In case you missed it, we are in a digital revolution and no industry is exempt. Banks, newspapers, travel and retail have to adapt to technology-focused business models with the key driver being changing consumer behavior. Big names that are slow to adapt are being lost.
Range optimization will be one of the most important decisions for retailers in the digital age. Get it right, and you enter a season of trading with buoyant sales and an efficient supply chain. But get it wrong and warehouses are bloated, sales are slow and you feel the pain of markdown and profit dilution.
The changing physical environment is a key driver in the need for intelligent range planning in order to personalize ranges:
- Shrinking physical footprint, and space being turned over to warehousing and concessions requires range reduction and optimization in store
- Supplier integration and no physical constraints online deliver the opportunity for infinite range, but require merchandising capability to personalize the assortment to the individual
Amazon delivers this, and continues to dominate the retail market today for one simple reason; the intelligent use of data through technology. Their mission statement clearly demonstrates their commitment to this and the sole purpose of leveraging this data and technology to deliver a customer centric range online:
“Our vision is to be earth’s most customer-centric company; to build a place where people can come to find and discover anything they might want to buy online”
No category is safe. Amazon’s move in to food retailing with the acquisition of Whole Foods will concern the big players such as Walmart and Tesco. Retailers are responding, with Walmart’s purchase of Jet.com, and Morrison’s tie up with Amazon. The food revolution is coming, and those that do not leverage technology and data to compete with Amazon’s consumer-focused and targeted approach will fail.
The retail maxim of change or die is wholly relevant to range planning, with big changes seen in this space through the explosion of data. The next generation of assortment planning will be driven by the big data revolution:
- The retail landscape is changing, and range planning to meet changing consumer behavior is critical. The next generation merchant needs to adapt to this change and leverage data to deliver consumer centric assortments
- Data continues to expand creating a huge opportunity for effective category management, bringing science to the art of trading. Simple customer focused metrics from growing data sources will enable a personalized approach to range optimization
- Technology needs to be powerful enough to process the data at pace. Big fast data capability that can process this volume of data in real-time will become more important, as merchandising becomes an intra-day activity online and delivers an edited choice, targeted to the individual consumer needs
Merchants that leverage technology to manage and process the vast quantities of data and unlock the power this holds will stay ahead of the competition. In the changing retail landscape, those that apply science to the art of category management will thrive, and survive the retail revolution.
To learn more about our cutting edge big fast data technology and category management tool, read our whitepaper
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