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Topics Digital Shelf
Demystifying the Digital Shelf

Here at Profitero, we use the term “digital shelf” frequently to describe what we do and why we do it. However, digital shelf is much more than a buzzword, it is an important concept to understand in the world of eCommerce. Brands spend around $500 billion per year for physical retail shelf space, when in reality, consumers increasingly are choosing to shop online on the digital shelf instead. What’s more, 78% of consumers turn to online shopping channels even before entering a brick-and-mortar store.

Therefore, having a strong grasp of what the digital shelf is and how to command it could be the difference between a brand that sinks or swims online.

Contents:

What is the digital shelf?

The digital shelf is how and where a brand’s product is displayed online, whether on a product description page on a retailer’s site, third-party marketplace, mobile app, personal website or any other eCommerce channel. This is where digital consumers go to browse, discover and purchase products, similar to a physical retail shelf.

For most retailers, the primary digital shelf is the search results page. This is where the majority of consumers look for items to purchase after inputting their direct inquiries into a search bar or filtering product choices based on their individual requirements. Other examples of digital shelves are category pages, curated product lists and new product release email campaigns.

Just as with the physical shelf in brick-and-mortar, the digital shelf is where brands can control the appearance and story of their items online. But instead of strategic product placement, aisle endcap groupings or flashy packaging, brands must rely almost entirely on product content. Some of the content elements that are required for the digital shelf include product variation options, images, videos, descriptions, instructions, pricing, and ratings and reviews. When put together, these elements are displayed on retailer websites to help consumers make informed purchasing decisions online.

Physical shelf versus digital shelf

Why is the digital shelf so important?

The digital shelf is an important concept for brands to grasp as it can directly impact sales, profitability and brand reputation. For example: 

Additionally, more consumers are turning to the digital shelf to conduct research before making a purchase in-store. In fact, digital retail channels and product content influence more than half of all retail sales. Therefore, strengthening your online performance can have a direct impact on a shopper’s overall retail experience.

Why do you need a digital shelf strategy?

Understanding the digital shelf can make or break a brand’s ability to succeed online. Developing a strong digital shelf strategy can lead to optimized product content, improved search placement, increased product page traffic and higher conversion (i.e., sales).

At a company level, the digital shelf impacts an entire brand’s ecosystem, from eCommerce, revenue/finance, consumer relations and account managers to marketing, research and development, supply chain, and merchandising experts. Therefore, developing a cohesive strategy will ensure that all moving pieces work successfully together.

Components of a digital shelf strategy

1. Digital shelf planning: The first step in building a digital shelf strategy is setting organizational goals. Goals can either be hard (i.e., based on sales, profitability or market share growth) or soft (i.e., based on brand reputation, customer satisfaction or brand awareness). Then, the entire strategy should be tailored to these goals. For example, brands that prioritize sales as a goal may be highly focused on optimizing the digital shelf for one or two retailers most important to their business, and may aim to improve every lever available to them (search, content, availability, etc). On the other hand, brands concerned about brand reputation may focus primarily on areas like creating product content that has broad-reaching impacts across their entire retailer network as well as heavily influencing the shopper experience in-store.

2. Digital shelf prioritization: Once goals are set that identify the focus of your digital shelf strategy, it is important to prioritize which retailers, brands and products to dedicate resources to. This helps narrow down a large portfolio in order to concentrate on high performers, such as bestsellers, fast growers or new releases. In addition, you should prioritize which competitor products will be helpful to track and benchmark against.

3. Digital shelf personnel: This involves determining what roles and how many employees are necessary to execute your strategy. Generally, this includes an overall owner of the digital shelf strategy that ensures goals are being met and reports progress to senior management. Other digital shelf roles can include product content copywriters, search specialists, strategy and insights analysts, and supply chain experts. If adding resources is not possible, brands can look into outsourcing tasks to eCommerce agencies that help with digital shelf optimization.

Digital shelf personnel game plan

4. Digital shelf monitoring: After setting priorities and allocating resources, a plan needs to be set in order to measure and monitor progress against goals. This involves developing a core set of KPIs that can determine digital shelf wins and loss rates. KPIs should directly correlate to specific areas of the strategy, be monitored on a regular monthly or quarterly cadence, and highlight areas of success or improvement. The top KPIs we recommend tracking include:

Focus area

KPIs

Recommended goal

Content

Amount of content per product

No empty content fields, and content (e.g., number of images, videos, etc.) that is comparable to competitor products

Content

Number of compliant content fields

All fields compliant

Search placement

Number of products appearing on page 1 of search results for a keyword

Goals for search placement should be based on understanding your current share of search and continuously improving

Search placement

Average numerical ranking of products in a category

Goals for search placement should be based on understanding your current average search ranking and continuously improving

Pricing

MAP compliance rate

No MAP violations

Availability

Percentage of in-stock products versus listed products

All listed products should be in-stock or removed from being seen until back in stock

Reviews

Number of products with a specified review count

Appropriate amount of total reviews should be determined by benchmarking against competitor products

Ratings

Number of products with a positive, typically above 4 stars, rating

All products with a positive (ideally 4+) star rating

 

5. Digital shelf toolkit: Similar to other business processes, tools can help teams do their jobs faster and more efficiently. A few categories of tools brands should consider using with their digital shelf strategy include:

