Monetizing Every Square Inch of Virtual Shelf Space

Retailers are making their lists and checking them twice in anticipation of the upcoming holiday season. With 59% of American consumers planning to do their shopping online this year (compared to 42% in 2008)*, it's critical that retailers optimize their sites to take advantage of this traffic and positively impact their bottom line.

One easy-to-implement method is an online merchandising strategy designed to help retailers monetize every square inch of virtual shelf space, just like they do in store. In-store merchandising - interactive kiosks, end-caps, shelf-level displays - represents a $45 billion industry, fueled largely by manufacturers seeking the kind of prime placement and point-of-decision position required to engage consumers and boost sales. To date, the e-commerce equivalent has been limited, not by interest from the manufacturers, but from the level of investment required of the retailers carrying their products, and the availability of simple and smart services.

Searchandising: The low-risk holiday helper
Manufacturer-sponsored displays are an integral part of the retailer/manufacturer partnership in the brick-and-mortar world - especially during the holidays. These displays are a lucrative revenue channel for retailers, and an unparalleled branding platform for manufacturers. Think about walking through a large retail store during the holidays. There are sponsored shelf-level displays promoting distinct products, sponsored end-caps, interactive displays and promotional kiosks. What do these all have in common?

Manufacturers are paying the retailer for premium placement in order to seize consumer attention and to sell more products. Why aren't you offering the same exposure on your Web site?

One easy way to approach this project for the holidays is through site search-triggered merchandising, often called "searchandising." Many retailers do this in the guise of up-sells, cross-sells and best sellers. For example, a search for "laptop" yields all matching product results and triggers callout promotions to the right of the results list highlighting laptops with the highest conversion rates, a high-end Macbook Pro, and an appropriate laptop bag. A number of retailers have taken this approach a step further, introducing manufacturer-specific branded "merchandising zones" typically in the form of banners, custom editorial and creative, or even, in some cases, branded landing pages. And translating such search and browse triggered merchandising into supplier-sponsored revenue is a concept that hasn't gone unnoticed, though early examples typically revolve around searches for brand-specific keywords like Sony or iPod.

There are largely untapped ways to exploit these exact capabilities to monetize far more than just brand names. Retailers could merchandise the entire site search experience -searches for categories, types of products, and even desirable product attributes or characteristics. Done correctly and with full merchandiser control, this creates a vast inventory of virtual end-caps, boutiques and shelf-level displays that fit seamlessly into a retailer's well crafted and differentiated customer experience - benefitting manufacturers, retailers and customers alike.

Here are just a few ideas on creating a new revenue stream this holiday season by applying cost-per-click searchandising strategies to your online storefront:

Gift Ideas: Offer sponsored boxes that highlight products that make great holiday gifts when a shopper searches for a type of product, such as a GPS navigation system or an iPod

Site-side Search Bidding: Enable manufacturers to bid for premium placement in search results in order to get their products where consumers are clicking most

Limited Time Offers: Create a sense of urgency by enabling manufacturers to run limited time offers on search results pages

- Branded Displays and Boutiques: Create a brand-sponsored merchandising zone, giving brand marketers greater opportunities for elevating their brand and promoting relevant products

When making your list this year, think of innovative ways to create new, incremental revenue streams. By taking a closer look at your site, you will quickly realize all of the untapped real estate that could be generating incremental revenue in a matter of days.

Determine which products you'll be heavily promoting this year and offer your manufacturer partners premium placement for those products on a pay-per-click basis. Not only is this an economical option for the brands since it is pay-for-performance advertising campaign, but it also puts their products in front of shoppers while they are in the buying mindset, increasing your revenue potential by improving (paid) click-throughs and conversions.

John Federman is president and CEO of Searchandise Commerce. For more information, visit
This ad will auto-close in 10 seconds