How to Leverage Technology for Retail Merchandising Success
Retail Tech Insights | Friday, August 23, 2024
Some of the highest priority areas of sourcing and merchandising include bringing an end-to-end cost view to optimize the business, creating a high-tech innovation function, and viewing a business via a consumer lens.
FREMONT, CA: Technology will continue to influence retail management in the future by giving consumers a customized, multi-touchpoint purchasing experience and quickening the innovation cycle. It might be challenging to gauge the rate of change, spot fads from trends, and choose the best technological investments. Retailers need to concentrate on sourcing and merchandising to be competitive, as supply chain disruption and inflation affect consumer finances. The dangers associated with economic and geopolitical variables, the expansion of discounters, and the rise in labor and energy prices can all be lessened with the use of technology.
Priority areas for technology in merchandising and sourcing
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Bringing an end-to-end cost perspective to optimize the business: Like an autonomous vehicle, where destination input results in effective navigation, strategic goals and daily activities will be intricately entwined in the highly automated world of tomorrow's sourcing and retailing. It takes precise instructions to accomplish this. Making educated judgments requires an understanding of cause and effect, especially when it comes to how sourcing and merchandising impact cash flow and the bottom line. These insights are currently restricted to derivatives or gross margins.
Developing a high-tech innovation function: When it comes to developing successful direct-to-customer strategies, retailers outperform fast-moving consumer goods (FMCG) companies. To obtain a better understanding of consumers' behavior and unmet needs, retailers should combine human imagination with technological technology. Behavior data analysis can assist in detecting gaps in customer decision trees and uncover unmet demands. AI technology can search external data for unexplored trends; however, human ingenuity can improve discoveries. Retailers may implement these ideas by investing in solid product management procedures and partnering with critical suppliers on R&D support. Innovative items can help merchants differentiate themselves from discounters, establish client loyalty, and give unique options.
Viewing a business via a customer’s lens: Personalization in marketing and consumer segmentation is no longer sufficient; a true customer perspective is becoming increasingly vital. Retailers must prioritize customer acquisition, development, and retention (ADR) and identify the unique "best action" for every customer to advance them through the ADR cycle to truly embody customer centricity. By incorporating ADR insights into fundamental merchandising decisions, creating a "personalized next action" capability, and offering new services like personalized apps for budget management, health, cooking, and sustainability, retailers can leverage customer insights to grow their business.
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