ETrade International Conference 2010 paper

1. IX International conference E-trade 2010 Serbia, Palic, April, 21.- 23. 2010.
Abstract — This paper explains how to implement
traditional stores experience in online stores. Using traditional
techniques in online stores can increase sales. There is shown
how products in an online store can be displayed more
efficiently, how to create a sales process more comfortable to
customers, and easiest to shop managers.
Keywords — online shops, visual merchandising
I. INTRODUCTION
FTER fifteen years of the Internet, the term „virtual“
is commonly used for all that happens online. People
today think that „virtual“ is not „real“ and that rules from
real life are not applicable in a virtual environment. For
preventing semantic misunderstanding in this paper instead
word „virtual“ we will use „online“ and instead „real“ or
„traditional“ we will use the word „offline“ to mark
differences.
In this paper, I will explain the similarity between offline
and online shops, why I called online shops „avatar“ shops,
or alter ego of offline shops, and why online shops should
use proven techniques from offline shops. (Alter ego is:
„another me", „second self“; the person who is very close
by the mindset and emotional expressions, soulmate, and
that we perceive it as our "second self".)
II. OFFLINE AND ONLINE WORLD
The offline and online worlds are in most cases
inextricably linked. In trade, in particular, people always
gathered somewhere to trade. In the beginning, it was a
square, a wall, then markets, shops, stock exchanges, fairs,
fairs, and today the internet.
Every new space for trade brought new opportunities,
new skills, but they are only upgraded to previous
experience. Knowing the experience of the previous market
space is an advantage in the new space.
There are several key differences between offline and
online stores.
Profitability is the primary advantage of an online store.
The costs of the online store are lower than the costs of
the offline store, for the goods to be presented in the online
store, it is not necessary to physically own them. In some
cases, online stores can multiply one product into an
unlimited number of copies, depending on demand, without
physical properties - the product can be completely
electronic. This product can be distributed instantly to any
location on Earth.
The main disadvantage of online stores is that the ability
to animate all the senses of customers is limited or
impossible: the sense of smell and touch can not be used to
encourage shopping and the customer cannot touch the
product or try it (when it comes to physical products).
However, the connection between online and offline stores
is also reflected in customer reactions. Namely, research
shows that a good online store can increase sales in offline
stores and vice versa. According to Jupiter's research, as
many as 70% of online shoppers spent less money in
offline stores after a bad experience with the seller's
website.
III. PRODUCT MERCHANDISING
Today, large stores sell tens of thousands to several
million items. All of them are classified into certain
categories for ease of reference.
Within trade management, category management
manages product categories to maximize sales. It represents
the link between marketing, sales, procurement, and
logistics.
These steps briefly look like following:
• Marketing explores needs and segments the market
• Sales determine quantities
• Procurement orders the required quantities of goods
• Logistics decides how much bandwidth is and how
much goods can be bought concerning finances
• All this is classified in the warehouse by the FIFO
method and divided into categories, for more
efficient delivery
Within the sales area, the goods are exposed according to
the rules of the management category, so that they
intuitively lead the consumer to the fulfillment of his needs,
ie to the purchase of what he needs. Very often, with a good
presentation of the product, the customer is told to buy the
following feelings and not logic and reason.
The marketing discipline of distributing goods within the
sales area is based on the principles of category
management and this discipline is called visual
merchandising.
Category management is, therefore, a method or business
practice that procurement decisions are made by keeping in
Avatar shops - how to implement traditional
stores experience in online stores
Saša Jovanović
A

2. mind all the items that solve a problem, ie meet a consumer
need.
Figure 1. Factors of successful visual merchandising
It is important to note that this grouping within the
category is subject to certain laws.
