Range optimization will be one of the most important decisions for retailers in the digital age. Get it right, and you enter a season of trading with buoyant sales and an efficient supply chain. But get it wrong and warehouses are bloated, sales are slow and you feel the pain of markdown and profit dilution.
A fashion retailer losing 10% of revenue to markdown could see significant sales increases from just a small reduction in this figure.
The changing physical environment is a key driver in the need for intelligent range planning in order to personalize ranges:
1. Shrinking physical footprint, and space being turned over to warehousing and concessions requires range reduction and optimization in store
2. Supplier integration and no physical constraints online deliver the opportunity for infinite range, but require merchandising capability to personalize the assortment to the individual
As assortment explodes online, retailers want to offer broad choice to their customers. However, supplier integration and vast choice often results in lower conversation, as customers struggle to find the items they need if the first two pages they hit do not inspire them. At method we don’t believe in range reduction, we believe in range personlisation.
In a digital age, and especially in high frequency sectors, customers expect you to know their preferences and interact with them accordingly. The next generation merchant needs to adapt to this change, and leverage data to deliver consumer centric assortments. Digital channels will be critical to deliver personalised assortments to individuals helping them find what they want quickly, at a price they want to pay.
The new data driven approach to assortment planning
In this omnichannel world, retail is no longer about static ranges, with periodic rules based sort order reviews during a fixed period. The right product, at the right price, at the right time has never been more crucial. Ranges need to be tailored to the individual through adaptive search and an optimized sequencing. Speed of insight is key This new model requires flexible, fast and data driven range optimisation.
Technology will empower merchants with key insight, delivering the next generation of assortment planning and merchandising.
The benefits of lightning fast basket analytics
Within retail there are generally understood best practice methodologies for Category Management. However, the heavy data processing required to undertake these analytics often restricts the types of insight into seasonal or even annual updates that merchandisers rely on. The inability to run customer centric range analytics regularly is removed with our affinity based solution.
Method’s personalisation solutions unlock this potential, as we provide customer-centric metrics in real time, to deliver a dynamic approach to merchandising and assortment planning:
1. Enables merchants to make customer-centric range decisions, by converting vast data volumes in to simple and actionable outputs
2. Supports edited choice in-store, creating more cost effective operations
3. Targets broader ranges online to meet consumer needs through hyper-merchandised websites delivered in real-time
The biggest challenge for retailers under sales pressure is to avoid short-termism. Supplier funded short term offers, sales and stunt deals will only support sales growth for a short period of time. Retailers that deliver genuine range personalisation to convert both loyal customers, and attract new shoppers will deliver long term success. Customer-centric data driven decisions that leverage both historical and real-time data can help retailers achieve this goal.
Merchants that leverage the vast quantities of data and unlock the power this holds will stay ahead of the competition. In the changing retail landscape, those that apply science to the art of category management will thrive, and survive the retail revolution.
To learn more about our range personalisation solutions, get in touch.