Profit-Boosting Merchandising Strategies for Growth — Daniel Gurevitch | How Smart Merchandising Drives Growth, Why Bestseller Metrics Can Mislead Decisions, How Smart Widgets Improve Recommendations, How Shopify Stores Manage Large Catalogs (#361)

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Discover how to make product discovery effortless for your customers and maximize profitability in your store.   

On this episode of the Ecommerce Coffee Break Podcast, host Claus Lauter chats with Daniel Gurevitch, Co-founder and CEO of Kimonix, about strategies for collection management, product sorting, and profit-driven merchandising.   

With insights drawn from Daniel’s extensive experience in eCommerce consulting, you’ll learn practical tactics to optimize inventory, reduce slow movers, and enhance customer experience using data-driven solutions.

Topics discussed in this episode:  

• Why focusing only on bestsellers hurts profits - The 80/20 rule pitfall in ecommerce 
• How to balance bestsellers with slow inventory - Smart merchandising strategies revealed 
• What 70+ data points tell about product success - Beyond basic sales metrics 
• How AI manages collections automatically - Balancing new, best, and slow movers 
• Why traditional bestseller metrics mislead - The marketing spend impact 
• What true collection analytics reveal - Understanding real product performance 
• How smart widgets boost recommendations - Mixing personalization with inventory 
• Why inventory health matters - Using data to make promotion decisions 
• How Shopify Plus stores optimize collections - Implementation for 150+ product catalogs 
  
  

Links & Resources

Website: https://www.kimonix.com/
Shopify App Store: https://apps.shopify.com/kimonix
LinkedIn: https://www.linkedin.com/company/kimonix/
LinkedIn: https://www.linkedin.com/in/daniel-gurevitch/

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Transcript

Hey there, this is Claus Lauter and you're listening to the eCommerce Coffee Break Podcast, the show that helps you become a smarter online seller. In today's episode we talk about strategies for collection management and product sorting and we explore the concept of profit driven merchandising.

Joining me on the show is Daniel Gurevitch, co founder and CEO at kimonix.com. . So let's dive right into it. Hello and welcome to another episode of the e commerce coffee break podcast. Today we want to find out how you can make it easier for your customers to find the right product and how you can make your shop less challenging if you have a huge customer base.

of products in your store. Specifically, you want to drive into profit driven merchandising and find out what that is and how it helps you in your business. Joining me for this on the show is Daniel Gurevitch. He's the co founder and CEO of kimonix.com. . With years of experience as an e commerce and retail consultant, Daniel has worked with hundreds of brands ranging from global enterprises to small business across the United States, Europe, and China.

Drawing on his expertise, he created kimonix to help brands optimize their make. Merchandising strategy and drive profitability. So let's dive right into it. Hi Daniel. How are you today? 

Hi Claude. How are you? Great to be here. 

Great to have you on the show. Daniel, what are some common mistakes to see when brands are setting up their store, their merchandising strategies?

So what I see is that. Many times brands, and I'm talking mostly the more advanced brands. Um, they, they only take care of sales of conversion rates. They only take care of those KPIs, only selling more and using merchandising. And those are the KPIs to measure the merchandising. And what happens there is that they're really hurting their profitability.

And I'll tell you why each store has a classic Pareto. Most or at least of around 20 percent of the value of the, of the products are generating around 80 percent of the revenue. And what happens is using too many personalization tools and only take care of, you know, uh, boosting the best sellers, um, what happens is you're keep selling those 20 percent and then they're out of stock and then you replenish them and then you are basically selling the same products over and over again, and the other 80 percent of the products are laying in the warehouse, creating so many hidden costs.

And really blocks the cash flow, doesn't allow the brands to, to buy new inventory and really hurting, creating this vicious cycle within the store that does not allow them to, maybe they sell more, but they, but they profit less. So that is, I think, the most common mistake I see with Shopify brands, you know, e commerce brand or Shopify brand.

We work with Shopify brands, mostly Shopify Plus. 

Okay, that makes perfect sense. And obviously, I'm a big fan of the 80 20 rule, but what you just said makes perfect sense. Now, how can you turn this around? I mean, obviously, you still want to focus on your best sellers, um, but at the end of the day, you want to be profitable with your store.

What are kind of tactics and strategies to, to achieve this goal? 