  1. Measurement and analytics – Analytics tools are all about collecting as much information about the digital shelf as possible. To break it down further, there are three equally important types of analytics.
      1. Descriptive – Displays actual data about what has happened, such as the amount of sales, published product content, inventory levels and consumer reviews.
      2. Predictive – Uses a combination of trending data, past activity and insights to determine what might happen in the future, such as predicting changes in consumer behavior and forecasting sales.
      3. Prescriptive – Defines how a brand can move forward by suggesting next action items, such as when to replenish stock or run a marketing campaign.
  2. Content management services – Content management services streamline and standardize product content across an entire portfolio. These tools can benchmark characteristics of good content, store and centrally manage all product content, syndicate to retailer websites, monitor content performance and audit for compliance.
  3. Review syndication services – Review syndication services put all consumer-generated content, like ratings and reviews, together on one platform to simplify management. These tools can set goals on ratings and reviews KPIs, facilitate review-generating campaigns, syndicate reviews across retail  channels, alert of negative sentiments and analyze results.
  4. Paid search and media – Paid search tools allow brands to optimize their products’ search placements in order to gain more consumer traffic. These tools can identify popular keywords, provide the option to sponsor keyword advertisements, maximize return on ad spend and measure placement results on sales.
  5. Distributed commerce – Distributed commerce tools help bring products to all consumers across all channels. These tools identify relevant digital touchpoints and how brands can engage each individual target audience.

6. Digital shelf optimization: After the proper processes and tools are in place, optimization of the digital shelf comes in to continuously improve. Brands must use their gathered insights to revise, update and hone in their strategy. One way to accomplish this is to benchmark product KPIs against competitor brands to make sure performance is up to par.

7. Digital shelf executive commitment: The last, but perhaps most critical, requirement is receiving executive commitment, support and funding to the digital shelf strategy. Budget will be needed for internal headcount, agency outsourcing, software tools and services, or optimization efforts, such as paid advertising campaigns and promotions. You can gain support of the executive team by proving the ROI of a digital shelf strategy, sharing information from industry experts and third-party research firms, finding case studies that demonstrate the importance of eCommerce, and creating a scorecard of how performance can be measured against goals over time.

Challenges of the digital shelf

While perfecting the digital shelf is important, just know that you will encounter some difficulties:

  • Digital shelves are not standardized across retailers. This means that product detail page setup and requirements require some level of customization for each retailer a brand partners with. This can be a large undertaking for smaller brands with limited resources.
  • Consumers are not able to physically interact with the product. This means it is crucial that all necessary information to make a purchase decision is included, such as instructions, ease of use, benefits, ingredients, nutritional facts, reviews and FAQs.
  • Requirements are rapidly evolving. Therefore, winning takes continuous effort to keep up with new retail channels, consumer behaviors and search algorithm changes.
  • Assortment can be harder to manage online than offline. When it comes to selling online, in-stock and sell-through rates can be difficult to manage as products are available across multiple retailers with multiple fulfillment models. It is important to set and sync up these processes early on.
  • Digital shelves are dynamic and constantly changing. In a 24-hour period, search placements can update hundreds of times. This makes it more difficult to manage and keep up with the trends that are necessary to win.

How can brands win on the digital shelf?

Now that you know what it is, you may be wondering how your brand can capitalize on all the digital shelf can offer. While strategies can vary among industries and retailers, in general, brands can follow these steps to improve performance.

  1. Secure the perfect placement.
    Similar to being at the eye-level of a physical retail shelf, you should place emphasis on where your products are appearing on search results pages. Items that receive the most attention online are typically near the top of page 1 in search results. Brands can accomplish this placement by purchasing headline banner advertisements, sponsoring top-ranking spots or boosting organic search. Organic search has been shown to improve when incorporating relevant keywords in the product description and including all of the necessary content components.
  2. Make your products stand out with product content.
    On the digital shelf, content is like packaging, so it needs to be attention-grabbing. A few techniques that can be used to accomplish this include:
    • Ensuring product titles have appropriate keywords, description and length.
    • Having a competitive number of high-quality images by benchmarking against other brands.
    • Personalizing product description copy and images to cater to your target audience.
    • Making use of all the product content sections each retailer allows, e.g., bullet points, videos, Q&As, etc.
    • Unifying and representing the brand voice across all owned products.
    • Optimizing content for all channels, device types and screen resolutions.
    • Using a content management system to organize and streamline content and SEO processes.
  3. Always be in stock.
    There is no point in investing in solid product content and high search placement if once a consumer finds your product, it is not available for purchase. Therefore, you should put a system in place that alerts you of low in-stock rates for all your online retailers, so that you can restock ahead of the game and not miss out on sales.
  4. Strengthen your product reviews.
    It has been proven that a high count of positive reviews can convince consumers to purchase one product over another. Therefore, you may want to consider incentivizing your customers to leave a review after a recent purchase or set up a reminder system that prompts customers to leave a review after they receive the item.
  5. Focus on your most important products first.
    This can be done by identifying items with the highest margins, growth rates, search volumes, ratings or profits. Then, put effort into making this content the strongest and consider sponsoring keywords that are most relevant for these products. Once you have your top products dominating the digital shelf, then you can move on to the rest of your portfolio, but you do not want to start by spreading your efforts too thin.
  6. Don’t be afraid to invest in help.
    From content syndication to advertisement campaign management to prescriptive analytics, there is a wide array of third-party software and tools that can be purchased to improve your digital shelf strategy. It may take a dedicated eCommerce team or a lot of resources to properly command the digital shelf across all retailers that you may not have access too, but there are plenty of external partners ready to help bridge the gaps.

 

Schedule a demo to learn how Profitero can help your brand strengthen its digital shelf presence.