Retailers have developed and refined the science of merchandising for hundreds of years, but the disruption of the internet and e-commerce has been an enormous catalyst of change for the industry

Recent GDP figures show that the British economy grew by 1.9% in 2013. That’s the fastest annual growth rate since the recession and a positive sign for the retail sector as we enter 2014.

But retailers must not rest on their laurels and must continue to find ways to gain competitive advantage. Looking ahead, I believe the evolution of merchandising is going to be a key theme for retailers to consider this year in order to maximise consumer spending.

Retailers have developed and refined the science of merchandising for hundreds of years, but the disruption of the internet and e-commerce has been an enormous catalyst of change for the industry. The art and science of ‘click and mortar’ is just beginning to take shape. In fact, according to eMarketer, the majority of shoppers who visit an e-commerce site do not know what they want to buy. Therefore, there is a lot of opportunity to enhance the role of product discovery.

In the year ahead, we’ll see merchandising continue to reshape itself with three important trends: Discovery, Seasonality and Compression.

First and foremost is discovery. In the early days of the Internet, we surfed the web in attempt to find products we’d seen in magazines or on TV. Web search then helped to organize our curiosity for new products. Today, we continue to navigate in an era of web discovery. Whether it’s Facebook, Flickr or YouTube, the evolution of the web has created “feeds.” News Feed is essential to consumer discovery and retailers leverage it as a digital shopping aisle to beautifully merchandise products plus drive customers to purchase. Retailers will begin investing more in the art of digital discovery this year. 

Traditionally, the holidays were tent poles for retailers’ marketing campaigns. Nowadays, we are witnessing the evolution of seasonality. While holidays are still important retail moments, digital technology gives businesses more flexibility on how and when to approach customers. During the recent cold front that affected much of the US, many retailers’ quickly engaged people to deliver timely digital content. Whether humorous, insightful or empathetic, this kind of timeliness is core to retailers—customers need a reason to shop and timeliness is a key motivator. Digital technology will allow savvy retailers the opportunity for a ‘holiday’ every day or week of the year.

Finally, as consumers continue to increasingly shop online and mobile we’re seeing compression. Imagine you have the same amount of items to sell but your storefront is now smaller. What was once a display wall of fifteen purses is now a page that fits only seven bags above the fold. And on mobile? Just one. With the evolution towards smaller, mobile devices, compression forces marketers to be more thoughtful in terms of how to target customers. In the age of compression, the key to successful merchandising means selling exactly the right product to the right person at the right time. We believe targeting will become the future creative canvas for retail marketers. 

Every year, I spend hours speaking with retailers big and small around the world. While each one has its own unique set of goals and challenges, one singular thing unites them all; a common mission to connect customers to its products or services. And never before has there been a more exciting time to make that happen.

  • Nicolas Franchet is head of retail global vertical strategy at Facebook