MER­CHAN­DIS­ING 20

STRATE­GIES FOR RE­TAIL PLAN­NING SUC­CESS

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In the last few years, we have wit­nessed enough dis­cus­sions on om­nichan­nel strate­gies, dig­i­tal strate­gies from a mar­ket­ing lens, cus­tomer loy­alty, and shop­per ex­pe­ri­ence. Yet, the fo­cus on Buy­ing and Mer­chan­dis­ing strate­gies in the new world has been vir­tu­ally nonex­is­tent. In this ar­ti­cle, we ex­plore the chal­lenges faced by the B&M teams, the strate­gies they de­ploy to en­sure that prod­ucts fly off the shelves, as well as their per­spec­tive on the role of B&M in the fu­ture - what will im­pact it and how it will change.

PROD­UCT THE HERO It is a known fact that with­out a great prod­uct, no amount of mar­ket­ing, ex­pe­ri­ence build­ing, or vis­ual mer­chan­dis­ing will help a re­tailer grow.

Re­tail­ers are un­der tremen­dous pres­sure to­day. They are con­stantly plagued with chan­nel pro­lif­er­a­tion, fickle con­sumers, in­creas­ing price sen­si­tiv­ity and lack of brand loy­alty. To at­tract new cus­tomers and en­sure that the ex­ist­ing ones keep coming back, re­tail­ers must un­der­stand their con­sumers thor­oughly. They must keep abreast of what they like or dis­like, the trends they fol­low, their shop­ping pat­terns in or­der to be able to align mer­chan­dise ac­cord­ingly.

We asked some Buy­ing and Mer­chan­dis­ing prac­ti­tion­ers to talk about the unique

B&M strate­gies they ap­ply to both, de­light con­sumers as well as turn them into brand loy­al­ists by keep­ing them coming back for more. Here is what they had to share.

WIN­NING STRATE­GIES 1. Cus­tomer-cen­tric­ity:

Con­sumers will con­tinue to be the voice that dic­tates; re­tail­ers must be pre­pared to lis­ten. They must be­come more at­ten­tive, even pre-emp­tive to con­sumer needs. The voice of the con­sumer will be cen­tral to all de­ci­sion mak­ing across all func­tions, es­pe­cially B&M, if the or­ga­ni­za­tion in­tends to achieve its goal of be­com­ing a cus­tomer-cen­tric.

Al­most every one of the B&M prac­ti­tion­ers be­lieves that suc­cess is dif­fi­cult un­less the con­sumer is at the heart of B&M de­ci­sion mak­ing. Dif­fer­ent re­tail­ers use dif­fer­ent meth­ods of stay­ing in touch with the con­sumer but the in­for­ma­tion they seek is the same: i. What the con­sumer wants and de­sires and

mar­ry­ing the prod­uct to those needs ii. Un­der­stand­ing their buy­ing be­hav­ior iii.their pur­chas­ing power and choices at a

catch­ment level The de­sired ob­jec­tive: to en­sure a seam­less fit be­tween prod­uct, con­sumer needs and de­sires, and as­sort­ment op­ti­miza­tion on the ba­sis of cus­tomer buy­ing be­hav­iour.

Gau­rav Jadli, Head of B&M, Arvind Life­style Brands Ltd. be­lieves, “Be­ing close to the re­tail shop floor is very im­por­tant to un­der­stand the mar­ket and the con­sumer. I have been fol­low­ing this strat­egy since the early years and it has re­sulted in get­ting good con­sumer in­sights to take the right de­ci­sions.”

Sud­hir Gupta, Head of Buy­ing and Mer­chan­dis­ing, ITC Lim­ited – Life­style Re­tail­ing, sums it up suc­cinctly. “The B&M strate­gic fo­cus has shifted from iden­ti­fy­ing trends to in­ter­pret­ing the same into prod­ucts which marry con­sumer needs, deeper data an­a­lyt­ics and con­stantly work­ing on new ideas to cre­ate ex­cite­ment through prod­uct dif­fer­en­ti­a­tion. The re­sult of th­ese gives the con­sumer a rea­son to visit again and again.”

2. Fresh­ness and Rel­e­vance of Mer­chan­dise:

No longer does the “4 col­lec­tions in a year” ap­ply – es­pe­cially to the fash­ion cat­e­gory. The con­sumer is get­ting more in­formed and fussier and de­mand­ing changes more fre­quently than brands can cope with. As a re­sult, the brands are of­fer­ing the same mer­chan­dise us­ing var­i­ous imag­i­na­tive strate­gies – from new and in­no­va­tive fab­rics, to new graph­ics, prints and em­bel­lish­ments. Or, as in the case of Crocs In­dia Pvt. Ltd., by ex­pand­ing the port­fo­lio from uni­sex to specif­i­cally for him and hers.

