retailer partners and internal teams to optimise digital shelf visibility.

Online, the only real option to create brand consistency and buyer desire is through product content. This content includes:

• Product options
• Images
• Videos
• Product descriptions
• Instructions
• Pricing
• Customer ratings
• Customer reviews
• Awards and certifications

 

DSO also ensures that your products are compliant with industry and platform regulations, as well as being consistent in terms of your individual brand’s messaging and product compliance.

To pick out compliance discrepancies and spot overriding opportunities, you’ll need to use data. This is where terms like Amazon SEO come in to play.

The aim of DSO is to ultimately increase the traffic to your product pages, by enhancing the quality of your product content. In turn, your product pages are more likely to reach new heights in search.

While you can increase traffic in a variety of ways – including retailer display advertising –– organic on-site search is possibly the most important tool, allowing you to naturally sit at the top of your chosen category on a retailer’s site.

Why is it so important to appear high in search?

When it comes to ecommerce shopping, most buyers use direct search by typing in a product category, name or characteristic. Just as a searcher requests information on a search engine like Google, this process is often mirrored across e-retailers. Buyers tend to navigate websites by searching for products or categories in a search bar, or otherwise using search filters to refine the products they see. For this reason, driving product visibility in search is crucial to sales success.

Even if a buyer is just browsing without an intent to search for a specific item, 45% of shoppers don’t typically scroll past page two of results. Needless to say, if you don’t make it onto the bestseller lists that take the majority of the traffic, you’ll find it very hard to make progress online.

What’s more, platform algorithms value the same trending products, as they continue to suggest bestsellers or platform-approved items. User-friendly features also make it easy for buyers to become creatures of habit, making repeat purchases direct from their order history and favourites list. Amazon is a great example of this with their subscribe and save incentive. Shoppers receive a discount when they subscribe to repeat purchases of certain items. This incentive helps shoppers to become repeat buyers and in turn, makes them incredibly loyal to the brand in question, decreasing the chances of a shopper switching to a competitor product.

Also important is the content users see when landing on a product page. Having an abundance of accurate information and imagery helps to increase sales and lower the return rate, as detailed information helps to maintain expectations.

User-generated information can also help to influence sales, such as customer reviews. Positive feedback helps to validate a purchase, explaining why 67% of consumers see them as an important buying factor. In this respect, the digital shelf allows brands to better display brand equity, with the showing of ratings and reviews.

To be able to act on these opportunities brands should be aware of the content options available to them across their online retailers. Taking advantage of the content options can support shopper purchase behaviour and deliver a great customer buying experience.

Yet the general consensus is that controlling a digital shelf is more difficult than a physical shelf. This is a space where expectations are ever-changing, where consumers can’t readily interact with products and where products are spread across multiple e-retailers, with different requirements and ways of working. A product information Management (PIM) system can help brands get the data in quickly and efficiently across multiple online retailers, however, such systems typically lack the ability to measure the real world output and retailer adherence.

For this reason, performing DSO requires ready-to-use digital shelf analytics that simplify and objectify the process. Having a streamlined, data-driven approach helps you to perform DSO effectively, as well as making it easier to cross-communicate with other teams.

How to get started with digital shelf optimization

Since digital shelf optimization requires data-driven decision-making focused on the user’s ecommerce experience, a common option is to invest in automated digital shelf software that allows you to access real-time analytics. Why is this?

• An actionable stream of accurate data helps you to manage and drive category change faster than your competitors, whether that’s monitoring price and promotion data or a shift in shopper behaviour.
• A digital shelf analytics provider will save you a lot of time otherwise spent manually collecting data and compiling it into a spreadsheet. Manual data sourcing across hundreds of products in multiple retailers is not scalable and results in wasted time for ecommerce teams. Ultimately meaning missed opportunities to drive growth.
• Any digital shelf strategy will require the input of various teams, making it important that data-sets can be effortlessly exported and sent to individuals, aiding cross-communication.

 

Automating data gives you the power to react quickly to category changes. In doing this, you’ll increase brand engagement, brand loyalty, sales and profitability by giving customers what they want in real-time. But more importantly, being responsive to the market helps you to retain all-important market share, by solidifying your position in search and maintaining your relationship with a platform’s algorithm. Rather than being blinded by familiar metrics like YOY sales, retail analytics help you to see the wider category picture, ensuring sustained growth for years to come.

Our expert customer success team can help you to take care of your digital shelf strategy, by working with you to build out roadmaps for ecommerce capability or NPD launches. Our experts help you identify the opportunities across the omnichannel to drive growth. Crucially, it is a partnership that ensures the digital shelf data in our service is matched to the commercial objectives you have.

Matching human help with digital shelf data ensures you keep autonomy over the numbers and helps to contextualise the reams of data collected. With this blend of automation and consultancy, e.fundamentals has built an easy-to-use platform that shows all of the key metrics you need, including range and availability as well as pricing and promotion data all in a language easily understood by sales and marketing teams.