As a former merchant turned consultant to merchants, I’ve had my fair share of exposure to production calendars, line reviews & selling meetings. In reflecting on my experiences over the last decade, I realized that although the retail industry itself has changed immensely, the merchandising job function hasn’t kept pace. I’ve boiled down observations from my time spent with merchants at 25+ companies into three recommendations for evolving this critically important role. Because organizational change is no easy feat, I’ve ensured all of the suggestions are realistic to implement in a short timeframe with maximum impact.
1. DITCH THE PRINTER
The time it will take to scan through pounds of printed output can be shredded (no pun intended) by investing in a better analytics platform. Bonus? You are helping to save the planet.
Stacks of paper, placed on top of computers as if they were no different than a lunchroom tray, is a common sight at many of today’s largest brands.
Stacks of paper, placed on top of computers as if they were a lunchroom tray, is a common sight at many of today’s largest brands. In fact, many merchant teams are still without laptop computers. At a minimum, companies must invest in the hardware that makes it possible to efficiently get work done – whether at or away from the desk.
Data visualization software that exists today, including Tableau and Looker, are tools that are made for merchant teams – a group of busy, highly visual people who have to digest a lot of information quickly, identify key trends, and make decisions. Research & invest in technology. Empower your most junior – and most likely technically savvy – merchants to own the project and see what they come up with.
2. REPAIR – OR ESTABLISH – THE MERCHANT / MARKETING RELATIONSHIP
There are three types of relationships between merchandising and marketing teams I’ve witnessed:
(1) they don’t get along.
(2) they don’t know who the other is.
(3) they are collaborative – understanding exactly what the other brings to the table.
Sadly, occurrences of #3 are sparse, and most often observed at digitally native companies where the functions had to work together for the business to get off the ground. The reality now is that every brand and retailer is a digital company – and they need to achieve symbiosis between these teams to get anything done well.
So, what can leadership teams do to create collaboration between these teams?
- Start from the top: create a chief brand officer (or equivalent) who runs both merchandising and marketing.
- Move the teams to physically sit next to – or near – one another.
- Organize an offsite with both teams where they learn about the other’s day-to-day work.
- Ensure information is being readily – and consistently – shared between the teams, starting with a calendar that includes product launches, promotional strategies, and marketing content.
3. GET TO KNOW YOUR CUSTOMERS – ALL OF THEM
And not just the aspirational image of your customer. Embarking on a customer discovery project can be low cost and high value. Make sure that your merchants (and leaders) are able to answer questions like the below – and tie the learnings to evolving the product itself.
- What percentage of your customers fall into each generation (see image below) – and therefore what are the implications for how they perceive + shop your brand? Does the product assortment mirror the current customer make up or are you designing for the wrong audience?
- Where do your customers live? E.g. Do you have a similar concentration of customers everywhere or are they mostly coastal? What does this mean in terms of the percentage of the assortment that should be dedicated to seasonal merchandise?
- Who are your competitors from the perspective of your customers? For example, many speciality retail chains may be competing for share of wallet with Target just as much as they are the store next door to them at the mall. Be able to answer the question, “If I was my customer, how would I spend this $100?” – and then make sure you are producing an assortment of products that is deserving of that spend. Bonus points? Think beyond your category when it comes to competition – Shinola and west elm have both recently invested in hotels, reaping the benefits of the millennial desire for travel & experience.
Hold merchants accountable to this information. Kick off a seasonal sku plan with an exercise in which the line is designed around different types of consumers. Challenge the merchants to know who the likely buyer is for every unit that they are adding to the plan.
These three changes — (1) Going paperless, (2) Bonding with marketing & (3) Tying customer to product — are a starting point for moving merchandising into a modern age. Have thoughts on this? Feel free to reach out to me at firstname.lastname@example.org.
MakerSights is a predictive analytics platform for modern retail. By pairing the voice of your customer with artificial intelligence, merchants supported by MakerSights’ technology are able to drive smarter, more profitable assortments.