Nis­hant Pod­dar, CMO, Uni­ver­sal Sportzbiz Pvt. Ltd. says, “We en­sure that a lot of fresh­ness is main­tained on the shop floor with the in­tro­duc­tion of fresh op­tions every fort­night.”

3. In­no­va­tive and Dif­fer­en­ti­ated prod­uct:

There is a def­i­nite shift to­wards in­vest­ing in dif­fer­en­ti­ated fab­rics, as well as adding a new­ness to the prod­uct in each sea­son.

Leela Kr­ishna, DGM,

Buy­ing and Mer­chan­dis­ing, Ray­mond Ltd. speaks of the rapid changes hap­pen­ing at Ray­mond, “We are mov­ing to­wards cus­tomer cen­tric­ity by fo­cus­ing on cus­tomer needs and in­no­va­tions re­sult­ing in new age fab­rics like the techno se­ries (fea­tures UV pro­tec­tion, easy care, mois­ture man­age­ment, anti-mi­cro­bial and stain re­sis­tant fab­rics). An­other ex­am­ple is Imola fab­ric crafted from su­per 100’s with rich­ness of de­sign clar­ity.”

4. In­ven­tory Man­age­ment to en­sure avail­abil­ity with no stock outs:

A great prod­uct that is not avail­able does not have any mean­ing. Each of the re­tail­ers works to­wards en­sur­ing that the right prod­uct is avail­able at the right time, in the right size at the right place. To en­sure this, a lot of in­vest­ment and plan­ning at the back­end is crit­i­cal to en­sure avail­abil­ity al­ways. Vishal Dubey, Na­tional Re­tail Man­ager, Lee Cooper, be­lieves that the key dif­fer­en­tia­tor that B&M brings to con­sumers is the metic­u­lous plan­ning which helps to achieve bet­ter sell through. This al­lows in­ven­tory to ro­tate faster and cre­ate fresh­ness in-store. San­jali Giri, GM, Quest Re­tail Pvt. Ltd (The Body Shop) re­it­er­ates, “The prod­uct life cy­cle man­age­ment plays a key role in driv­ing cus­tomer ex­pe­ri­ence. En­sur­ing avail­abil­ity of the right prod­uct at the right time at a com­pet­i­tive price is key.”

As Salesh Grover, Busi­ness Head, OSL Lux­ury Col­lec­tions aptly sums it up, “The ba­sic rule that ap­plies to buy­ing strate­gies is lis­ten to what the con­sumer wants. If you are meet­ing their needs and they think that you are lis­ten­ing to their wants, they will keep coming to you.”

5. Cross func­tional in­te­gra­tion to cre­ate cus­tomer de­light:

B&M alone can­not cre­ate magic and build a dif­fer­en­tial ex­pe­ri­ence for cus­tomers. Across board, we hear that while prod­uct su­pe­ri­or­ity and unique­ness is the key con­trib­u­tor to a dif­fer­en­tial ex­pe­ri­ence, there is much more that needs to be done to keep con­sumers en­gaged. The in-store ex­pe­ri­ence is a com­bi­na­tion of Vis­ual Mer­chan­dis­ing, branding and com­mu­ni­ca­tion, store de­sign and lay­out, the peo­ple on the shop floor, loy­alty pro­grams and much more. Each of th­ese el­e­ments add sig­nif­i­cant value to the over­all cus­tomer ex­pe­ri­ence and de­light.

As Leela Kr­ishna, DGM, Buy­ing and Mer­chan­dis­ing, Ray­mond Ltd puts it,

“While mer­chan­dise is a key dif­fer­en­tia­tor along with ser­vice, we be­lieve it is the col­lec­tive func­tion­ing that cre­ates su­pe­rior ex­pe­ri­ences and de­lights the end con­sumer.”

Surabhi Agrawal, Head of Mer­chan­dis­ing, Crocs In­dia Pvt. Ltd. adds, “B&M can help with right prod­uct plan­ning. Fo­cused sto­ry­telling helps con­vey the brand mes­sage and el­e­vates the con­sumers’ ex­pe­ri­ence.”

