Merchandising Analytics Solutions for a Leading Retailer in the US

May 13, 2017

A well-displayed product or service of a business is not just aesthetically pleasing to the customers but also aids in sales improvement. A good merchandising plan utilizes all the advertising techniques to display the products to drive visitors to the store. With consumers demanding more personalized products on the shelf, retailers need to revisit their merchandize plans and assortment optimization strategies to improve the store-front layout. A merchandize planner plays a key role in recognizing the latest trends in the market to predict its lifespan.

To stay ahead of the competition, businesses need to have a clear strategic planning before releasing updates and innovation. The more often an assortment can be personalized, the more loyal the customer will be. Quantzig’s merchandising analytics solutions help merchandizers and businesses in the market, make informed decisions while optimizing assortment and storefront layout. Our merchandising analytics solutions help improve customer footfall and increase overall profitability for the business. It also enables accurate inventory stock decisions, offers demand forecasts to improve tracking of sell-through rates and to achieve accurate replenishment plans.

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The Business Challenge and Quantzig’s Approach

By realizing the need to improve sales and deliver better customer experience, the client, a leading lifestyle, apparel, and footwear retailer in the US approached Quantzig to engage in a merchandising analytics assessment. The effective merchandising plan and optimization solution would help them overcome competitive pressure. The client had a base of 5 million customers with over 200+ stores in the market. With dynamic consumer behavior, less brand loyalty, channel complexity, and declining sales, there was a dire need to gain customer insights. A holistic view of customer, inventory, and demand across multiple channels, categories, and products to make right decisions.

The primary objective of this merchandising analytics study was to create an merchandize plan and assortment optimization strategy to improve sales, customer satisfaction, and store-front layout. The solution focused on optimization, to get the right product to the best-fit stores in the right quantities at the right time. To gain a better understanding of our client’s requirements, the merchandising analytics experts gathered information from various sources such as POS data, inventory data, planogram data, weblogs data, loyalty data, and social media data to develop an effective merchandising plan and assortment optimization solution.

Business Benefits and Insights

With the objective to help the client improve sales and deliver better customer experience, Quantzig deployed a team with extensive experience to perform a merchandising analytics engagement to offer actionable insights to the client. The merchandising analytics solutions created effective merchandising plans and gained customer insights by analyzing sales and merchandising data spread across multiple disparate databases and combining it with the customer, clickstream, shipment, and inventory data to counter thinning margins and competitive pressure.

The client was facing significant issues over time due to the ever-changing needs of customers. Hence, the analysts’ key focus was to develop a solution and anticipate the changing demands, channel preferences, and price sensitivity to stock optimal merchandize, plan assortments, and promote the right products through the right channels for improved sales, profitability, and customer satisfaction. Our solution helped improve storefront optimization and assortment planning based on product sales and customer data analysis. For enabling accurate inventory stock decisions, we provided demand forecasts at the product, category, department, and location levels.

In just eight weeks, the client was able to analyze promotion efficiencies and design targeted promotion strategies. The solutions hyper-localized assortments based on purchase transaction history and fine-tune assortment planning based on location, demographics, competitive activity, and sales performance. The merchandising analytics team developed a complete picture of customer interactions by analyzing demographics and interests based on style, size, color, and product category to meet local customer demand. Moreover, the engagement also provided insights into sales, display features, promotions, and associated customer behavior. The solutions identified suitable cross-sell and up-sell opportunities and provided insights on the various combinations of products that are frequently bought together which helped in optimally placing, promoting, and pricing them accordingly.

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