Merchandising rules act as a weighting mechanism, based on both product attributes such as product type, category, brands, inventory level, and price—and performance metrics such as conversion rate, margin, and inventory turnover. By mixing and adjusting these elements, product promotions can be tailored to fit different merchandising scenarios.
Merchandising is available for Recommendations, Search and Categories. In each, the basic principle and weighting rules are the same, yet naturally the output mechanism is dependent on the page context.
Once the perfect blend of merchandising is created as a rule, it can be applied to a recommendation, specific search query or an individual category, as a site-wide option across all recommendations, searches and categories or anything in between!
Below is a top-level summary how merchandising works with different Nosto products by using an example of a fairly common, practical use case: A merchandising rule giving more weight for a specific product category, which could be for example a new product range featured in marketing campaigns with high inventory level.
In recommendations: Recommendation respects any of the inclusion and exclusion rules (filters) and selected recommendation type (algorithm) and other options, but by giving more weight for products meeting the merchandising rule criteria. In short, relation to the product viewed or any personalization is not ignored, but merchandising rule outweigh products that don’t meet the criteria, by appearing first or on top of the recommendation.
Example: Without merchandising, a product in new product range & high inventory might be positioned as sixth in a recommendation carousel. With merchandising, product is pushed towards primary positioning 1-4.
In Search: Similarly to Recommendations, search query and relevance of search results based on user’s input is neither ignored, but products that meet the merchandising rule criteria outweigh the ones that don’t, by appearing higher up in the search results page.
Example: Without merchandising, a product in new product range & high inventory might be positioned at the middle section of search results page. With merchandising, the ranking improves more towards the top of the page.
In Categories, products are sorted according to the merchandising rule weighting. Unless specific pinning rules are used, merchandising rule itself is the sorting criteria.
Example: Without merchandising, a site might use a sorting such as new-in, which would by definition rank already position new products on top, typically sorting products based on the creation time or technicalID. With merchandising, products from the selected range which is new are sorted in order of their inventory level.
List of product attributes
Attribute name | Definition |
Available | Option to use a product's boolean availability as the weighting criteria, which is more simplified than the availability status rule since it considers products as either available or unavailable for purchase. The primary use case is to demote unavailable products if they are not already explicitly removed. |
Brand | Prioritize or deprioritize products based on the reputation, popularity, or strategic importance of their respective brands. The term brand can also refer to the manufacturer name of the product. |
Category | Prioritize or deprioritize products based on the reputation, popularity, or strategic importance of their respective categories. The term category can also refer to the product's collection. |
Category ID | This is similar to the category option but incorporates a more technical detail. |
Discount | Promoting products based on their low or high discount rates. |
Discount status | A product's discount status can be 'true' if discounted or 'false' if not discounted. |
Dominant color | Nosto's visualAI is able to detect three dominant colors in a product image. Dominant color is either of these three. |
Excluded product | Products designated as excluded are hidden from visibility in Nosto by default. This option is primarily used to manage scenarios where an exclusion status is specifically required to reorder products. Example: Demote products that you have excluded or blacklisted. |
Inventory level | Focusing on the overall quantity of products in stock. For products with variants, this option can be especially impactful when used in tandem with the variant availability ratio. |
Item pricing measure | Option to use the product's pricing measure as the weighting criteria. |
Item pricing unit | Option to use the product's pricing unit as the weighting criteria. |
List price | The list price refers to the original selling price of a product before any discounts are applied. |
Price | Promote or demote products based on their current selling price, taking discounts into account. |
Parent category | Prioritize or deprioritize products based on the reputation, popularity, or strategic importance of their respective categories. The term category can also refer to the product's collection. |
Personalization | Nosto's AI processing determines a shopper's specific affinities towards certain products based on their browsing and purchasing behavior. The personalization merchandising rule is currently available for Search and Categories. |
Primary Color | Nosto's visualAI is able to detect three dominant colors in a product image. Primary color is the most dominant of these three. |
Product Description | Option to use the product description as the weighting criteria. |
Product ID | This essentially provides a tool to merchandise individual products. |
Product name | This essentially provides a tool to merchandise individual products. |
Promotable | A product is promotable across the Nosto platform if it's in stock and hasn't been explicitly excluded. |
Published | Promote products based on the date they were added to the store, either sorting by products added a long time ago, or newly added products relative to other items in the catalog. |