Nitin Yag­nik, Vice Pres­i­dent Mer­chan­dis­ing, Soch Ap­par­els Pvt. Ltd., adds, “We have a sim­ple mantra to­wards de­light­ing our cus­tomers – “Amaz­ing prod­uct at a great price from a large as­sort­ment to choose from and with avail­abil­ity of every style in every size”

The in-store ex­pe­ri­ence is a com­bi­na­tion of Vis­ual Mer­chan­dis­ing, branding and com­mu­ni­ca­tion, store de­sign and lay­out, the peo­ple on the shop floor, loy­alty pro­grams and much more.

CHANG­ING ROLE

While prod­uct is hero and presentation its co-star, it is not enough for con­sumers of the new world. The well­trav­elled, highly de­mand­ing con­sumer also seeks en­gag­ing ex­pe­ri­ences and it is th­ese ex­pe­ri­ences that will have them grav­i­tate to­wards the brand re­peat­edly and loy­ally. This fast evolv­ing, dy­namic in­dus­try has not only put B&M teams un­der far more pres­sure, it has also re­defin­ing their role. They are now ex­pected to think strate­gi­cally than just be­ing ex­e­cu­tion-led. Tech­nol­ogy, an­a­lyt­ics, in­no­va­tions are all im­pact­ing B&M think­ing and strate­gies. Every­thing from prod­uct de­sign, se­lec­tion and presentation to tal­ent de­vel­op­ment to cus­tomer ex­pe­ri­ence, is be­ing im­pacted.

Ear­lier, it was enough to of­fer the lat­est trends and styles at com­pet­i­tive pric­ing. To­day the mix in­volves cus­tomiza­tion, hy­per-lo­cal­iza­tion, trend­set­ting vs. trend-right, a deeper un­der­stand­ing of the con­sumer (not just his prod­uct choices but also his/her life­style choices) and much more. All of this while en­sur­ing that the eco­nom­ics of the prod­uct is al­ways cor­rect.

The con­sumer’s need for fresh­ness has re­sulted in new prod­ucts hit­ting the floor every fort­night vs. the sea­sonal changes ear­lier. On­line with its deep dis­count­ing is putting mar­gins un­der pres­sure. B&M pro­fes­sion­als are hav­ing to man­age the fine bal­ance be­tween cus­tomer and busi­ness ex­pec­ta­tions. A tough job all around!

THE NEW RULES OF RE­TAIL MER­CHAN­DIS­ING

The fu­ture seems to be bring­ing in even more com­plex­ity to the role. Most re­tail­ers men­tioned that while it is dif­fi­cult to pre­dict what the role of B&M would look like in 2025, ev­ery­one is con­vinced that the game is chang­ing rapidly and the rules will be rewrit­ten. Here is what we be­lieve will be­come im­por­tant:

1. The strate­gies for on­line will have to move away from price and dis­count­ing to ex­pe­ri­ence based. There will have to be strate­gies that help repli­cate in­store ex­pe­ri­ences on­line and there­fore the buy­ing strate­gies will be im­pacted.

2. Speed­ing up of the prod­uct life cy­cle: Prod­uct life cy­cles have al­ready be­come short and will con­tinue to be­come shorter. Spark­ing chat­ter around new launches will be im­por­tant.

3. Cus­tomiza­tion in terms of fit, sil­hou­ette and com­fort: More and more con­sumers are want­ing gar­ments that match their per­sonal style. No longer will an off-ther­ack gar­ment cut ice. Bet­ter fit­ted gar­ments, sil­hou­ettes

that are flat­ter­ing, un­der­stand­ing con­sumer choices and de­liv­er­ing cus­tom­ized gar­ments which en­sure that they fit well and take away the has­sle of non-avail­abil­ity of size will be key. 4. In­te­gra­tion of Dig­i­tal In­tel­li­gence and Data An­a­lyt­ics to im­prove de­ci­sion mak­ing: What­ever the in­sight­ing tools used, in­cor­po­rat­ing dig­i­tal in­tel­li­gence will help B&M prac­ti­tion­ers take bet­ter de­ci­sions faster. Whether it is so­cial me­dia lis­ten­ing which will help buy­ers un­der­stand straight from the con­sumers what they like or don’t, or it is get­ting real time data in­cor­po­rat­ing re­tail tech will ben­e­fit the B&M team in every as­pect of their job. Sharad Venkta, MD and CEO, Toonz Re­tail In­dia Pvt. Ltd., speaks about how they uti­lize their on­line pres­ence to gauge re­sponses to styles. He says, “With a few se­lected sites we do a pre-look for our prod­ucts with an op­tion to pre-book. This helps us es­ti­mate the sell through and re­sponse.”

– By IMAGES Re­tail Bureau

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