5 Online Merchandising Tactics to Increase Profits This Holiday Season

There are a lot of earnings up for grabs this holiday season — up to 3.5% more, to be exact. 

According to the NRF, online holiday sales are expected to reach $297.9 billion in the US alone. This is an estimated increase of 9% in online shopping, and 3.5% overall from the previous year.  

But a successful season is about more than just sales volume. You also need to have the right holiday-season merchandising strategies in place to optimize your profits. Simply put, this holiday season is all about profit-driving merchandising — which, luckily, is something we are experts in.

Here are our top five online merchandising tactics to test for peak shopping days. And if you stay to the end, you get an exclusive download reward! 

Let’s get into it. 

1. Really Narrow the Field with Neighborhood-Level Merchandising

Even the most successful global online retailers do marketing on a regional level. This allows them to use local climates, holidays, and trends to feed their responsive product collections. However, it is by segmenting at the neighborhood level that you could really have some success. 

Let’s say you're a clothing Shopify store. During the peak shopping season, you could create promotions and marketing that speak to niche shoppers in very specific areas. In the US, for instance, you could push your eco-friendly streetwear for artsy Brooklyners living in Williamsburg, while offering personalized formal outerwear suggestions like wool coats to Gold Coast (Chicago) shoppers.

But you would first need to integrate micro-segmentation into your online merchandising strategy. This would allow you to adapt your collections to regional metrics and 1:1 personalization. 

How? 

By combining local trends with real-time data to dynamically adjust product categories, recommendations, and promotions. 

Duplicating this strategy may look a little like this: 

1. First, collecting as much regional information as possible to track events, seasonal needs, and style preferences 
2. Then creating neighborhood segments for your shoppers that additionally consider purchase behavior, trending styles, and climate 
3. Using advanced product collection practices to factor in these neighborhood trends when sorting category pages dynamically 
4. And then, finally, running geo-targeted holiday promotional ads and email marketing highlighting personalized product recommendations with localized optimization 

2. Catch Last-Minute Shoppers with Automatic Product Sorting and Real-Time Trends

Peak online holiday shopping doesn’t end until just before Christmas. Historically, the period between December 15 and 24 has accounted for approximately 40% of all Christmas sales, but in 2022 and 2023 we saw even more delayed shopping. 

According to a 2022 Google eCommerce report, shoppers in the States spent over $47 billion in retail in the two weeks after December 25 — excluding auto, grocery, and restaurants. 

Additionally, the search volume for gift-related queries, like “gifts” and “presents,” remained high well into January — with 45% of consumers saying they enjoyed shopping during the time after Christmas.

So, how can product sorting help you capitalize on this growing segment? 

First, you need to make sure you have dynamic product sorting set up in your collections. 

Then, you want to feed a number of parameters into your sorting to factor in customer behavior and product trends. It is even better if you can also account for product margins —this will mean that you're showing potential shoppers the most popular products but also the most profitable ones.

For last-minute shoppers before the big gift days, you also want to factor in shipping time and stock levels into your dynamic displays. This will then allow you to add in another level of merchandising fine-tuning — availability — to your seasonal strategies.

This is where Kimonix comes in very handy — enabling Shopify merchants to adjust product displays in real-time based on multiple parameters. 

How would this look in practice? 

Let’s say you’re an online beauty retailer; your automatic sorting strategies could prioritize high-demand beauty gift sets that offer solid margins and fast-shipping options in the weeks leading up to Christmas. Then, switching to other bundles that lean toward New Year self-care trends or promotions. 

By using these real-time trends while keeping an eye on stock levels, retailers can quickly adjust product sorting while still focusing on profit. 

3. Use Interactive Content to Match Collections to Each Holiday Shopper

We know that many holiday shoppers aren't shopping for themselves. They are often hunting for something totally out of character for them individually. This means that their behavior history may not reflect what they are searching for at that moment.

Interactive content is a great way to overcome that data hurdle without changing any of your product recommendation sorting formulas. 

For instance, you could create a holiday gift quiz that promises to help shoppers choose just the right gift for that someone. 

Not only does this help them with that age-old stress of getting the perfect gift, but it also let’s you to mine for real-time data. Data that you can use to offer product recommendations — ones that are based on what they are looking for, not what they historically have been interested in. 

