The Assortment Paradigm Shift

In an ever-changing retail landscape, the idea of building a perfectly aligned, customer-centric assortment is every merchant’s dream. The question, however, is whether this is really possible, or just a mirage on the merchandising horizon?

After decades of retail industry process and tool development, the approach taken towards creating an assortment hasn’t really changed, at least not by any needle-moving significance. The fundamental principles of building a product assortment, whether through historical performance analysis, product trending, competitor activity comparison, merchant experience or gut feel, and the alignment of products to store groups that have similar trading patterns are still relatively common.

The true “elephant in the room” is that in an age of advanced technology, this traditional approach to assortment creation is still extremely product-centric and subjective.  This approach relies on the merchant’s ability to develop or pick the right product for the customer, and the merchandising team’s ability to get it in the right store.

The question that haunts each and every merchandising team is how to take a process that seems more “black art” than science and develop a truly advanced customer-centric methodology where the customer determines the product they want to buy rather than the merchant selecting what they think the customer wants.

The answer to this question requires blending the art and science of merchandising to create consumer-focused profiles. By leveraging the data on how, what, and when the customer interacts with the retailer, whether in-store or online, profiles can be developed to map the customer’s preferences and behaviors.  Imagine if every line in the assortment could be validated by the retailer’s own customers, improving the retailer’s ability to deliver to their needs and wants consistently and efficiently.

By introducing this type of assessment into the assortment development process, the process changes from product-centric planning to a customer-centric shopping list.  Products that specifically address each of the various consumer segments can be defined through analysis of the data we all generate on any given day through our transactional and digital interactions with retailers.  With this information it is now possible to understand the variety of purchasing patterns consumers exhibit and create assortments to satisfy their needs and wants.

This dramatically changes the assortment process.  Merchants can now buy what their customers are looking for rather than just accepting the risk that a high proportion of the season’s range may be off the mark, costing the business sales, profitability and consumer confidence in the retailer’s brand. The perspective of the assortment process changes from being merchant driven to a customer profile alignment activity that, when coupled with a store clustering, achieves the ever-elusive goal of localized customer-centricity.

The final piece of this innovative approach to assortment development is to provide the merchant the ability to visualize the consumer-ranked items in coordinated stories of merchandising relationships. At this point merchants may be thinking “that’s just common practice, we do that all the time.” That may be true within the various lists of products that are generated during the assortment process, however, there is still the ultimate desire to visualize products together in collections, especially in fashion.

This requirement has been met in various forms over the years, from simply laying products on the floor or hanging garments on grid-walls around the office, to creating storyboards of captured images. When you incorporate the advanced technologies available today, however, retailers can begin to deliver a true step-change to this requirement.  This can replace that elusive mirage with something real—an ability to utilize product images in a collaborative format, creating coordinated collections on the fly within the assortment building process, and the ability to ensure each of the product stories align with the identified needs of the retailer’s customer profile segments.

For more information on how to create these customer-centric assortments, access JDA.com/Retailme or read our press release here.

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