The following elements should be noted:
• Store design - create a store according to your target
group
• Plan-o-gram online store - Arrangement of goods
within stores and on the sides
• The way the promoted products is presented
• Manner of displaying POS materials
• Manner of displaying impulsive buying products
• Displaying of related products
• Originality
IV. ONLINE VISUAL MERCHANDISING
A. Visual merchandising
Merchandising in the narrower sense of the word is sales
promotion, and includes all activities in the sales area
related to the goods themselves, such as positioning and
display of goods, promotional activities within the sales
area, and the like. Over time, the concept has transformed
and no longer means just the aesthetic arrangement of the
shelf. Today, merchandising means the practice or policy of
assortment, prices, exhibitions, and promotions within the
sales area.
Such a change has occurred because the habits of
customers have also changed. Today's customer makes
more decisions within the store than was the case in the past.
The possibility of choice is significantly increased and with
it the pressure in terms of communication with the
consumer. Customers themselves are less loyal to brands
and are willing to change the brand if they come across an
attractive promotional offer that doesn’t even include the
brand they typically purchase. And finally, customers are
buying much more often today.
In such circumstances, merchandising is finding a way to
draw the customer's attention to a product.
B. How Customers Shop Online
Most Internet shoppers spend a lot of time finding a
particular product. At the same time, they often just look
around, like walking through a classic, offline store, and
only briefly notice the products in front of them.
Precisely because they do not have a specific product in
mind, visual merchandising techniques should enable them
to meet their needs.
C. Grouping products
The grouping of products is done by, for example,
including in the category all products that fall into the
domain of hair care (shampoos, conditioners, dyes, etc.).
Thus grouped, they are offered to customers to increase
their overall attractiveness.
The grouped products, further, should be arranged in
some logical order: by price or by some important
characteristic or way of use. Changes in the logic of product
grouping should always be monitored in the function of
changing the effects or changes in revenue caused by the
change.
V. ONLINE VISUAL MERCHANDISING TECHNIQUES
A. Grouping Products According to the Target Group
A good example of this practice is The Sharper Image. On
this site, products that are in trend are highlighted with
large images, while other products are grouped on the
pages. The products themselves are presented with quality
pictures, video presentations, and customer comments.
On the title page, the categories are divided into:
• for him
• for her
• for children
• popular (hot) products
• new products
• by the part of the house where they are used (by
room of the house)
• by price
• and finally, a special category that accompanies a
particular holiday
There is also a division into:
• electronics
• Best gifts
• personal care and health products
• for the house (repeated category "by room of the
house")
• travel / car
• toys and rest
It can be noticed that the products are grouped by
purpose, having in mind the target groups and market
segments.

3. This grouping of products according to the target group
or purpose has been known in traditional stores for a long
time (eg department stores, clothing stores, etc.).
The categories presented in the menu in the online store
are equivalent to different and separate parts of the sales
space in the offline store.
B. Product Collections
Merchandising involves more than just grouping by
product category. It also includes providing comprehensive
product information and creating product groups that can be
used together.
Instead of selling individual products to the customer,
grouping them by categories that describe the types of
products, you should look into the needs of customers. By
grouping products from diverse categories so that in one
place the customer can choose several products that
together form a whole and meet some of his needs,
additional purchases are encouraged.
The J. Crew Web is a great example of this practice. The
products are grouped so that customers are offered one
product and others related to the collection. Of course, not
every customer will buy all the products but when they are
shown together they can be motivated to buy more than one
product.
When creating lifestyle categories, the customer should be
presented with a sense of pleasure in owning the product
and identifying with the models in the picture. This
presentation of products should use images of people in
various everyday or special situations in which they use
products from a certain lifestyle category.
C. Related Products
Very often some products are related. The buyer, of
course, does not always know in advance. For example, if a
customer buys an electrical device, the batteries usually do
not go with the device. If he is not informed about it on the
website and he is not offered to buy batteries, he will make
that additional purchase with the competition.
Everything that the buyer buys from the competition and
does not buy when buying the basic product is a direct loss.
