A lot of what’s been written lately about customer experience is focused on topics including customer service, communications, and the customer journey. Merchandising doesn’t come up very often, it seems, alongside customer experience. However, getting product assortment right is a key component of the customer experience: at Mi9 Retail, we believe that a great experience takes place when optimized product planning and inventory management intersects perfectly with skillful customer engagement and point-of-purchase execution.
Overstocks and out-of-stocks cost retailers $1.1 trillion globally in lost revenue, according to a new study from IHL Group (RetailWire)
In today’s global marketplace, consumers have an unprecedented amount of choice. Brands are constantly updating their product lines to keep up with the competition. Retailers are in an incessant battle with the store across the street and across the globe, who are working hard to get products faster and cheaper to the same customers. Many retailers find themselves in an endless cycle of reductions on unsold inventory and new orders of the latest trends.
Customers have grown to expect that they will get the products they want, whenever and wherever the desire to purchase happens to arise. This is even more important if your consumers are Millennials, who are more likely to make impulse purchases than any other generation. (TIME) Brick-and-mortar retailers need to work especially hard to ensure that they anticipate demand as accurately as possible, because consumers can easily order out-of-stock items from the competition’s website if the item isn’t available at the right time, place, and price.
Today’s shoppers are all about convenience. The easier retailers can make the shopping experience in brick-and-mortar store and online stores, the more likely customers will be to return. Out-of-stocks are a significant obstacle to shopping convenience, so it’s critically important for retailers to address.
It’s often said that the key to retail success comes down to three Rs: carrying the right merchandise at the right time and at the right price. This statement is simple enough but can be challenging to execute effectively. Below, we share some questions you can use to self-audit your product assortment in an effort to delight your customers and run your business more efficiently.
The Right Merchandise
Do we have the products that our customers are looking for?
Do we know who our customers are?
Do we have unique merchandise that is in demand in our stores’ locations, climate, etc.?
The Right Time
Have we correctly timed deliveries to match special events or holidays?
Should we bring in seasonal merchandise early for advance selling?
Do we remain vigilant in reducing orders when trends may be ending?
Once we have the merchandise, are we in stock on the things that are selling best?
The Right Price
How do our competitors have this merchandise priced?
Do we know what price our customer can pay online for the same items?
Is the merchandise priced correctly from the outset to ensure we meet our target margin, including sale pricing?
Considering these ten questions will be helpful in highlighting areas of opportunity to improve your merchandising, buying, allocation and replenishment strategies to serve your customers better and run your stores more efficiently.