More than ever, retailers are turning their attention to one of the core aspects of planning: assortment management and optimization. Facing tepid store traffic, unpredictable top-line revenue and the emergence of off-price sales channels in traditionally less price-sensitive segments like specialty, apparel, fashion and luxury, retailers are hard-pressed to integrate their assortments with shopper insights and the overarching planning model for an ever-more consumer-centric approach.
In the latest issue of InDemand, we shared high-level findings from a new JustEnough Software-sponsored survey by EKN of about 50 retailers North American retailers, which revealed two major obstacles that are challenging the industry as a whole:
- First, more than one in three retailers lack predictive tools to forecast customer demand
- Second, about the same percentage are unable to plan assortments around multiple product attributes such as size, color and style, among others
The EKN 2016 Assortment Planning and Localization research highlights strategies and solutions that better support assortment-mix decisions in retail pre-season, in-season and end-of-season. Take a minute to download the free report and view the free infographic to learn more about the steps retailers are taking to combat the above-mentioned challenges and ultimately drive more profitable retail execution – from precision to increased full-priced sell-through of merchandise to reduced dollar markdowns. There’s also a free Assortment Planning & Localization Quickscan Assessment you can take to learn how your organization compares to others in the industry. Learn more here.
JustEnough Software Expansion: Assortment Planning and Price Management
The InDemand newsletter highlights the launch of the latest version of JustEnough Assortment Planning. We continually work with leading retailers and industry experts to ensure users have cutting-edge technology and processes to address trends in the industry – including those revealed in the EKN report. Our enhanced Assortment Planning solution offers:
- Seamless integration with Merchandise Financial Planning for target setting and open-to-buy budget reconciliation, as well as Allocation for executing inventory placement in line with assortment plans
- Rationalization of the assortment width and depth within each cluster across product groupings
- Automatic smart-start creation of a plan for each item in the assortment, including sales, buy, promotional and markdown plans using dynamic clustering and unlimited attributes with plans that automatically adjust for in-season trends
- Time-phased receipt flow with built-in size curve and prepack optimization
- Assortment visualization with the capability to drag and drop images into the assortment and to create and plan placeholders on the fly
In addition to announcing the newest version of JustEnough Assortment Planning, InDemand also spotlights advanced functionality now available in our Price Management solution.
JustEnough Price Management enables users to better manage complete lifecycle pricing – from establishing price strategies to setting initial prices through price adjustments and promotional price changes through to end of life. As a result, retailers can create a more efficient and compliant pricing process that drives sales, improves margins and increases customer loyalty.
New capabilities include:
- More powerful rules and validation engine, which enables users to ensure compliance through creating and enforcing internal and external rules including competitor, rounding, vendor, legal and financial
- New workflow engine, which supports the use of pre-configured best practice workflows or configuration of custom workflows that guide users through the pricing and approval process while also providing complete visibility into price change status so users always know where they are in the process
- Price adjustment integration to facilitate tighter integration of JustEnough Promotion Management to Price Management, which automates the population of promotional prices into the pricing lifecycle reducing planner effort while more importantly ensuring that potential human error is not introduced into the process
To learn more about our industry-leading Assortment Planning and Price Management solutions, contact us today.
And You Won’t Want to Miss…
In addition to the EKN 2016 Assortment Management and Localization report and information about our software expansions, this issue of InDemand also showcases:
- Customer Success: The Crazy Store Gets Serious Results with JustEnough
One of the largest discount variety chains in South Africa with a footprint of about 280 stores, The Crazy Store could no longer support the growth and complexity of its business using a dated and highly customized replenishment solution. The Crazy Store selected JustEnough to help it quickly overhaul its existing replenishment system. After going live on time and on budget, the retailer has benefited from a 20% hike in in-store product availability and double-digit sales growth every year since the implement. Read more here.
- Research Reports: The Future of Retail
A recent Raconteur report, sponsored by JustEnough, found that rapid transformation coupled with changing consumer behavior and digital technology has made predicting what lies ahead increasingly difficult for retailers. Executives need to become more digitally aware and informed to make the right decisions for their business, and retailers also need a better understanding of the customer in real time to enhance personalization and provide a seamless purchase journey across all channels. Read the full report here.
- JustEnough In The News: The Record
“Balancing Customer Appeal and Profit,” a byline penned by Keith Whaley, JustEnough’s Senior Vice President of Retail Strategy, was featured in latest issue of TheRecord – formerly OnWindows Magazine, Microsoft’s premier publication. The article reveals how analytics can help retailers better create visually compelling assortments that drive customer sales and profits. Check it out here.
