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Selling the Right Products is Vital for Online Success

Press Release

By: Zendor
28 February 2005

Selecting the right product range for an online proposition is a skill that many retailers have yet to fully master and understand. It is all too common for retailers new in Internet retailing to replicate their high street range on the web. However, those with experience and expertise in multi-channel retailing will know that what sells well in-store will not necessarily enjoy the same success online.

Zendor, the Manchester-based fulfilment specialist, understands the significance of identifying the most appropriate and desirable range of products for distance selling and provides the following step-by-step advice for retailers who are considering moving their proposition online:

• Determine online proposition - The key starting point is for the retailer to determine WHY they are moving online as this will impact the range selection. Is it to emulate the in-store proposition or to provide a range extension (perhaps driven by limited floor space in-store)?
• Identify customer behaviour - The retailer’s proposition needs to take into account customer behaviour and purchasing patterns as well as customer expectations of the new website. For instance, will customers want to buy FMCGs online? If the answer is ‘probably not’, the retailer may choose to exclude these from the online range or alternately, may decide to include them low down the navigational tree.
• Decide pricing architecture - Average selling price of items for the online range needs to be decided. This should take into account the overheads of running a distance shopping business, from website maintenance costs through to warehousing, pick, packing and delivery costs. As low value items will not help the retailer achieve a profit, it is wise not to include many of these in the range!
• Use low value items as ‘add-ons’ - If low value items are included in the online range, they need to be used strategically as an ‘add-on’ in order to drive up average order values. For example, low value belts and handbags should be upsold by linking and cross-selling with higher priced items such as matching trousers, tops and shoes.
• Make range selections to maximise cross-sell and up-sell opportunities - Retailers should select items that are versatile enough to be used for cross-selling and/or up-selling, thereby helping to drive average order values. For instance, trousers can be placed next to matching shirts and jackets on the website to maximise sales opportunities, and to facilitate navigation and ordering.
• Move away from low margin products - It is advisable to avoid low margin products in the range because the distance shopping overheads will eat-up the profits.
• Assess whether winning lines in-store will work online - As a rule, winning product lines and ‘best-sellers’ in-store are likely to also prove a success online. However, this is not always the case and so the retailer needs to assess each product for its suitability online (based upon the aforementioned criteria).
• Ensure products are suitable for home delivery - Some products are intrinsically unsuitable for home delivery, such as fragile glassware, liquids etc. If such products are included as part of the online range, they are likely to get damaged in transit, increasing the number of returned products (and hence overall costs).

By following the above process, from clarifying online proposition, to ensuring the products are able to travel ‘in one piece’ via the distance shopping network, retailers will be able to identify the most suitable range to sell online. By considering the online product range and proposition carefully, the retailer is in a better position to maximise response rates and profitability, and consequently generate a greater return on investment.