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VIDEO CASE STUDY: Tilley Endurables gets mutli-channel visibility and saves money too |
MERCHANDISING OPTIMIZATION: NEW PARADIGMS THAT CREATE GREATER VISIBILITY AND PROFITABILITY FOR MID-SIZE CHAINS AND SPECIALTY RETAILERS IN ANY CHANNELKEYS TO PRODUCTIVITY, PROFITABILITY AND CUSTOMER RETENTIONMany mid-size chains,’ specialty and smaller retailers’ major struggle has been, and continues to be, their ability to see their inventory clearly. This lack of visibility becomes especially problematic in organizations with cross-channel retail operations. Mid-size companies operating in a number of countries in multi-channels have an even greater need for crystalline accuracy and global end-to-end transparency as far as their supply chain and merchandising capabilities are concerned. No matter what kind or size of operation, all companies must have uncompromised visibility levels if they are to optimize their inventory investment via their merchandising, staff, activities and business processes. To read the rest of this report, please complete this form:Excerpt from page 1 and 2 of Magstar's Merchandising Optimization white paper:What all retailers want is a way to successfully and most profitably complete the circle of the supply chain – procure; transact; replace. Mid-size retailers can no longer afford to get caught in this circle in January based on December’s activities. They need to be able to successfully adjust that circle, based on seasonality, time of year, and actual store-by-store results rather than simply supply chain conditions. Retailers can no longer afford to rely on prior history just to make sure the norms are being covered. In fact, most retailers didn’t know exactly what their customers buying patterns were, so they’d overstock their stores in the hopes that customers would buy from them. Retailers noted1 they require a solution that will provide them with the right balance between meeting their customers’ demands and the capability to not only overcome their supply chain and merchandising challenges, but that enables them to become masterful, efficient and more profitable merchandisers. They need a solution so they will no longer struggle, make errors, or waste their or their customers’ time. And, they need to be able to see their inventory in any and every corner of their enterprise down to the SKU. They must have the ability to instantly make informed, real-time decisions based on information and trends that they will know are true – an no longer second guess their decision-making or manually perform tasks that can be automated. This report, the first one in a series, will explore how real-time merchandising excellence can be most realistically attained. It helps retailers determine the best ways to ask and be able to quickly and correctly answer the following questions before purchasing decisions are made:
To answer these questions, the particular features and capabilities available in fully-integrated, synchronized, SMB retail-specific solutions will be covered here. This report also explores how retailers can best leverage technology and their human resources to improve not only their visibility and accuracy levels, but to also improve retail store and warehouse productivity, customer satisfaction, and – most importantly in today’s economic climate – profitability. REMOVE OUTDATED RETAIL PARADIGMSTOO MUCH MERCHANDISE. The old paradigm was that retailers – at every level from buyers, to store managers, to senior management and owners – have been conditioned to present their customers with full racks and shelves. The perception was that customers expected this type of presentation of merchandise from them. This seemingly esthetic approach to retailing, includes the underlying consideration by retailers that they have try to appeal to as many customers as they can, and that having a wide selection is one of the best ways to draw them into the store and make their purchases there too. The fact was that most retailers didn’t have the knowledge of what their customers’ buying patterns were, and so they overstocked their stores, stock rooms, and warehouses/DC’s in the hopes that customers would buy from them. Retailers that currently operate from this paradigm have probably learned by now that this can be a very expensive, inefficient and not always customer pleasing proposition. Staff time is thus used inefficiently and tends to be wasted in many of the merchandising and supply chain activities. In the ‘Too Much Merchandise’ paradigm, retailers relied either on information they would receive from spread sheets or from data from their point solutions, most of which lacked sophistication, and maintained information in silos rather than made it viewable enterprise-wide. Most often, this information was also not accurate. Retail decision-makers had to – for the most part – hope that they would have made the right decision many months in advance. Overstocks and sell offs became so common so that consumers expected and even anticipated deep discount sales at the end of any season. NOT ENOUGH MERCHANDISE. Certain retailers responded to the ‘Too Much Merchandise’ paradigm by under ordering. Most knew they could not respond well or accurately to their customers’ buying patterns in a timely way, but were impelled by financial necessity to pare back their stores’ and channels’ offerings. These retailers felt they would save on their inventory costs. Relatively speaking, they left it to chance that their customers would still frequent their stores and not shop elsewhere. They did not have a solid grasp of how to optimally plan and merchandise their stock. For many mid-size retailers, the current generation of this paradigm has been to buy merchandise based on the last few seasons’ performance and customer buying trends. Their merchandising solution likely doesn’t provide them with the needed granularity of information, sophisticated and time-saving automation, ease of use, or real-time responsiveness required to help them differentiate and correctly respond to many types of variables and real customer demands in the current marketplace. This ‘Not Enough Merchandise’ approach can have significant negative financial and customer service drawbacks. Customers will simply look for another retailer who will stock what they want to buy. To read more about the solutions required for these Merchandising Optimization challenges, the remainder of this white paper is in .pdf format and is available for download the here. Contents include:
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