To do this, you need to: 

• Plan your gift recipient categories (like, “For the Cooking Enthusiasts” or “For the Adventure Junkie”) and build product collections around each category
• Design your onsite quiz and link answer combinations to product recommendation logic using tools like Interact and Typeform
• Market your quiz onsite by putting it somewhere above the fold and in your holiday marketing campaigns 

Here’s a quick run-through on how to load quizzes to your Shopify store using Octane AI. 

Other interactive holiday-season ideas could include shareable wishlists, shoppable, holiday-themed UGC galleries, and virtual try-on tools.

4. Turn Your Online Store Chat and CRM into Virtual Personal Shoppers 

There are two reasons your store shoppers may need extra help choosing products around peak shopping days: 

• Increased shopping volume brings a lot of new shoppers who are in a hurry to buy but who don’t know your brand yet. AKA, they have a lot of questions 
• Many shoppers are buying things from other people, making it harder to know what product would be the best fit. AKA, they also have a lot of questions 

This is where your support systems and information pages come in very handy. They enable you to turn your store chat and CRM into virtual personal shoppers that help customers find exactly what they want as quickly as possible. 

Now, you don’t need a huge tech or resource outlay to achieve this. Here are some ways you can create virtual personal shoppers within your current systems in time for the holidays:

1. Set up an additional automatic chat flow to ask a few questions about the shopper's or gift recipient's wants or needs. Then, program your responses to point them to personalized product recommendations. 
2. Segment customers in your CRM tools (such as Klaviyo) based on particular past shopping interests and then email them with product recommendations that could fit under “Top Gift Picks.” But you also want to encourage engagement by saying they can reply for more shopping assistance. 
3. Offer a “Gift Concierge” type service through your chat or email, letting customers quickly reach out with questions on the best gifts for different recipients, which you can then direct to product recommendations based on various parameters — including profit margin!
4. Create “Trending Gift” product collections that sort based on 1:1 personalization as well as important marketing and retail parameters. 

This is something Sephora is an absolute genius with, their AI-powered bot, having been an early adopter. Now, their virtual assistant engages customers in real-time, asking about their preferences and needs and then suggesting suitable products, effectively emulating the experience of an in-store personal shopper.  

5. Have One Eye on Next Year with Seasonal Retention Strategies

To increase sales and profit, you should not be focused solely on peak holiday shopping volume. 

Rather, you want to build on the momentum (of the increased traffic and additional shoppers) to also improve your customer retention and loyalty. This means including retention goals into your holiday merchandising plans. 

How? 

When you consider that Google saw a massive jump in reward program searchers, this is a good place to start. 

You want to ask your holiday shoppers to join your loyalty programs while they are buying from you. But be sure you offer an incentive. One idea would be to offer exclusive access to upcoming seasonal products. Or, you could offer double points to all your holiday shoppers. 

But it doesn’t have to stop with loyalty programs. 

Here are a few more ideas to boost retention and loyalty with your seasonal merchandising strategies: 

• Follow up with all your holiday shoppers post-purchase to “check in” on whether they need product help or suggestions for complementary items
• Email holiday shoppers in January with 1:1 personalized product recommendations for New Year promotions
• Offer surprise extras such as complimentary gift wrapping or product story inserts to add extra value to every sale
• Reward existing loyalty program members with an extended holiday return window for select merchandise to foster trust and appreciation
• Run (and promote in your product pages) a referral bonus program from January, where December shoppers can earn rewards for referrals to your store, redeemable on select items
• Offer free community events with specific product collections, such as a holiday-themed workshop called “Gift Wrapping Hacks,” to build brand connections

The trick is using these ideas as inspiration so that you can find your own unique retention strategies best suited to your specific brand, product, and market. 

Wrap Up (and Downloadable Reward for Getting Here) 

There you have it, five online merchandising musts for the upcoming holiday season. Let’s recap

1. Really narrow the field with neighborhood-level merchandising
2. Catch last-minute shoppers with automatic product sorting and real-time trends
3. Use interactive content to match collections to each holiday shopper
4. Turn your online store chat and CRM into virtual personal shoppers
5. Have one eye on next year with seasonal retention strategies

No matter which way you go, remember to adjust and tweak to your specific brand and to test, test, test — and then automate as much as you can to keep up with volume. 

And now, your holiday treat: Your eCommerce Holiday Playbook, which includes inside strategies from over 30 experts.

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