Customer-centricity is all the buzz in retail, as it should be. Retailers that can win today and in the future will be the ones that know and understand their customers, and that can tailor the experience and product offering according to each customer’s unique taste and preference.
As part of an overall focus on customer-centricity, leading retailers have recognized that curated assortments are necessary to capture consumer attention and loyalty.
Does your assortment make it easy for the customer to say “yes” whenever and wherever they are shopping? If the answer is no, there is still work to be done.
The move to localized, customer-centric assortments has heaped even more complexity on retailers, at a time when most are still coming to terms (and modernizing their tech stack and operational processes) in response to the innumerable demands of omnichannel retailing.
While there is no silver bullet to achieve customer-centricity, I’ve outlined below Aptos’ approach to put the customer at the center of merchandise strategies. I share this in the context of how Aptos Merchandise Lifecycle Management (MLM) is supporting retailers to achieve customer-centric planning, with a focus on four major processes: Assortment Strategy, Product Selection, Product Distribution and Product Quantification.
1. Assortment Strategy: Aptos MLM helps understand local customer needs with advanced analytics and clustering tools
The goal of an assortment strategy is to align product requirements to customer needs on a market-by-market basis. Understanding and documenting local customer needs is achieved through clusters and by defining the attributes of customer groups in a manner that can be related to product types. For example, perhaps one grouping contains “college students in sports schools that desire brands, bigger sizes and low price.” Another grouping could involve customers who are “Gen Z fashion early adopters which have more spending power, want exclusive products and have a preference for certain fabrics and colors.”
Grouping customers by features allows the merchants to understand how many and what type of products (attributes) are required by location or location type. Aptos MLM helps review historical shopping patterns by customer segment and assess customer preferences with scored shopping behaviors by segment and attribute.
The result of the Assortment Strategy is a proposed shopping list of choices by attributes (products) and by cluster, effectively providing the buyer specific guidelines as to how many of each options, for each location or channel.
2. Product Selection: Aptos MLM helps outline items in quantities that fill the needs of the assortment strategy
Based on the Assortment Strategy, merchants can start shopping for the items and in the quantities that meet the needs of the shopping list. Some of the needs may be filled from existing continuity products, some may be found in replacement products that are “similar” to the previous year. With Aptos MLM, the process can be managed interactively. Perhaps after some research a buyer just can’t find the suggested products or has different recommendations and aims to modify the strategy. As the Assortment build out continues, the buyers can assemble a list of candidate products that the strategy requires.
3. Product Distribution/Fulfillment: Aptos MLM helps establish product/location eligibilities as well as suggest quantities for the merchants to consider when refining the shopping list
This phase of the assortment management process is more straightforward, based on the strategy that dictated which products should be designated to which locations, channels or clusters that satisfy the local customer needs. Aptos MLM will help establish product/location eligibilities as well as suggest quantities for the merchants to consider in refining the shopping list. In this phase, it’s important to understand not just what the numbers indicate, but also to have a visual preview of the assortment. Aptos MLM provides visual representation of exactly what the customer will see when they walk into a store, or view products on a web page.
4. Product Quantification: Aptos MLM helps determine the potential quantities of the products to be ordered and the exact color/size requirements based on destination
With a now narrower product candidate list, designated locations and quantities, and a strategy to balance to, the next task is to determine the potential quantities of the products to be ordered, including the exact color and size requirements based on the location destinations (with reference to their individual size and color preferences) and the delivery timing that makes sense to achieve the original merchant vision. With Aptos MLM this quantification is in balance with the overall financial constraints that the business has chosen to operate with, including planned sales, inventory levels, and additional factors. Quantification may get more detailed (i.e. weekly) if the product will be carried longer term and ordered frequently (vs. a “one and done” buy.)
Retailers can continuously adjust all 4 areas until the balanced assortment meets the customers’ needs by location and it matches the merchant vision as well as the financial needs of the organization.
This four-step approach helps retailers align strategy with execution, deliver a strong and consistent brand message to their target consumers, deliver optimized customer-centric assortments and ensure consumer demand is met, no matter how the customer interacts with the brand.
For more insight on how Aptos is helping retailers to optimize merchandise lifecycle management strategies to keep pace with shifting shopper trends, here’s a look at our latest presentation.