Assortment Planning in 2015
Listen to Your Customers for Better Decision Making
The Detail of Retail
Many retailers are still trying to make the correlation of social media to their assortment planning.
There is no question – social media provides enough information and data to send a report junkie to the emergency room. But still, some of those skilled in advanced analytics struggle to turn this data into action that will increase sales and margins, reduce store and total inventories, and in short, grow the total retail business.
Retailers do need to continue to monitor historical sales, margins, promotions, and in-stock (after all it is still an item business, and always will be). Of key value is customer behavior and CURRENT signals being sent from web commerce and social media! Merchants should not be intimidated by the science, granularity, detail and expansiveness of the data!
Signals could be a simple as customer “likes” on a new fashion color presented in Facebook. This could/should result in planning of a color that would have previously planned at 2% to an increase of 10% contribution of a key style. The impact on sales and margin is synergistic! It’s all about having the right style, color and size.
New technology discovery tools ENABLE this kind of decision making, making it easy for merchants to find actionable data (as opposed to nice-to-know data). Merchants no longer need to engage IT and be put on a waiting list!
As always in assortment planning, it is a good idea to hold dollars in “Reorder Reserve” to allow Open to Buy dollars for late (after assortment) developing trend items.
In the future, the challenge to retailers will be to accept and embrace “exceptional” rather “incremental” growth.
Those that accept exceptional growth will become “global players”. Those that chose mediocrity or stick with the status quo, will likely be part of the “retail acquisition craze”, more on that to come later.
What are your thoughts?