Also, if you didn’t catch my July 26 blog post, JustEnough was recently recognized by CIOReview as one of 2016’s Most Promising Retail Technology Solution Providers. You can read the JustEnough profile here.
- Thought Leadership: The Case for Customer-Centric Transformation in Merchandising
JustEnough, Kalypso and EKN hosted a webinar to make the case for consumer-centric transformation in merchandising and to lay out “how” organizations can make this shift. Check out the jointly authored articles on our blog below, or watch the on-demand webinar featuring JustEnough’s Peter Leith, EKN’s Sahir Anand and Sonia Parekh of Kalypso here.
We hope enjoy reading the latest installment of InDemand, and click here to subscribe to receive it in your inbox each quarter.
If you watch CNBC and listen to the earnings reports, you know that many retailers seem to be struggling. With store closings and malls appearing to be wastelands, it looks like brick and mortar is holding on to a thread. However, in an interesting Harvard Business Review (HBR) article, the authors point out that this may not be the whole story. According to Census Data, brick and mortar sales accounted for 92.3 percent of retail sales in Q1 of 2016 – and that is two decades after online shopping became a thing.
So what is going on with retail? The HBR article goes on to explain that in order to compete online and offline, retailers have to reinvent themselves. It is becoming increasingly clear that this is about devising retail models that work for people who are making increasing use of a growing array of Internet-connected tools to change how they search, shop and buy. Creative retailers are using the new technologies to innovate just about everything stores do from managing inventory to marketing.
At JustEnough, we help retailers reinvent themselves and guide our clients on paths to a customer-centric model. By knowing how, where and what customers are buying through advanced analytics and customer-centric merchandise planning, retailers can better understand how to frame their business to meet customer demand – online and offline.
Contact us to learn more about how we can help you gain valuable, actionable insights into your customers. To read the full HBR article, click here.
We are excited that JustEnough was recently recognized by CIOReview as one of 2016’s 20 Most Promising Retail Technology Solution Providers, a premier list of technology vendors and consultancy firms that offer the most innovative solutions and services to the retail industry.
This annual list assists CIO’s in finding the right technology solution providers to help them succeed in today’s fast-evolving retail environment. The Top 20 listing provides a look into how these solutions work in the real world so that organizations can gain a comprehensive understanding of what technologies are available and how they shape up against the competition. Companies are selected for the Top 20 list by a panel of industry and technology experts and members of Retail CIO Outlook’s editorial board.
JustEnough’s inclusion was based on evaluation of our omni-channel retail planning software that enables retailers to merchandise assortments and maximize product inventory across physical and digital channels so products are available when and where shoppers want them. Recognition by CIOReview follows closely on the heels of its inclusion in Retail CIO Outlook’s 2016 Top 10 Merchandising Solution Provider list published in February.
You can read the complete JustEnough profile in the report here.
Last week I highlighted an article from Raconteur’s special report, The Future of Retail, about how retailers need to innovate in order to flourish in today’s challenging and competitive retail environment.
A subsequent article in the report, ‘Keeping Up with the Pace of Change in Retail’, explains that rapid transformation fueled by changing consumer behavior and digital technology has made predicting what lies ahead more difficult than ever. The most effective way that retailers can become more responsive and agile is technology. Embracing and investing in new technologies allows companies to create platforms for growth and enable new business model innovation.
Companies need to rapidly address the technology challenges that hamper their core business capabilities. Avoiding systems that take a long time to implement is important, as the longer the implementation takes the more change that will have occurred in the industry, potentially making the implementation all-for-not.
Retail executives need to be more digitally aware and informed to make the right decisions to become technology companies that also happen to be retailers. Companies also need a better understanding of the customer in real time to enhance personalization and provide a seamless purchase journey across all channels.
JustEnough’s industry leading retail planning solutions are helping companies worldwide to transform their businesses. Our end-to-end solution suite is easily and quickly implemented, ensuring companies can get up to speed and achieve results in a short timeframe.
Contact us to learn more. To read the full Raconteur article for more information, click here.
An independent Raconteur publication, sponsored by JustEnough, on the Future of Retail describes how retailers need to reinvent themselves in order to survive. According to the lead article in the report, even though economies seem to be growing and moving past the downward turn of the last few years, this isn’t reflecting in the retail industry as consumers are choosing to spend more on leisure activities and experiences such as travel.
