STRATEGIES FOR RETAIL PLANNING SUCCESS
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.
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.”