Yeah. So then the idea and ideal strategy with balance between those different types of products. So you always want to expose new arrivals. You always want to promote the best sellers, obviously, but nobody also sprinkles and pushes. And, uh, the slow movers, the dead stock.

So the ability to balance between those would be the best way to go. The way that we do this in kumonics is using product segments. I won't get into too many details, but allow you as a merchant, as an e commerce general merchandiser to manage your collections or even your product recommendations in a way that will showcase, let's say one role of new arrivals, then one role of bestsellers, then.

One row of slow movers. And then again, and again, and again, and again, across the collection. Um, and this way you're, you're still exposing the new arrivals. You're not losing any sales of the best sellers, but you are still moving those, those, uh, slow movers and helping maximize the engagement. 

That's kind of interesting because if you have a huge store with a lot of SKUs, that might become very, very difficult.

And I think AI data analysis helps you there. What's your system to, to get this done? How does Common Economics help with that? 

So, like you said, we need a lot of data points in order to do so. So, we have around 70 parameters. Really advanced parameters and analytics to, to use for merchandising, for the ability to really, um, to provide any merchant with the needs that they have.

So we even integrate with a lot of other, you know, tools like whether it's Yotpa for reviews or all the, most of the reviews apps, even with companies like Loop Returns. So you can get also data on returns. You don't want to promote highly returned products in your collection pages on product recommendations, even though they sell a lot, maybe they're also returned a lot.

Um, so the ability to balance between different parameters within that structure that I mentioned, but also when you're promoting bestsellers, what do you, how do you consider bestsellers? How do you identify bestsellers only based on sales quantity? Not always, maybe this product was highly promoted on marketing channels.

So this is why they get more sales. It's not necessarily the means that there are bestsellers. So you want to, to get also conversion rate or ads to cart or reviews into that mix. And also maybe it's was a bestseller, but you want also the inventory parts because let's say you're a fashion brand. And this product is, uh, it's, it's, it's a bestseller, but now only 60 percent of the sizes are in stock.

You got left only like the extreme sizes. You don't want to push it to the top of the collection because the chances of selling. It's much lower. So there are so many, so many parameters and factors you need to take into, into consideration when merchandising the collections, the product recommendations and across the store in general.

Very interesting approach. I like that you're taking data points from, from all bits and pieces of your business to really find out what is the best seller. Uh, because. You just, and I think a lot of merchants out there, they just look at the sales numbers and say, that thing was making the most revenue.

It's our best seller. But at the end of the day, it might be not profitable when you basically put your system in place. How does that look in our day to day basis from the e commerce manager, from the store manager and what can the customer see on their side? 

The customer on there. If we're talking about like in the platform, we have three main products, first of all.

So we have the collection merchandising, everything to do with collections. Then you have the product recommendations using also personalization. And also we have the email marketing where you can leverage the personalized recommendations into email campaigns using your own email provider. So it really depends on what you're talking about.

If we're talking about collections, the end customer sees the same things. We don't touch the front end. We don't touch the design. We don't touch the layout at all. We just touch the back end in Shopify admin to control the sort and order of the products. So, the e comm manager, once they go, they have, once they install the app, they have two main options.

They can either sort the existing collections they already created in Shopify, or they can create new smart automated collections using the app. So then they need to choose, and then they can, you know, form a main sorting strategy, apply it to as many collections as they want. But also they can recreate some of the collection in order.

To strategize those even more with the segments that I mentioned before and really do some more advanced works, advanced merchandising. Um, whether it's like, like I said, new arrivals, bestsellers, slow movers, whether it's by, I don't know, fashion brand wants to do it by colors. Maybe, um, you want like too pink, too black, too white, too green, whatever, to really merchandise the collection in a more, you know, Converting like a good customer experience.

Sometimes there are many collections like sale collection or all products or a certain vendor that has, it's a list of random products you see, whether if it's a fashion brand, for example, you got like two jackets, three hats, then a t shirt, then a tank top, it's, it's a mess, not a good customer experience.

So you can really structure the, that by different types of products using the segments. And then using the sorting strategy within each segment, making sure that the right products from each type would be pushed to the top. So the initial setup would be understanding which strategy you want to implement, set it up only once, and then let the data and automation do all the work all the time.

And on an ongoing basis, of course, do A B testing. That's the most important thing, you know, always test different strategies, see what's, what works better for your business goals, always be, you know, on it. 