SKU dominant color | Nosto's visualAI is able to detect three dominant colors in a product image including product variants. Dominant color is either of these three. |
SKU inventory level | Typically either general inventory level or variant availability ratio of a parent product are more universally recommended options for ranking products by their inventory levels, whereas inventory level of a variant is applicable for specific use cases. |
SKU list price | Option to use the original selling price as the list price of the lowest product variant as the weighting criteria. While the general list price of a parent product is often the more universally recommended option, using the variant list price is suitable for specific use cases |
SKU price | Option to use the current selling price of the lowest product variant as the weighting criteria. While the general price of a parent product is often the more universally recommended option, using the variant price is suitable for specific use cases. |
SKU primary color | Nosto's visualAI is able to detect three dominant colors in a product variant image. Primary color is the most dominant of these three. |
Supplier cost | While related to gross margin, this focuses solely on the supplier cost rather than the overall sales margin. |
Tag1 | Tags are Nosto-specific custom attributes where business-specific product details are mapped. |
URL | This offers a way to merchandise individual products, similar to using name or ID, but utilizing the URL. |
Variant (SKU) availability | If at least one variant is available, the parent product gets boosted. Often, the variant availability ratio is a more universally applicable choice. |
Custom field | Any custom field (color, size, fabric, category etc) sent to Nosto can also be used as an attribute to promote or demote |
List of performance metrics attributes
Add to cart rate | Products with a higher add to cart rate are prioritized over those with lower rates. |
Conversion rate | Products with a higher session based conversion rate are prioritized over those with lower rates. This conversion metric assesses sales efficiency per shopper visit rather than per product page view. |
Created | Option to use a product's time since creation as the weighting criterion, aimed primarily at prioritizing newer products or favoring items that have been in stock for an extended period. The creation time refers to when a product is created, which may not coincide with its publication in the store. |
Gross margin | Gross margin represents the difference between the final selling price of a product and its supplier cost, indicating the absolute profit generated. |
Gross margin percentage | Gross margin percentage represents the proportionate profit, calculated by comparing the supplier cost to the final selling price of a product. |
Items sold | This metric considers the total number of units sold for a product, rather than the number of orders with which a product has been associated |
Nosto clicks | Nosto clicks measures how often a product is clicked after appearing in a Nosto on-site recommendation. |
Orders | Option to use order volume as the weighting criteria, promoting products based on either high or low order volumes, reflecting the number of orders they've been associated with. |
Product views | Option to use product views as the weighting criteria by giving more or less weight depending on accumulated views per product. Typically, a product view refers to a product page load or a similar detailed view, contingent on the website's design. |
Profit per product view
| This metric measures the profit generated each time a product is viewed, distinguishing it from traditional impression metrics by factoring in the profitability of product sales. Typically, a product view refers to a product page load or a similar detailed view, contingent on the website's design. |
Profit per recommendation impression
| This metric gauges the profit produced each time a product appears in a Nosto on-site recommendation, differentiating it from the traditional impression metric by also considering the profitability of product sales. |
Recommendation impression | Recommendation impressions measure how often a product is displayed in a Nosto on-site recommendation, contrasting with clicks on those recommendations. |
Return rate | Promote products based on the return rate, either sorting by products with a high return rate, or low return rate relative to other items in the catalog. (only for Shopify) |
Sales per product view
| This metric measures the sales generated every time a product is viewed. Typically, a product view refers to a product page load or a similar detailed view, contingent on the website's design. |
Sales per recommendation impression
| This metric measures the sales generated every time a product is displayed in a Nosto on-site recommendation, setting it apart from traditional impression metrics. |
Sales velocity
| Sales velocity measures a product's individual turnover rate, indicating how quickly or slowly it sells. |
Total sales
| Option to use total sales as the weighting criteria, promoting products based on high or low sales volumes, which represent the product's monetary sales instead of orders or items sold. |
Variant availability ratio
| Products with a larger proportion of available variants are ranked higher, while those with fewer are ranked lower
Availability ratio is the percentage of available SKUs / variants for a product. It doesn’t look into share of inventory but the availability of different variants. Product A: |
List of personalized attributes
Size | Weights products that a shopper has affinity for using attribute ‘size’ |
Brand | Weights products that a shopper has affinity for using attribute ‘brand’ |
Category | Weights products that a shopper has affinity for using attribute ‘category’ |
Tag 1 | Weights products that a shopper has affinity for using attribute ‘tag1’ |
Tag 2 | Weights products that a shopper has affinity for using attribute ‘tag2’ |