Meeting the Need for Personalized Shopping Experiences with Category Management

We’ve read about it, and we’ve listened to presentations about it. Localization of assortments is more than just a buzzword or trend; it is a key driver that will help you increase sales, margin and loyalty. The assortment, in today’s “me commerce” environment, has become a way to differentiate your business from the competition and better meet shopper expectations.

In the past, assortment decisions were simpler: category managers had fewer product variations to consider (i.e., one type of laundry detergent compared to the many scents and sizes available today), and assortments were updated just once or twice a year. Even assortments driven by a group or cluster of information (such as demographic or purchasing similarities) still lacked the level of personalization needed to identify local preferences and engage important strategic customer groups.

The future of assortment management will rely on the retailer’s ability to identify the key product attributes or specific characteristics that drive local preferences and demand. To make the right strategic and tactical decisions, retailers need to leverage consumer analytics to understand which customers are shopping and how their behaviors are impacting sales in each category.

This will require a shift in thinking. Assortment management can no longer be viewed as a collection of products, but instead must be centered on how these products will enable consumers to have their needs fulfilled. For example, in a category like Health and Wellness, will products that are not only gluten-free but also organic drive buying decisions?

When getting started with assortment localization, following are a couple of questions to consider.

What initial steps should I take to enhance my localization processes?

  • Understand your customers, both your current customers and those in the future.
  • Apply predictive analytics to your assortment process. It is no longer just about the past, but it is also about anticipating what will happen in the future.
  • Adopt a collaborative assortment planning model that involves your suppliers, merchandise planners and data miners.
  • Understand your customer segments and their overall value:
    • What kind of customers are they?
    • Are they loyal?
    • Are they valuable?

Does localization mean different things for different companies? Yes, it does!

How you structure your localization processes will depend on several factors such as:

  • What you sell
  • What brands you represent
  • What the right level of localization is for each category
  • What your cost to serve is, compared to what the benefit of localization is to the retailer and the consumer
  • Where you are located and how you can better understand your consumer segments

Getting merchandise assortments right the first time is crucial to shopper satisfaction, as well as profitability. It’s now possible for category managers to not only create customer-centric planograms, but to also unite retailers and manufacturers together in the planning process for more granular, localized assortments every time. New capabilities in JDA’s Category Management solution enable a more agile, proactive planning process that can take into account shifting market dynamics and refine plans on the fly.

Key enhancements to JDA Category Management 2017.1 include:

  • Improved assortment collaboration
  • Consistent user interface
  • Localized space plans and what-if scenario planning

Of course, assortment localization is just the beginning step to make sure that your consumers’ needs are being met. Greater supply chain visibility is another key to your assortment planning process. You’ll want to consider the following:  

  • How do I optimize my manufacturing and transportation networks to support localization efficiently while minimizing additional cost to my network design?
  • How do I ensure merchandise is delivered on time to the right locations – not just to the store, but also to the shelf, while ensuring operational efforts are still focused on the customer?

In this age of digital disruption and Internet of Things, consumers are demanding to be recognized and treated as individuals. Fulfilling your customers’ need states through an enhanced assortment process will put you on the path to competing more effectively and getting to market faster. Learn how JDA can help you meet the ever-changing needs of your consumers today and in the future, so you can make localized assortments the priority in your merchandising strategy.

Planning to attend Shoptalk 2017, March 19-21, or the Category Management & Shopper Insights Conference, May 15-17, in Las Vegas? Be sure to stop by and meet with JDA while you are there!

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