I want to dive a little bit into the numbers, into reports and analytics from what you get out of the system, because obviously there is a lot of potential with your solution to optimize your product range to get rid of things that are actually not selling and to push things that are selling better.

What kind of reporting tools can I expect? 

We have a collections analytics, which is very unique. Because we do the collections attribution. So each product, usually in a store, is part of many collections. So if you try to do analytics by yourself, if this product has one sale, it goes to all the collections it's part of.

And so you don't know, and maybe the sale came from a collection, maybe it came from an ad, you don't know. So we identify if it came through, through a collection page, and if so, through which collection page it came from. Um, and then we attribute that sale only to that collection. So you get a very, very accurate collections analytics.

So that is something that is, I don't know if it's, available anywhere else. And also all these advanced parameters you get on a product level for everything that you have in the store. In terms of, of measuring, um, obviously you get all the time. You can compare what the convert now, what's the conversion rate, how many saves you get per promotion.

We also have, even we have, uh, we added recently a really cool parameter of inventory health that shows in a collection, what Is how's the inventory is performing compared to the sales? How much, how many products there have problems in terms of days to finish inventory, dead stock. Um, and, and this really allows you to change the, the sorting strategy based on that as well.

And like I said before, also the AB testing where you can test different sorting strategies within, within the collection and then see all the results. The sales. The, the ads to cart, uh, the, the, how many appeal in all those, the gross profits, the inventory health, all those type of things to really help you understand the situation of your collections.

Um, and if we're talking about product recommendations and email campaigns, obviously you see. How many, how much revenue generated from there? What was the conversion rate and how much, uh, actually money you made out of the widgets and, uh, you know, the elements that we provide. 

Tell me about the widgets.

So as we mentioned that you're basically, um, using or facilitating the data to optimize on different platforms. How does that look? What kind of widgets do you have? 

Um, so first of all, we have the, you know, I would say the classic product recommendations. You may also like the widgets that you put across the site, whether it's the product page, homepage, using one on one personalization based on real time sessions of the customer.

So we're tracking what the customers are clicking on, which products they are viewing in all their sessions. Um, and then we're able, the AI is able to identify and promote the right product. So you can use that, you can use stuff like frequently bought with similar products, you know, all those, uh, really, uh, important strategies and then implement it across the board wherever you want.

But the unique thing is that you can manage that element just like managing a collection. So you can use, first of all, you can use all the analytics that we have, but also the segments that I mentioned. So think about an element, a product recommendation element on your product page. Then you can show two personalized products, then two frequently bought with, two new arrivals, two bestsellers, and two slow movers.

You don't have to settle just for one strategy, and then you can create that mix and again, balance between different, different metrics, different business goals in order to drive more profits. 

I think that will the life of, um, an e commerce manager much, much easier, um, to have a control of, over all of this with the help of AI.

Can you give me an example, a case study of a customer of a brand that you worked with and you don't need to name them, um, and what kinds of results they saw? 

One of the, my favorite case studies, yeah, I won't mention the, the brand, you can see Whoever wants you can see it on our website They had a really big problem of what we mentioned in the beginning They wanted to to promote the dead stock in a way to move the dead stock But they did not want to lose any sales out of their best sellers Obviously because on Shopify and other tools what they had to do is either sold by inventory or sold by you know And it's all also only by amount of inventory that doesn't also doesn't make sense So we help them across the board on all their collections, um, execute the merchandising strategies, strategy, sorry, using the segments of balancing between those bestsellers.

And slow movers and rotate between them, alternate between them in a way that will mix and, and the customer will see some of this and some of that. And using a parameter for the dead stock, like different parameters, like days to finish inventory, the amount of inventory, the value of the inventory to really assess which ones you really need to promote the most.

What, what is the most urgent ones? And, and that led to an increase while, while increasing the conversion rate by 29%. We were also able to decrease the slow movers by close to 20%. And the overall result was 8 percent profit increase, which was amazing. Yeah, 

that's definitely a really good result. Tell me a little bit, you talked about fashion industry, but who's your perfect customer?

Are there specific verticals or industries that you work worse than others? 

So yeah, obviously fashion brands and apparel in general is It's our, you know, a main, a main part of, of our customer base, but, um, it's any brand that has, first of all, a large catalog, you know, it starts from over like 150 products.

