This is the fourth article in our series based on a research report JustEnough recently sponsored with Boston Retail Partners into the current state of the industry around Merchandise Planning which uncovered strategies that retailers can focus on to enable effective planning in today’s omni-channel world.
We will continue to look into the elements the survey found that retailers can focus on to enable effective planning in an omni-channel world. Please contact us, if you would like to learn more about how JustEnough solutions are helping leading retailers to successfully plan for their omni-channel operations.
Here is part four:
Enhanced customer insight
The quantity of data available to retailers has never been greater. Retailers have access to more customer, enterprise and public data than ever before. Customers are increasingly interacting with retailers in a highly digital manner via online shopping and social media. These interactions produce valuable sets of data that can be instrumental when predicting demand and informing buying and planning decisions. Knowing the customer better than the competition empowers retailers to create personalized promotions and marketing campaigns to drive sales and enhance customer loyalty.
Social media provides retailers with unprecedented visibility into their customer base. It provides a venue in which retailers can directly communicate with their customers and it is an extremely powerful tool for collecting and using customer insights to improve planning decisions. Retailers can understand who the customer is, what she wants, when and where she wants it, and even why she wants it based on social media postings and feedback.
Social media analytics refers to the assessment, examination and interpretation of the interactions and associations of people, topics and ideas among social media sources such as Facebook, Twitter, Google+ and Instagram. Observing and analyzing social media discussions and trends across many individuals and communities is often referred to as “crowdsourcing.” Social media crowdsourcing is a powerful tool that can be used to discern customer sentiment about a retailer’s products and services and offers retailers the ability to identify customer shopping trends. Retailers are beginning to access this plethora of customer insight available for merchandise planning purposes.
The challenge with social media analytics is that it is still relatively new. Therefore, there are very few “tried and true” tools and best practices for retailers to use as a guide. But with the benefits of customer insight to help align demand, sell-through merchandise, localize assortments and target pricing and promotions, the value of social media analytics can be significant.
Currently 71% of retailers indicate that they capture customer feedback via social media. However, retailers are still just scratching the surface when it comes to leveraging social media content for planning purposes.
Product development remains the biggest area for social media data utilization with 23% currently utilizing it and 29% planning to use within two years (Exhibit 8). It is interesting that many retailers don’t see the value in utilizing social media data for allocation assistance (only 31% have any plans for utilizing social media data in assisting with allocation), as understanding customer insight would seem to be important for re-allocating merchandise.
Exhibit 8: Social media to facilitate planning
More than half of the retailers surveyed utilize social media data for competitive shopping while only 41% utilize social media data for pre-season planning (Exhibit 9).
Exhibit 9: Social media data usage
Social media represents a huge opportunity for retailers to be more customer-focused in their planning. Driving merchandise decisions based on customer desires and needs should improve the chances that retailers will buy and stock the merchandise that customers want to buy.
You can read the complete BRP 2015 Annual Merchandising Planning Report here.