Digital channels pose unique merchandising challenges Learn how merchandising for existing and emerging digital channels differs from traditional catalog merchandising. Larry Shaw the Catalog University Dean of Merchandising explains how to leverage the advantages of online selling with merchandise that is best suited to succeed online. Larry is a keen observer of our industry - and his insights are amazingly helpful for B2B and well as B2C direct marketers as he shares how he approaches online merchandise differently. Catalog merchandising versus digital merchandising First Larry reviews the key factors for successful merchandising for digital channels. He explains the differences between catalog and digital from cycle times, and assortments, through visibility, audience, and customer interaction. His insight into how each difference can be an advantage is very interesting. New item introduction cycles One of the biggest differences in online merchandising is the introduction cycle for new products. New products are one of the most important factors for online success. Larry discusses when and how often to introduce new items. This is significantly different from the traditional offline product introduction cycle. Show me Demonstration matters much more online and videos can increase sales by 2x. Larry shares insight on what you need to factor in to be successful, from production considerations to branding considerations. What products work best on the tiny screen? What you can do to overcome the tiny selling space of mobile? Retargeting, Facebook ads, display ads, mobile offers etc all favor products that are a quick read at a small size. Understanding what you can control and what you can't, is a big part of finding the right merchandise fit. Larry also shares what mobile does well and what it doesn't. Pinterest and Instagram Visual selling is changing the way customers are introduced to new products. Themes and collections being pinned and shared by millions of online users are providing new analytics that can be used by merchants. Larry discusses how these new media channels should be part of the product consideration. Organizing Product by customer mindset Different customers, different viewpoints, different personal passions are all part of what makes online merchandising so different from catalog merchandising. Larry explains why thinking through what excites customers and the differences between older and younger customers will stimulate browsing and discovery. Tapping into customer's passion and figuring out what motivates them is the first step to understanding how to engage them. Larry provides some interesting examples and useful insights. Price Competitive Always the hardest question to answer, do we need to be price competitive? Larry shares what you need to understand to succeed from a merchandising standpoint. He discusses assortment levels, value and his secret to success (hint: it is

1. Successful Merchandising for
Digital Channels
Catalog University Pub Talk
Larry Shaw, Dean of Merchandising
June 3, 2015

2. Who Am I
Dean of Merchandising at Catalog University
Founder and CEO of Merch Success, a full-service merchandise solutions company for
retail, catalog, and e-commerce companies
Merchandise strategic planning and analysis, and finding, developing, and curating new unique
and interesting products for catalog, retail, e-commerce companies
25 years executive merchandising and marketing positions at leading companies,
including Southern Season, The Vermont Country Store, and Nordstrom

3. What Will Be Covered
Differences Between Catalog Merchandising and Digital Merchandising
Key Factors for Successful Digital Products
Questions and Answers

4. Catalog vs Digital Merchandising
Catalog
• Products part of assortment
• Long time to market
• Long selling cycle
• 100% of product sell visible
• Older audience
• Smaller number of items
• More Triples and Home Runs
Digital
• Each product is stand-alone offer
• Quick time to market
• Short selling cycle
• Only partial product sell visible most times
• Younger audience
• Larger number of items
• More Singles and Doubles

5. The Most Critical
Product Elements
1. Product “Thumbnail”
2. Product Name
3. Price
4. Customer Reviews
5. Data Tags

6. Continuous New Item Introductions
• New products #1 reason for digital repeat visits
• The top source of Ecommerce, E-mail and Social content
• Speed to market is the new currency
• Products have more competition quicker with shorter life spans
• Cycles need to be Daily or Weekly, not Seasonally
• Correlated with customer age, as younger = quicker
• Need on-line production cycles and processes, not catalog

7. Demonstrate Products
• Digital is visual media
• Younger audiences are “Missouri” – show me
• Video and audio, product details, in use, diagrams
• Can raise sales by 2x or more
• Need own production process with different expertise
• Interesting & effective more important than production quality
• Need a brand Point of View/Editorial Style
• Post on own website and 3rd party sites like YouTube

8. Account for Small Pixel Size
• New marketing vehicles and access methods have tiny “selling” space
• Re-targeting, Facebook ads, display ads, mobile offers
• Have to convey what item is, or intrigue, in just small image, maybe a headline or price
• Driver is click, not buy
• Intrigue people to find out more details
• Don’t have real control over where/when show up

9. Pinterest and Instagram
• Increasing amount of digital exploration happening visually
• Becoming key way younger generations discover brands
• Great way to test products and concepts and get feedback
• Organize by themes, collection, and how people think
• Supported by data tags and analytics

10. Customer Mindset Organization
• Primary entry and launch page is still Home Page
• No longer about just Product Category
• Age driven: Older = Traditional Structure Younger = Explore
• Organize by how customers think and shop, not internal structure
• Collections and Themes, What Other People are Wishing For, Top Rated, Newly Arrived
• Two main benefits
• Help customer find item they are interested in quicker
• Stimulate browsing and discovery

11. Price Competitive
• Assortment level, not just individual items
• Strongly impacts overall brand perception
• Drive product choices, as all items go on-line
• Competitive = mode, not lowest
• value that appears most often in a set of data
• Need an overall Price Competitive Strategy
• Match MSRP, at price vendor selling at, at mode, no more than 10% higher than lowest, ….
• Item price more important than shipping cost
• But both are looked at
• Transform items through unique product names and images

12. Questions and Answers

13. Key Info
Contact me with feedback or questions
larry@merchsuccess.com
802.379.5802
Sign Up for Classes at Cat U: http://cataloguniversity.com