The article points out key directives that can help retailers innovate and bring customers back:
- Create more fun, experiential and social stores by incorporating cinemas, bars and other activities into the brick-and-mortar store
- Have a relentless focus on understanding and responding to the customer
- Make it a priority to seamlessly combine both the physical and digital shopping experiences
- Offer innovative products to make the most of higher margins before items are commoditized
- Expand internationally with companies like China’s Alibaba to reach new customers without opening risky new locations
Retailers are truly locked in a survival of the fittest where only those that innovate will flourish. What is your company doing in order to innovate and reinvent in order to not just survive but thrive? Tell us in the comments section. At JustEnough, one of our biggest priorities is to help guide retailers through the process of moving towards a customer-centric planning model. It’s not an easy road, but one that must be taken to move ahead in the future.
Contact us to learn more. To read the full Raconteur article for more information, click here.
In last week’s blog, I referenced an article in Internet Retailer describing the shift in consumer buying behavior when it comes to back-to-school shopping. Studies have found that more and more consumers are buying outside of the traditional back-to-school shopping season. That said, this doesn’t seem to be an isolated trend. The same is happening when it comes to holiday shopping, according to Demandware’s Shopping Index. The index found that the shopping calendar has leveled out between January and October as consumers move toward shopping equilibrium. Holidays and other traditional shopping periods will always remain strong but we are beginning to see an end of the traditional seasonal promotion cycle.
Nothing’s stopping a consumer from picking up a few holiday gifts for friends and family at the tail end of summer or grabbing a few gifts in January during the post-holiday sales period. Consumers want deals and off-season promotions such as Amazon’s Prime Day and Alibaba’s Singles’ Day which offer consumers a way to feel they’re getting a better deal buying out of season.
Thus, in order to prepare for off-season promotions, retailers must enhance inventory visibility, improve their forecasting techniques and provide consumers with the access to purchase whenever and wherever.
Personalization is a critical capability to help retailers maximize the year-long shopping season. By aggregating customer shopping data from across the shopping journey, retailers can offer personalized promotions, offers and other messages to draw consumers online or in-store.
Obviously, it is time for retailers to gain insight into their customers buying patterns and changing buying patterns to adapt and meet customer expectations. JustEnough helps its clients to improve promotion management capabilities in order to predict and analyze promotions for better performance. Coupled with our Customer Insights module, these solutions can further enhance a retailer’s ability to act upon key customer insights derived from vast amounts of data to meet customer demand at the right time and channel.
Contact us to learn more.
Read the complete article here.
A recent article published in Internet Retailer describes a shift in consumer buying behavior, specifically when it comes to back-to-school shopping. Traditionally we think of back-to-school shopping as a July to August activity, but according to a survey of online shoppers by Bizrate Insights, 5 percent of shoppers began in April and 7 percent say they will begin before June. Clearly, retailers need to be ready to support shoppers across all channels by the end of June.
Promotions are equally as important as product availability and quality. Online shoppers are searching for deals. In a separate study from Connexity’s Hitwise, found that 1 in 300 online searches are for coupons, sales, discounts and deals.
Other findings from the back-to-school shopping study include:
- 69% will use mobile devices to research products.
- 59% say their children’s preferences influence purchase decisions.
- 42% of women vs. 27% of men will use mobile devices to look for coupons.
- 41% will use mobile devices to compare prices while in-store.
- 30% say brand loyalty affects what they buy.
- 25% say ratings and reviews factor into their buying choice.
With these shifts in consumer buying patterns and behavior, it’s critical to gain insights into how your customers and various customer segments react to promotions, how they shop, when and where they shop in order to meet their changing expectations. At JustEnough, we’re helping our clients prepare for and meet changing customer demand. Our Promotion Management solution allows you to better plan, execute and analyze how promotions are performing and our Customer Insights module allows retailers to understand their customers’ behaviors better by identifying trends, causal relationships and opportunities inside large amounts of customer data and act upon those insights accordingly for more customer-centric planning. Contact us to learn more.
Read the complete article here.
By: Peter Leith, VP of Product Strategy, JustEnough; and Sonia Parekh, Lead Merchandise Planning Consultant, Kalypso
In our last Blog post – “Making the Case for a Customer-Centric Transformation in Merchandise Planning” - we discussed “why” your organization should embrace customer-centric thinking in planning. In this post, we will layout “how” your organization can make this shift.
