The merchandising view: Daniel Reckling of Neckermann.de

In the second part of our series of interviews with merchandisers, I speak with Daniel Reckling, Head of Dynamic Sales at Neckermann.de, one of Germany’s (and Europe’s for that matter) largest & leading retailers to talk merchandising and e-commerce.

If you’d like to join Neckermann, Daniel Reckling is currently looking for a new senior recommendation engine specialist.

Can you give an overview of Neckermann and your e-commerce business?

Neckermann.de is one of the leading online retailers in Germany. Neckermann Group also has subsidiaries across the European market: In Benelux, Switzerland, Austria, and some central European countries as well.

2010 was actually a double anniversary for us: we celebrated 60 years since our company was founded, and 15 years since we launched our first web shop. Today, e-commerce is our primary channel. We still publish a large printed mail order book, which directs consumers to the online shop.

In numbers, Neckermann Group had a turnover of nearly 1.2 billion and about 4,000 employees in 2009. We offer over 700,000 SKUs online, including fashion items, consumer electronics, furniture and more over our online shop.

Since the summer of 2009, our web shop runs on the Demandware platform.

How is e-commerce organized at Neckermann.de?

Neckermann sees e-commerce as our key business – it’s not just a department, but a cross-functional responsibility for all our employees. Today, two thirds of our sales are generated via the Internet. Changing our name from Neckermann Versand (“mail order”) to Neckermann.de in 2006 has been one way to signal this shift.

Nevertheless, there is a dedicated e-commerce department at Neckermann.de, organized into E-Commerce Sales, Project Management, Online Marketing and Newsletter.

What are your responsibilities?

I am the team leader for “E-Commerce Dynamic Sales”, part of E-Commerce Sales. We were set up last year, and have now grown to 3 people – and we’re looking for a 4th team member.

Our team is responsible for the operational business of all performance-optimized selling. That includes our product search, recommendation engine and other tools for dynamization and individualization of shop elements (products, prices, brands, campaigns, incentives). We also develop strategic concepts to find new fields of applications, and optimize rules- based functionality to increase order values and conversion rates.

You could say a web shop is quite plain in itself, so there are a lot of applications for dynamic sales and recommendation engines.

Can your share some recent projects Neckermann has launched?

Last year we migrated to Avail Behavioral Merchandising G8, a major update for us. Before that we hadn’t done any updates, so version G6 had been running for 3 years.

At the same time, we increased our usage of Avail, especially on search pages and personal pages:

1. On search pages we now take Avail’s search recommendations and display them not only at the top, but also mixed within the generic search results, using larger pictures to mark them as special recommendations.

You can try it by searcing for “poloshirt”: http://www.neckermann.de/on/demandware.store/Sites-DE-Site/de_DE/Search-Show?q=poloshirt&Submit=Los

2. We created a personal area at the web shop, with individualized merchandising. The area is divided into three pages:

• First you are able to look up all recently viewed products
• Second, we display a page full of personal recommendations based on recent purchases and clicks
• Third, we have created an interface where the user can explore products in an entirely different way. The user is actually navigating among cross-selling rules.

http://www.neckermann.de/on/demandware.store/Sites-DE-Site/de_DE/Customer-RecommendationsWorld

Neckermann was an early adopter of behavioral merchandising / personalized recommendations. Can you share a learning?

The users are flooded by advertising. If you just display products a user could be interested in, they won’t respond in most cases.

But if you just use the right message – e.g. “Other customers who searched for ‘poloshirt’ frequently bought these items” – conversion rises. It’s about transparency: If you let the customer know why you’re recommending these products, they recognize that this is really a helpful functionality and not just the output of some merchandisers who want to dump their overstock on the customers.

What makes someone great at merchandising?

Simplicity. You can come up with so many different merchandising algorithms and rules. Should I blacklist sales items in my recommendation engine? Or boost them?

Sometimes, you get the best conversion if you don’t over think it.

To take an example, we have actually noted that one of the best ways to retarget returning visitors to the web site is just to show them the products they viewed during their last visit.

In such a specialized environment as merchandising, it is very hard to simplify – but if you do, you’ll win.

What “must-haves” are there for merchandisers?

Numbers and detailed reports. You should be able to monitor your activities all the time. Neckermann is an incredibly numbers and reports-driven company.

How do you think e-commerce and merchandising will evolve in the future?

There will be more and more information on the Internet, and there will be less separate sites. For example, it’s not necessarily so that selling will take place at our online store – we could sell anywhere on the Internet, where the user is at that time. Consumers will carry their digital identities with them. In this context, it will be important to gather as much information as possible even before the user lands on your store’s pages – to use whatever information we collect, such as where they came from, what they have done, and so forth, and take this into account.

In this context, manual merchandising and manual campaigns will be impossibly expensive. It will take too much time and resources. Recommendation engines and algorithmic selling offers the opportunity to overcome this problem.

Another area that will change is advertising. Advertising is more and more becoming like auctions, where you have a lot of background on the user to help you determine if you should display a banner or not. This will drive up the cost of ads, and you will need to be selective in serving only those ads that stand a chance to drive a purchase, and use all the information at your disposal.