Choice is the new reality in retail. Thanks to the evolving combination of shopping channels, including online, in-store, mobile and social, shoppers now have a wide array of product choices literally at their fingertips. This increased access to information and options has empowered shoppers. After all, who doesn’t want an exciting array of choices in every category you shop, especially if you don’t have to leave your house to make a purchase?
The pressure is on for brick-and-mortar retailers to elevate the in-store experience if they want to stand out in this crowded marketplace and remain competitive. So how do you attract shoppers into your stores and encourage them to keep coming back? The challenge is for retailers to deliver the product assortments their customers want — on a store-by-store basis. Because, after all, a happy customer is a repeat customer.
This process, however, is not as easy as it seems. Think about retailers in an area with a high concentration of college students. Not only does a retailer in this environment have to change out merchandise by season, but different neighborhoods will want very different seasonal merchandise. Think hipster versus middle-aged dads. It is this level of assortment localization that is essential in remaining competitive.
Of course, creating localized assortments is just the first step. Not only do you have to create assortments that reflect local tastes and preferences, but you also need to be able to adjust these assortments to reflect the ever-changing needs of your shoppers. Trends are forming and expiring ever more rapidly, requiring frequent adjustments. Think about “fast fashion” and the increased frequency of new “looks,” or how short the shelf-life is for products with tie-ins to holiday entertaining or back-to-school “seasons.”
The next step is to create planograms to present your localized assortments in the most effective manner to drive sales. Given that the localization criteria can vary significantly by store groups or region, this presents a major increase in complexity for an organization. Delivering on these localization requirements can substantially increase the number of planograms required, and most companies do not have the resources to manage this. Instead, industry leaders have turned to sophisticated category management technology to automate the planogram process, which enables them to produce thousands of consumer-centric planograms in less than an hour. Without automation, this process would take weeks to accomplish manually.
Sophisticated category management technology can also take into account consumer insights, market data, forecasts and sales history to determine which product assortments to offer – and how they should be presented based on merchandising rules and space allocations – in each store. Companies that can harness data from shopping loyalty cards, social media and shopping related apps, will have access to even more insights to drive their localization efforts.
As retailers increase their footprints in new markets, they will need to be able to scale their category management programs quickly. Speed to market will be a key differentiator going forward, as the faster a team can be up and running, the faster ROI will be realized. This creates a win-win situation for both the retailer and the customer.
Learn how JDA’s category management solution can help your organization drive profitable growth.