The most important thing that everyone within your organization must understand and embrace when mapping out the path to customer-centricity is that it is a multi-dimensional journey. This transformation does not happen overnight, and is truly on-going as the company continues to grow and new strategies are created that must also be customer-centric.
According to retail industry expert Sonia Parekh, Senior Manager at Kalypso, there are six key areas that are necessary to focus on in order to make your organization truly customer-centric – decision making, tasks, organizational structure, skills/people, rewards/recognition and information & systems. In this post, we will break down each area and go through the questions you need to answer as you take your organization through this transformation.
It is crucial you start this journey by taking a look at your merchandising and merchandise planning processes from end to end, and identify the critical points at which the entire team must align and lock down certain decisions in order to move forward. This includes the selection and pricing of the assortment. Typically, these decisions are approached with information about what sold last year, what categories or subcategories are trending and how we need to plan brands to achieve external incentives provided by vendors (like volume discounts, promotional support, etc.).
A customer-centric merchandising group acts very differently. They put the customer first in every decision. Think about your various customer segments and how each responds to different silhouettes, colors, brands, materials, etc. Once this is done, select an assortment that best meets the needs and preferences of your customer.
Also, think about what prices will maximize demand for each customer segment. For example, if you are planning the baby diaper category, you are likely to have a price-driven customer segment – one that wants a diaper that they trust at the lowest price possible. They will have a price ceiling that is lower than the customer segment who will pay more for a diaper that has fun designs or is made of biodegradable materials.
So that leads us to the next question – how do your customers value different brands, materials and product features? For example, how do moms in the Pacific Northwest make decisions around the boots they purchase for their kids? How do these crucial purchase criteria differ from moms in the Midwest or Southeast? Customer-centric merchants and planners take all of this into consideration when making merchandising decisions.
As you change the way decision-making is done, you must also change the actual activities and tasks along with the sequence in which they are performed and perhaps even the organization or team responsible for each one. In a customer-centric merchandising world, you will be developing assortments, considering pricing strategies, planning promotions and allocating product by customer segment. You must ask yourself: how does the work get done today? What does the process look like? If your key decisions change, in what ways may the process need to change?
Start by taking each key decision and define what work needs to get done leading up to that decision. What information do you need to gather, what analysis do you need to do, etc.? How should the work be sequenced? Who needs to own each step? Use the key decisions as your anchor points and chart the course to get from one to the next. This course will become your new process.
3. Organizational Structure
Changes to the structure of your organization will most likely be required in order to enable and reinforce these new processes. This organizational transformation needs to be supported by a robust change management program that includes understanding of your current state, drafting a vision for the future and then putting in place a transformation roadmap with all the training, development and communication necessary to get you there. In the end, you need to be able to confidently answer “yes” to the question - “Does my organization enable the right people to get the job done?”
Thinking about decisions from a customer-centric perspective while creating your optimal organizational structure requires your current team to not only change the way they work, but also build some totally new skills. Start by benchmarking where your people are today. This includes determining what skillsets you currently have in your merchandising and planning group, and then identifying what new skills they need in order to operate in the customer-centric world.
You will also need to do a workload analysis to determine if you have the right headcount in the right places. There will potentially be a need for people to transition from one role to another. This will mean identifying who has the raw capability to make that change and then supporting them through that transition. Once this is complete, build a plan for training and development. Finally, determine if you need to hire additional people who bring customer-centric thinking and can help lead the change.
Lastly, you need lots of communication. Organizational change can cause lots of swirl which impacts productivity and can impact people’s willingness to change. Having a well thought-out communication plan to make sure everyone understands the reason for the change and what the journey looks like is imperative. Don’t leave room for guessing and anxiety.
5. Rewards & Recognition
Once you have the organizational structure and people in place, you can then focus on aligning your processes to include rewards and recognition for customer-centric behavior. Incentives are vital to making long-term changes. At the same time, you want your people to be accountable for the business impact of the change, so best practice is to start by including metrics which tie the customer impact to the business results.
Merchants and planners are very familiar with being held accountable for sales and profitability, but you will need to add things like customer engagement, basket size, shopping frequency and return rates, among others. You can see how movement in customer metrics directly impacts sales and profits, but without holding the team accountable for the customer metrics, they won’t have an incentive to make it their primary focus.
Finally, you should track all customer metrics and report them on a regular basis, making it a point to show everyone in the company that these new metrics are just as important as the typical sales and profit metrics that they are accustomed to seeing.
