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"IBM/NRF 09'"
INTERVIEW WITH CHRIS HENDREN
TITLE: Customer-Centric Merchandising – 2:57
Customer-centric merchandising and demand driven supply chain is one of the three major imperatives for retail.
Successful retailers, have a number of elements that make up customer-centric merchandising, and demand driven supply chain.
One of those is tailored merchandise assortments.
The second of these, is systematically infusing customer insight into all your business decisions.
The third of these is pricing and promotion tailored to specific customer preferences and locations.
Another of these is optimizing supply chain to deliver merchandise to the customer, or the store location, wherever it's really needed.
And finally, one of the more important elements is to provide visibility across all channels, to be able to see where the product is, see where it isn't, and to be able to react in a meaningful way.
When we used to talk to customers about tailoring merchandise assortments, we used to talk about moving away for national assortments. Now, most retailers today are well beyond that.
So this means as merchants are building assortments, they're thinking about the customer in doing it.
They're thinking about the range of products that will most appeal to that specific customer segment that's important to their business.
And they're also considering the specific locations or groups of locations, should say cluster of locations, that they're actually going to be assorting to.
When I think about infusing customer preference and demand into decision making, I think about how that used to be done in retail, and how-- some retailers still do it.
They look historical results. They’re comparing to last year.
How this really should work is a merchant-- looks at his assortment, and decides to drop a-- a reasonably performing item-- because, he understands that that sales are going to transfer to another item. And so, in reality, he loses no business, his turnover goes up, and he's got space on the shelf to introduce new merchandise.
The benefits for the customer are pretty straight forward. It's the products and services available when, and where they want them. It's also the ability to shop when and where, and however I want.
And lastly, it's really about, being able to have the products delivered, picked up, you know, or returned wherever and whenever I want.
So, the benefits for the retailers, it's about profitable sales growth. It's about higher gross margin, and lower inventory investment, higher turn over. And lastly, it's really about lower IT costs.
Ultimately it's about connection to the retailer's brand, so that both the customer and the retailer are confident of two things. The customer is confident in the shopping experience, and second, the retailer is confident the customer is going to continue to shop.