It starts to be really, uh, we have some from 100, 150 to 40, 000 products, uh, it varies, but it starts there. And I think that once you get to around 200, 300 products, it really gets. It's tough to manage it and also to be able to use all the analytics. You always want that. So yeah, large catalogs really have, I think, advanced brands.

We work mostly with Shopify plus brands. We do have others as well, but the advanced merchandising is usually for, you know, the larger ones. And also that's not a must, but many times there's like inventory urgency because you need to have like brands they don't care about. Inventory delays in the warehouse, because I don't know, for some, this reason or another, um, maybe a bit less, but in general, the first, the first, uh, that I mentioned, uh, are the most important ones.

Absolutely. Is there any kind of homework that a merchant needs to do before they can start working with you 

They don't have to, but it would be, I think it would be really good to understand what they want to achieve. Like what is their business goal? Uh, what is important for them in terms of merchandising?

Whether they have like unique needs, like, okay, we are a brand that have Uh, we really need to promote certain vendors. We really need to be able to do X, Y, or Zed. Um, but in general, they already know it out of the, you know, day to day work. 

Walk me through the onboarding process of a new customer. What steps are involved?

How long does it take to get up and running? 

So if we're talking about the collection part, it's a pure plug and play. Like everything done through the. The backend, so you just install the app might take 5 minutes, 10 minutes, 20 minutes, depending on how much data you have to import all the data and then you're good to go.

You can start. However, we always suggest we offer everyone an onboarding call to, you know, use our team to really set everything up in the, in, in the right way, in the most, in, in, in a way that will allow them to understand what is, how they can achieve and implement what they're looking for. Um, but then, then everything is super quick.

You can, like, you can install 10 minutes later, use even an AI sorting strategy that we offer. Or whatever you form, like as a template, apply it on all collections in 10 minutes, you already made a huge impact on your store. 

Tell me about your pricing structure. How does that work? 

So it's, it's, uh, based on the monthly, all those average.

Um, so the way that it works is once you install the app or before, if we talk, uh, in a different, uh, you know, in a sales way, we understand the average there. Then you get a price for each of the plans. And then once you start the plan, it's a fixed fee. As long as you stick to that plan, you would stay on that, on that fee, no additional charges, no surprises there.

So it varies from really small brands from a few tens of dollars up to around 1, 500 a month for the bigger ones. 

Okay. That makes perfect sense. Before we come to the end of our coffee break today, Daniel, is there anything that you want to share with our listeners that we haven't covered yet? 

Profit driven merchandising is a, I think it's a new thing from, from what I experienced also from my experience before chemonics.

Um, it comes from the brick and mortar, but on online, because it was built by online marketeers, it wasn't very, you know, I think it's starting to get there and people understand the need to, to take, take into consideration for inventory margins and those types of things. So really take care of that. Look into that when merchandising the store, um, how you can not only sell more, but also sell in the right way.

In a smart way that would take care of your bottom line, take care of your inventory. Your margins and not come to the, now we're getting into Black Friday, like with so many, you know, dead stock that you need to move in for zero margin and make, you know, no profit there at all. 

Yeah. I think it makes perfect sense.

And I think that you mentioned it comes from brick and mortar. Um, it's a good explanation there. If you have a good salesperson, um, they do exactly what the AI is doing now for you online. So basically you have your best salesperson now in your online store helping you with optimizing for better profit.

Where can people go and find out more about you guys? 

www. hemonics. com or in the app store. Uh, category and collection of sorts. By the way, we also have a profit driven workshop for Shopify Plus brand, which is really cool. We go into like, it's really exclusive with four or five brands at a time. We go into profit driven merchandising, uh, open discussion about their problems and getting out with every, each one is living with a new strategy and solution for the merchandising problem.

So we can sign up on the website and it's really cool. 

Okay. That sounds like a very good offer. I will put the links in the show notes as always, and you're just one click away. Daniel, thanks so much for giving us an overview on profit driven merchandising. I think that someone who runs a store and e commerce manager on Shopify plus should definitely have a look at, and I think the numbers that you mentioned, what kind of, um, results you can achieve speak for themselves.

Thanks so much for your time today. 

Thank you very much, Claus. It's been a pleasure. 

Hey, Claus here. Thank you for joining me on another episode of the e commerce Coffee Break podcast. Before you go, I'd like to ask two things from you. First, please help me with the algorithm so I can bring more impactful guests on the show.

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