6. Information & Systems
Information and the systems we use to gather and analyze it are the backbone of a customer-centric organization. They enable all of the planning processes to work accurately and efficiently. In a customer-centric merchandising organization, customer information is gathered on an ongoing basis and analyzed to better understand customer preferences and even to predict their behavior. We have multiple sources of customer information, but the key is to find a way to make it actionable.
In order to truly transform into a customer-centric planning organization, you need to have the right systems in place to capture and analyze data and enable the end-to-end planning process. When looking for a system that will enable a true customer-centric planning organization and process, here are some key considerations and features to look for.
- Predict and Plan for Trends. Your system needs to be able to track and maintain customer data and use that data to segment customers and identify, predict and plan for trends.
- Multi-dimensional Clustering. It's not possible to think about every possible customer. You need a system that can cluster customers using attributes derived from the analysis of customer information. However, in addition to customer attributes you need to consider location attributes. The only way to truly do this is through multi-dimensional clustering across many attributes.
- Define Assortments Around Clusters. Once you have your clusters defined, you need a system that can define assortments within those clusters taking into account the customers that are drawn to those clusters and the demand they are driving.
- Combine Analytical Planning with Visualization. Part of a planner’s job is subjective and requires being able to visualize what the assortment will look like. But this needs to be coupled with analytical planning to determine how customers are expected to respond to the assortment and its related pricing and promotions.
- Attribute-based Planning. Understanding what is driving a trend requires analyzing many attributes. So you need a system that can record as many attributes as possible and attribute them to a low level of detail in order to truly identify what attributes are driving what customer trends.
- Omni-channel Line Planning. You need a system that can plan the entire line across different channels, taking into account the uniqueness of customer-centric trends that are driving the performance of products within each channel.
- Allocate in Line with the Assortment Plan. The success of a great assortment plan depends on the inventory being allocated in line with the plan. Your assortment and allocation systems need to be tightly integrated to ensure that the customer-driven assortments are actually delivered to the customers who are going to shop them.
- Retrend in Season. Nothing ever stays the same, so you need a system that can very quickly identify emerging and changing product trends. The system should automatically retrend and change direction based on analytical analysis. But if the change is too vast, the system should present exceptions to planners so they can make strategic decisions on whether or how to follow a trend.
Time to Get Started
Now that you understand the need for becoming customer-centric in your merchandise planning and have the framework for making the transformation, it's time to get started. We encourage you to partner with the right industry and business process experts and technology vendors who understand your company's specific needs and business strategies and can help you make the shift to truly customer-centric merchandising. To learn more contact us.
According to a new report from The Commerce Department, May retail sales beat expectations for the second month in a row. U.S. retail sales increased 0.5 percent in May after rising by an unrevised 1.3 percent in April, lifting sales 2.5 percent from 2015. These new numbers point to strong demand suggesting economic growth was gaining steam despite a sharp slowdown in job creation.
May retail sales at clothing stores increased 0.8 percent, the largest gain since November. Online retail sales shot up 1.3 percent. Receipts at sporting goods and hobby stores jumped 1.3 percent last month. These so-called core retail sales correspond most closely with the consumer spending component of gross domestic product. They were previously reported to have risen 0.9 percent in April. Economists polled by Reuters had forecast both overall retail and core sales gaining 0.3 percent last month.
The fairly strong May retail sales report could see economists raising their second-quarter GDP growth estimates, which are currently around a 2.5 percent annualized rate. The economy grew at a 0.8 percent rate in the first quarter.
Read the entire Reuters article here for more information.
By: Peter Leith, VP of Product Strategy, JustEnough; and Sonia Parekh, Lead Merchandise Planning Consultant, Kalypso
Putting customers’ desires at the forefront of merchandise planning decisions
The trend towards customer-centric thinking within organizations has been underway for nearly a decade, but the emphasis has mainly been in areas like marketing and customer service. As the retail industry continues to grow more hyper-competitive, and the balance of power continues to shift from the retailer to the customer, companies need to focus on customer-centricity in their merchandise planning, just as much as they have in other areas, if they want to survive and, more importantly, thrive. Putting customers first in all aspects of a retail operation – from assortment planning to marketing and merchandising - has become a critical shift that organizations need to make.
Industry experts Sahir Anand, VP of Research and Principle Analyst, EKN; Sonia Parekh, Lead Merchandise Planning Consultant, Kalypso; and Peter Leith, VP of Product Strategy, JustEnough, offer insights and highlight key trends that are occurring in the industry and what that means for retail organizations going forward. These trends all point to the importance of customer-centricity in merchandise planning and the immense importance of having a customer-centric focus at the heart of every process within an organization in order to succeed in today’s retail landscape.
