Here at Trend Bible, we’ve been talking about the personalisation of the retail experience for a while now. Forecasting future consumer trends accurately has a major impact on sales as this article shows. The below news feature can be seen in full by clicking here.
I Want I Get
According to AMR’s Retail 2010 Outlook, demand-driven retailers are the ones that will gather valuable information at each point of interaction, make better use of their knowledge of shopper behaviour, and translate demand insight into effective response and shaping activities. The results are higher return on assets, more inventory turns, and greater revenue growth than their less mature demand-driven peers.
“The forward-thinking retailer is reorganising its business to become demand driven in order to get closer to the needs of the consumers,” says Alexandria Rumble, global product marketing director at TXT e-solutions. “This means using shopper insights to its full potential, connecting business processes, creating personalised offerings and giving consumers the power to browse, enquire, buy and return on any channel that most fits their needs. This allows retailers to meet the consumer need for flexibility and create brand loyalty, with a consistent brand message. Ultimately retailers are putting the consumer first, but in the most profitable way possible to the business.”
But becoming a successful demand-driven retailer is not without its challenges. “Retailers need to get the balance right between demand responsiveness and the need to maintain efficient inventory levels,” says Masson. “We’ve seen massive swings from inventory levels that were too high going into 2009, too low through most of 2009 and rising again in 2010. According to Aberdeen Group’s April 2010 report The State of Retail Logistics, ‘the need to respond to demand’ and ‘reducing current inventory levels in stores, channels, and warehouses’ are the top two pressures impacting retail supply chains.”
New technology will empower retailers to diversify their strategies for reaching the consumer, but will have the potential to place immense strain on product availability, inventory levels and costs
Alexandria Rumble, TXT e-solutions This is extremely important when you consider that pursuing a customer-centric strategy necessitates that the retailer must carry products that are relevant to its customers. “Having the right products available for customers walking through your door has always been the retailer challenge,” agrees John Ewing, sales and marketing director at Demand Solutions. The problem is that consumer choice has risen tenfold through the power of the internet. Consumers can now reach retailers many thousands of miles away offering greater choice at lower prices. So, today’s retailers face much tougher challenges if they are to survive. According to a Grocery Manufacturers Association study, 47 per cent of out of stock situations are caused by forecasting and inadequate store ordering. Considering that 31 per cent of consumers will go to another store if they cannot find the item they want, 26 per cent will substitute a different brand and 9 per cent will not purchase anything at all, both the vendors and the retailers need to do something to prevent lost sales.”
By looking at customers in a more granular way, retailers can find that differences in the products that customers like and want can differ widely across different stores. With this in mind, in order to provide relevant products, retailers need to localise. “Retailers must do a better job of delivering assortments that customers want to buy,” says Masson. “It’s not enough to get the assortment right at the aggregate level, retailers must deliver the right size and quantities to meet the specific needs for consumers of every store.”