One of the things that makes retail particularly fun for me is that we are all the benefactors of the work we do. We are retailers, yes, but we are also consumers. We plan business and buy product, but we also purchase that same product or the products that come from other planners, buyers and designers.
So, it’s a bit strange when I talk to retailers and ask them these two questions: If you think of your favorite place to shop, do you buy everything there? If not, why not? Inevitably, the answer to the first question is no, and the answer to the second question is “because they don’t have everything I like.”
If you are saying that about the places you shop, there is a pretty good chance your own customers are saying that about you. Why don’t you buy your pants, shirts, jackets, and shoes from the same place? Why do you buy meat from one place, produce from another, and sundries from a third?
Now think like a retailer again… what would be the impact to your business if you could just get one customer in 20 to buy just one more thing every time he or she visited your store? You should all be having visions of glory at this time.
Here’s the thing… your customers are waiting for you to do this… in fact, they are demanding it. It’s a rare shopper that has time for the here-and-there shopping habits of the past. And based on the shopping habits and expectations of my two twenty-somethings, the millennials have even greater expectations, and less patience. My daughter has four or five key places she buys clothing – split about 50/50 between online and brick-and-mortar. She used to have more, but has given up on them – she can’t find what she wants. And she wants it all. And you know what—she (and you) should have it all!
We retailers have created the problem, by the way. It’s not them, it’s us… our merchandising organizations are fractured across product categories and/or channels, and cross-category collaboration is rare. You may say, “But Steve, we get together at the beginning of the year to plan our programs.” And many of you do! But do you align shipping, promotions, markdown and profitability analysis, and most important, offers to your customers? Do you know what kind of customers you have, and tailor cross-category collections to each type of customer?
It’s just too hard to do all that, right? And it’s really bad if one of the categories is down-trending and cuts in deliveries have to be made… “What did I buy those trousers for? Oh, yeah, that collection… well, I have to make my OTB, so I’m just going to cut back on that shipment.”
Yes, it’s hard under our current organization alignments and siloed business models. But all you are looking for is the ability to change one in twenty customers, and that cancelled shipment may have made all the difference.
At JDA, we are thinking a lot about how you can better meet your customers’ expectations. We are thinking about how to create collection-based assortments, targeted at different customer segments, that can be evaluated and scored based on the affinity of all the products in the collection. We are looking into how to keep the integrity of the collection, yet support today’s category-oriented merchandising structure. And we are working on ways to recommend specific store and channel groups to which to send those customer-targeted collections.
If you have been reading about Retail.me, JDA’s next-generation google cloud retail planning solution, you already know that we have used our in-house developed data science to identify customer segments and score assortments of the same category against their buying behaviors. If we can do that, then how much of a step is it to score an entire collection? Turns out, not much. Furthermore, if we know the products in a collection, can’t we keep merchants aware of the impact of changes to one of the components on the entire collection?
There are a lot of retailers out there struggling to find the “magic of the millennials.” I don’t think it’s that much magic, and I also don’t think it’s just millennials. It’s always been about loyalty – and people who say millennials aren’t loyal are missing the big picture. They are fiercely loyal, but to a complete customer experience that includes buying more products at the same time from the same place.
It used to be conventional retail wisdom that you could disappoint a customer three times before they left you. Today, it’s once, or if you are lucky, twice. Your customers want you to have everything they want, all in one place. They expect you to know them and to build collections for them. And you should expect software to assist you in doing that.
One in twenty customers – think of the glory, think of satisfied customers, think how happy you will be, both as a retailer and as a shopper!