Key Trend #1: Planned Assortment Opportunity Gap
A shift is occurring in customer segments across varied categories and retailers that miss this shift are missing a large opportunity. This “opportunity gap” especially impacts soft lines where lead times can be long, but the cycle time for products can be very short.
This coupled with the fact that consumer spending and confidence is on the rise again has led to the emergence of more customer segments than ever before. Millennials, for example, have immense buying power and expect their desired assortments to be available, which can be completely different product assortments than what other important customer segments desire. These emerging customer segments have and will continue to influence a lot of the assortment mix. A customer-centric merchandise planning organization needs to take into account all of the groups that shop its brand and devise strategies that reach each one.
Key Trend #2: Amazon’s Impact as a Disruptor
Everyone knows Amazon and is impressed by their business strategies and ability to dominate the categories they’re in. However, Amazon is constantly being overlooked by companies as a viable competitor because they don’t have brick and mortar stores. This is a huge mistake because Amazon is a shining example of a successful customer-centric company.
Amazon is a disruptor in multiple areas that affect retail and brand companies and, as a result, is a threat to their business models. Examples of this are Amazon’s rapid expansion of their network for sourcing and procurement in order to expand their product offerings to meet customer needs, their ability to enter and dominate new categories (like apparel) and their ability to build an incredibly strong loyalty program (Amazon Prime). The manner in which they accomplish and dominate each of these areas is astounding and at the fore-front of what the future of the retail industry is going to look like. Their customer-centric strategies enable them to give their customers what they want before they even know they want it and this is something that all retailers – not just eCommerce players – should be paying close attention to.
Key Trend #3: Predictive Analytics
Capturing and properly utilizing the information obtained from predictive analytics will play a significant role in the ability of retailers to embrace customer centricity. This includes the ability to predict customers’ desires and buying patterns, as well as where they shop and why. It is not just causal relationships that are important – all the inventory in the store and all of the assortments have a core relationship with a specific customer segment, type of buyer behavior and type of purchase journey.
The information gained from predictive analytics must influence how retailers approach their strategies for every aspect of their business, such as on-hand inventories and online versus in-store regional assortments. Successful retailers need to employ predictive analytics to map out the customer’s purchase journey and to fully understand the components that drive the customer to the store or website and influence the way they ultimately buy (or don’t buy) a product.
Key Trend #4: Digital
Digital is one of the fastest growing trends influencing customer behavior in retail right now and is ever-evolving. A great example of digital’s relevance as a major trend is last year’s Black Friday when mobile transactions skyrocketed to levels never seen before. The growth of mobile channel transactions in comparison to growth seen in-store and eCommerce is telling – mobile will continue to be a huge avenue in which consumers buy products. Strategies surrounding mobile clearly need to be focused on understanding how customers want to be served.
Key Trend #5: Globalization vs Localization
More and more companies are finding out that their sales are local, but their strategies are becoming global. As retailers are constantly searching for the next way to grow their businesses, it is imperative that they look outwards at growth and expansion. Whether that’s growing through opening stores in new countries, or through digital and other omni-channel avenues, or through international partnerships, the core question remains the same – how can I successfully reach customers in these new areas? Selling locally but acting globally will require a deep understanding of customers in each local market.
Translating Data into an Executable Customer-Centric Strategy
According to a recent EKN survey, 38% of retailers say they find it difficult to plan assortments due to a lack of consumer insights in the merchandising process. The takeaway is that companies are collecting data, but they are either collecting the wrong data, or do not know how to translate the data they have into executable business strategies in their assortments.
Analyzing historical sales by segment to gain insights into the shopping behaviors of those segments is good, but not good enough. Companies must take a 360-degree view of the customer. This means taking into consideration unstructured data.
Knowing the things that influenced consumers to make the purchases they did in-store versus online or on their phones is crucial information that planners and category managers need to understand in order to devise future strategies. This information can translate into the creation of customer-centric strategies in top-down planning, promotions, sales management and overall assortment mix. A 360-degree view of the customer will help companies prioritize where they should put their resources.
Considering the trends referenced above, it is clear that shifting to a customer-centric merchandising approach is not only the right path for retailers going forward, but likely the only path to success. Making that shift, however, will involve a major changes across multiple dimensions of the organization. In Part 2 of this article, we will discuss those dimensions along with the key considerations for driving change.