By Ken Kuperstein, Director of marketing, One Door | DEC 21, 2021 | BLOG
retail employee with tablet

 

If the pandemic has taught us anything, it’s that agility is the name of the game when it comes to successful merchandising.

Shoppers have returned to brick-and-mortar stores, but the competition with eCommerce is still fierce. More than ever, retailers need to make sure they’re delivering an exceptional shopping experience, both for customers browsing the aisles and for those picking up in store after ordering online (BOPIS). To do it, they need to execute merchandising plans crisply and efficiently.

Unfortunately, the siloed nature of merchandising planning and execution processes can make it difficult. Supply chain disruptions and labor shortages—neither of which appear to be going anywhere anytime soon—add to the challenge, demanding of retailers an even greater ability to pivot and adapt as needed to get the right products on the shelves at the right time.

To better understand how retailers can improve their merchandising agility to meet these challenges in the coming year, we asked Coresight Research to conduct a survey of grocery and pharmacy retailers in Germany, the UK and the US. Their data confirmed that retailers find merchandising execution more challenging than ever: 66% of respondent said execution is more difficult now than before Covid-19.

What’s more, 70-80% said that the pandemic has made previously existing challenges even more difficult, citing remote working arrangements, more frequent planogram resets, and fewer staff. Respondents also mentioned lack of time to incorporate feedback from HQ, difficulty communicating multiple instructions across the entire store fleet, and obstacles to ensuring compliance in real time.

Not surprisingly, retailers have increased their investment in in-store merchandising technology to try to tackle these challenges. Coresight Research found that 50% of grocery retailers and 29% of drugstore retailers surveyed have increased their in-store merchandising technology budget over the past year. Compliance with merchandising instructions and planning efficiency were the top two areas mentioned as being in need of a tech upgrade.

But technology has to be wielded strategically in order to pay dividends. By analyzing the survey results, Coresight Research was able to identify three key actions retailers will need to take to achieve greater agility in their merchandising execution.

1. Retailers need to leverage AI effectively for customer-centric merchandising.
AI-powered solutions can help retailers plan and execute merchandising processes more nimbly, whether at the HQ level, for assortment and category management, or at the store level, for managing compliance. One example of the latter is the Store Gallery feature in our Our platform platform. By using AI to screen out bad photos, Store Gallery allowing teams to see photographic evidence of compliance without having to sort through millions of images. Execution errors can be more quickly addressed, ensuring that shelves and promotions are set correctly for a better shopping experience.

2. Retailers should achieve integration maturity across merchandising processes and store fleets.
Only 23% of survey respondents say they’ve achieved integration maturity. That’s a serious problem. When merchandising processes are siloed, communication breaks down, errors and inconsistencies proliferate, and execution suffers as a result. By investing in enterprise-grade, integrated merchandising applications, rather than relying on piecemeal custom applications and outdated manual approaches, retailers can plan and execute their merchandising more successfully across the board.

3. Retailers should focus on objective-led investments in merchandising processes.
For survey respondents planning to introduce merchandising software in the near future, one of the biggest challenges cited was the inability to demonstrate a return on investment. Coresight Research recommends—and we at One Door concur—that one of the best ways to demonstrate ROI is to focus on measurable, actionable metrics such as compliance with merchandising instructions. One Door makes tracking that information easy, with real-time metrics and photos that allow teams at HQ to see if store teams are engaging with the software, and whether they’re getting execution instructions right.

With so much in flux as a result of the ongoing pandemic—from the supply chain to the labor market to the effects of inflation—it will be critical for retailers to up their agility in 2022. By deploying AI-powered solutions, driving toward ever-greater integration, and focusing on measurable wins like merchandising compliance, retailers can keep their edge and thrive. For more insights, download the full Coresight Research report. And be sure to stop by our booth at NRF in January, 2022 for a closer look at how One Door is helping retailers create successful pathways to merchandising agility.