Therefore, it is necessary to always be well acquainted
with the product being sold and in the process of purchase
to offer the customer additional products that form a whole
with the selected one during the purchase process.
D. Product Description
In online stores, the customer can not touch the product.
Therefore, just one image of the product is not enough. The
product should be described in detail in pictures and text.
More photos from different angles should be offered.
Whenever possible, a video or 3D presentation of the
product should be posted. Depending on the type of
product, panoramic shots or virtual tours of the product
should be used.
The description of the use of the product should be
detailed and contain as much information as possible about
the product, the way it is used, for whom it is intended, etc.
and all this together is a significant incentive to make a
purchase decision.
E. Shipping Terms
Usually, online stores define a minimum order value for
the free delivery of goods to the customer's address. In
contrast, most offline stores do not have this limit.
The price of delivery should be calculated and shown to
the buyer, and that is better than limiting the minimum
amount of purchase for which the product is delivered.
F. Promotions
Products on sale promotions should be highlighted as in
offline stores:
• In the most frequent places (title page, category title
page, payment pages)
• Original - always find a new and more innovative
way to present products on sale. In offline stores for
this purpose, products are placed on piles of
different shapes that are accompanied by billboards
and additional information.
It is important to remember that promotional sales are not
discount sales or clearance sales. Actions are aimed at
promoting a product or brand and increasing its sales. The
sales, however, aim to eliminate any backlog or seasonal
product from sale.
G. Sellers in online stores
In offline stores, the role of the salesperson is important.
Depending on the type of store, whether it is specialized or
not, the role of the salesperson differs. But it is always
advisory and focused on helping the customer choose the
appropriate product for himself.
Figure 2. Ikea Anna - an example of a salesperson's avatar
in an online retail space
Although the online store does not have a physical space
where goods are bought, and thus the seller in human
form, it is possible to apply the experience of offline
stores, which shows that an experienced seller who knows
how to recognize customer needs can lead him to buy.
In online stores, for example, avatars are used as a way of
interacting with consumers. Such avatars are often called
"bots". One of the most famous is Ike’s Anna, which is
designed to guide consumers through Ikea’s website.

4. By typing in the chat window, Anna automatically gives
the answer that accompanies the change of the page on the
IKEA site. For example, if you type the name of a product
with Anne's answer, a page with that product or product line
will be loaded immediately.
Online support is also one of the techniques that can
improve online sales. Be prepared to respond to a potential
customer's online inquiry at any time.
H. Summary of the online store selling techniques
Lifestyle photos.
Show how people enjoy using products.
Detailed product description.
Post a detailed description of the product, describe how the
product is used.
Use more photos.
Show products from several angles, as well as how the
product is used.
Product collections
Group several products into collections that can be used
together to create a complete solution for customer needs.
Related products
Some products are not complete for use. The customer
should always be offered a complete solution for his
needs.
Customer support
Whether using a seller's avatar, online support, or
discussion forms, allow customers to ask a question and
get an answer.
VI. CONCLUSION
Consumers are always looking for ways to make their
shopping more convenient and enjoyable. Applying some
traditional merchandising techniques to online stores helps
the consumer to more comfortably engage in online
shopping, which increases revenue and long-term loyalty.
Contrary to popular belief, the look of the online store
and especially the product layout should not be created by
designers. Also, leaving that job to developers will not give
the expected results.
A store is a strategic place of the trading business and this
business must be approached respecting the principles of
category management.
In this way, the monetization of the point of sale will be
maximized, and thus the profit and ROI, and shorting
turnover time.
ABSTRACT
This paper explains how to implement traditional
stores experience in online stores. Using traditional
techniques in online stores can increase sales. There is
shown how products in an online store can be displayed
more efficiently, how to create a sales process more
comfortable to customers, and easiest to shop managers.
Title of the Paper in English:
Avatar shops - how to implement traditional stores
experience in online stores
Keywords:
online shops, visual merchandising
Name of author:
Sasa Jovanovic