Innovating Your Retail Enterprise for Suatainable Profitability and Growth: Keys Imperatives for Success – Part 1

As the competitive landscape become more and more challenging, besides the direct adverse impact on the top line, retailers will experience aging store bases and slower same-store sales growth rates further constraining earnings-growth opportunities. Compounding this, are rising operating expenses in areas such as infrastructure and utilities. As such, it becomes imperative for retailers to search out additional opportunities to bolster the bottom line.

This is where innovation comes into play… Successful retailer must commit to innovation and execution and strive to hit the mark on merchandise trend, supply chain efficiencies, employee recruitment, development and engagement, deliver superior store execution and better customer experiences…, retail management teams must begin to add more “science” to those areas, driving incremental productivity out of the enterprise.

There are four areas of investment that we believe best support profitable growth:

  • The Insight-Driven Enterprise
  • The Agile Supply Chain
  • A Superior Customer Experience
  • Global Information Integrity


  • The Insight-Driven Enterprise

How are smart retailers preparing for the future while maintaining current growth?

To move the organization forward, retailers need extraordinary visibility into forecasts, results patterns, and trends. In other words, they need much more than mere data – they need insights. With insights, the retailer can begin to pursue next-generation, customer-centric merchandising strategies that merge the art of merchandising with the science of accurate customer-demand forecasting.

The right insights enable merchandisers to tailor assortments to provide localized merchandising that best meets the needs of consumers in each geographic area.

That optimization and alignment happens through insights that occur at key points of the decision process. Decision-makers have the information and empowerment to not merely execute their core responsibilities, but find ways to maximize sales and gross margin opportunities:

  • They can optimize assortments to tailor merchandise to the needs of specific customer segments and plan product assortments to match these needs.
  • They can optimize visual space and layouts of individual stores to cater to the preferences of the customer base for each store. For instance, you can place popular items in locations that drive traffic into the store (with complementary items situated nearby) or position last-minute convenience/impulse items in locations that customers pass on the way to check-out.
  • They can optimize pricing and markdown strategies by closely aligning them with the inventory plan to reduce over-stocks and ensure each store is profitable.



The bottom line: planning and merchandising that’s driven by smart insights into customer demand directly improves net margins.

In summary, the insight-driven enterprise combines the art of merchandising with mathematical analysis to accurately predict customer demand. This enables both customer-centric merchandising initiatives (such as localized merchandising) and sophisticated optimization of assortment plans, allocations and replenishments, store layouts, and pricing. The result is peak financial performance from every business decision resulting from:

  • Increased sales
  • Improved margins
  • Increased growth and market share
  • Greater customer loyalty


Watch out for Part 2.

News Reporter

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