The E-Tailing Group’s 8th annual mystery shopping study shows that online buyers continue to ramp up their expectations for the features and functionality of online retailers.

As best-in-class merchants raise the bar, keeping up with requisite functionality will be just the beginning. More differentiation and creative execution of merchandising, both onsite and via e-mail will be the next initiatives to require resource commitments.

What is Emerchandising?

Before we talk about emerchandising, let’s define online merchandising as a baseline. Online merchandising is the process and strategy of choosing which products to promote and displaying them in a way that will increase the chances that a visitor will make a purchase.

The campaign-based approach works well for home page and high level landing pages, but it’s relatively ineffective within search results because the campaign is tied to the customer profile, not customer behavior.

That’s where emerchandising comes into play for it adds the important element of context to the experience. Contextual merchandising involves dynamically targeting and changing promotions, product recommendations and even navigation based on the real time shopping behavior of each individual visitor.

To take it a step further, the right emerchandising tools enable web merchandisers and marketers to leverage proven machine learning technology to deliver product recommendations that are insightful, intelligent and contextually relevant. Emerchandising is more than the process of choosing which products to feature and promote—it’s an approach that optimizes the entire online shopping experience by creating a balance between the psychology of the shopper and the technology required to deliver a relevant and personalized experience.

When combined with the right tools, a well implemented emerchandising strategy can increase conversion, average order value and customer satisfaction.

How does emerchandising fit into your business plan? Have you implemented tools to maximize your site’s functionality? What are some of the questions or tips you have from your emerchandising experience?