If you’re responsible for merchandising, your job is really complicated these days. You’re facing a retail environment unlike any we’ve ever seen. It’s exciting, but it can also be overwhelming.
Retail brands are expected to sell through multiple channels. They are expected to provide a consistent experience across them. But, this puts a heavy burden on the merchandisers who are responsible for architecting that experience.
This article will summarize today’s merchandising challenges and provide tips for overcoming them.
Modern Merchandising Challenges
Retail brands face unique challenges in 2015. It’s critical to understand what those are, and how they change what you’ve been doing for decades.
Retail is going multichannel.
The retail brands that are most successful are able to execute a multichannel strategy, diversifying where and how they sell to customers.
If you’re a retail store only or eCommerce website only, you’re potentially missing out on big opportunities to grow. Selling in marketplaces, like eBay and Amazon, opening your business up to wholesale channels, and other channel expansion opportunities unlock new revenue streams for all kinds of brands.
That means brands need to adjust their merchandising strategies to account for channel expansion. Inventory management, product sourcing, and product cataloging all become more complex, when the business is distributed across channels.
Bridging Online and Offline
The necessity to be multichannel fuels another modern merchandising challenge: the need to bridge online and offline experiences.
30 years ago there was no such thing as “online” or “offline”. There was just retail–there was just selling products. Now it’s critical that brands think about how to expand via digital channels and traditional “offline” channels.
The challenge is to do so without sacrificing brand integrity and without creating a Frankenstein of systems and operations.
Unifying Your Brand
This fragmentation of customer touchpoints makes it harder to build a consistent brand and customer experience.
Customers don’t see you as a website and a store separately. They see one organization–one brand. They expect that every interaction with your brand, through any touchpoint and during any part in their customer journey, is consistent. They expect the same experience everywhere.
It’s up to you to ensure that your brand isn’t fragmented across the different channels in which you are now required to operate.
Multichannel Merchandising Tips
Given the challenges of the modern retail landscape, here are some tips to help you thrive:
Understand the basics of website development.
If you’re deploying a true multichannel strategy, you’re going to be selling in both offline and online channels now. An online channel might be new territory for you. It’s going to extend what your job encompasses. But, if you don’t own both of these channels from the beginning, your customer experience is going to suffer across all your touchpoints.
Merchandisers must contribute to defining the online experience, just as they do the brick & mortar store experience. They will work with web developers and consultants to handle the technical aspects, but it’s the merchandiser’s job to ensure the experience is consistent with the overall brand.
Therefore, it’s incredibly useful to understand the basics of web development–the things your web developers will be worried about. Information architecture, content strategy, and SEO are the tools of the online merchandiser, just as store displays and layout are the tools of the offline merchandiser. Here are some easy resources for getting started:
- Content Strategy for the Web by Kristina Halvorson is a short and sweet book on the basics of content strategy. It’s easy for someone with any background to digest.
- Moz Beginner’s Guide to SEO will give you all the basics you need to understand search engine optimization.
Centralize product information management.
As eCommerce started to emerge it was common to see businesses completely isolate eCommerce operations–different stock, different product information, different team. The results were rarely good.
When you try to buy from these brands, it’s obvious they haven’t thought about a cohesive online-offline experience. Store employees have no idea what kind of products or stock are available online. You can’t check the website for a product’s availability in your nearest store. The two parts of the business act almost as two different companies.
You can’t allow your customer experience to fragment across your different sales channels, like this. As a retail brand, one of the most important parts of your customer experience is your product data–not only what products you sell, but how they are described to customers. You can avoid this multichannel experience fragmentation by centralizing your product data, then distributing it to channels as appropriate.
By maintaining one master catalog of products, enriching the data in that catalog, and centralizing your inventory, you are able to publish information out to different sales channels, exactly as is required. (The technology you need to do this is called Product Information Management, and we’ve got a great one for you.)
Product data can be an incredible asset or a heavy burden. It’s up to you to decide which it is for you.
Build an agile supply chain.
Distributing your business across multiple channels can make supply chain management pretty complex. Without managing this complexity you increase the chance for stockouts or excessive inventory. To thrive as a multichannel business, you need to adopt new strategies that create an agile supply chain.
Look for opportunities to build a supply chain that gives you room to react to your market, quickly. That might include:
- Sourcing smaller quantities of inventory more frequently
- The ability to drop ship orders for third-party order fulfillment
- Favoring Lean or pull-based sourcing, over making huge purchases based on forecasting
Mismanaged supply chains are why you end up with a whole bunch of stuff you need to sell at a discount. Almost any market moves quickly. Your reaction simply cannot be limited by an inflexible supply chain.
Some of this may be beyond the merchandiser’s control. But, at least be able to articulate these challenges to the supply chain managers and operations VPs of your organization. They need to understand the supply chain’s impact on merchandising.
Use digital technology in the store.
You should absolutely incorporate visual merchandising best practices when setting up a brick & mortar store. (Nicole and Retail Minded has some great ones, here.) But, you can take it even further by incorporating digital technology into your store experience.
Many retailers have started to use digital kiosks in the store. This gives the customer an opportunity to browse your full product catalog, even if you don’t have it all in the store. It also helps free up sales associates in a busy store. It links your online experience with your offline experience.
If you don’t have the budget or need for digital kiosks, you can still use technology to improve the store experience. Ensure your sales associates have access to your product catalog and inventory information. If a store doesn’t have something in stock, they shouldn’t have to call other stores looking for it. They should see that inventory right away and be able to get the item to the customer, quickly and efficiently.
Think about how your merchandising processes and the technology that supports them impact the customer experience. Then make the necessary changes to build the experience you want.
Measure twice, cut once.
Use analytics to measure everything you do as a merchandiser. There is too much opportunity for real measurement to make merchandising decisions with your gut alone.
You should constantly evaluate your performance as a whole and through individual sales channels. You should understand what products sell best and where they sell. You should make data-driven decisions about your merchandising strategy.
Business intelligence tools can be as simple as Microsoft Excel or as complicated as massive enterprise data platforms. What works for you depends on how big and complex your business is, but it’s most important to make a distinct effort to measure your merchandising outcomes.
It’s all about product data.
Most of the challenges for the modern, multichannel merchandiser begin with product information. If you don’t have product information management right, all of the rest of your business starts behind the curve.
The following are more articles with tips and ideas about product information management:
- Why Product Information is Vital for B2B Selling
- Why You Should Use a PIM as Your Item Master
- How Product Information Management Solves Common Problems With Your Clients’ Product Data
- Multichannel Retailers Need to Rethink Merchandising
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