How to Boost Profitability with Real-Time Merchandising
Retail businesses need to be nimble and react quickly to changes in customer demand in order to maximise sales and profitability. Real-time merchandising allows retailers to optimise their product assortment and inventory based on real-time data insights to drive higher conversion rates and increase basket size. Implementing a real-time merchandising strategy can significantly boost profit margins for retailers of all sizes.
Use Data to Inform Merchandising Decisions
The key to successful real-time merchandising is leveraging data to gain visibility into customer behaviour and preferences. Retailers need access to granular data on sales, inventory, pricing, promotions, and more across channels to identify opportunities to improve merchandising tactics. For example, data can reveal best-selling products, items with declining sales, out-of-stock risks, and customer affinities that inform decisions about product availability, assortment, pricing, and promotions. Advanced analytics and AI tools like Retail Express allow retailers to act on insights quickly.
Optimise Product Availability
One of the biggest factors impacting conversion rates and profitability is product availability. If a desired product is out-of-stock, retailers lose that sale. Real-time inventory management ensures shelves are properly stocked with in-demand products. Retailers can track inventory levels across stores in real-time and automatically generate replenishment orders or trigger inventory transfers between locations as needed. Keeping top-selling and seasonal products in-stock is critical.
Adjust Assortment and Space Allocation Dynamically
With access to real-time sales data and trends, retailers can actively adjust the items and categories they offer to align with evolving customer preferences. Slow-selling products can be marked down or removed from shelves to make room for trending products customers want. The product mix can be optimised by location, seasonality, events, and demographics tailoring it to each store’s customer base. Shelf space and product placements can also be adjusted to prioritise hot-selling items.
Implement Localised Pricing and Promotions
Real-time data allows retailers to localise pricing and promotions to maximise conversions and profitability. Customer willingness to pay and purchase habits often vary by location. With real-time insights, retailers can tailor pricing to what local customers are willing to pay in each store. Targeted promotions can also encourage purchases of high-margin items and capitalise on local events or holidays. Automated systems enable efficient management of pricing and promotions across all locations.
Create Flexible Planograms
Planograms that dictate product placement and visual merchandising should be easy to update frequently based on real-time insights. Retailers need flexible planograms that allow them to quickly move a hot product to a prime display area or add new trending items without major disruptions. Digital planograms that integrate with retail systems enable seamless merchandising changes across channels. They optimise shelf space allocations and product adjacencies to maximise sales.
Choose Agile Retail Technologies
To enable real-time merchandising, retailers need agile, integrated retail technologies that provide holistic visibility and support data-driven decisions. Robust business intelligence, inventory management, space planning, pricing, and replenishment systems allow retailers to respond rapidly to sales trends and customer behaviour patterns. Choosing platforms that seamlessly share data is key for timely merchandising. The technology stack should also easily integrate emerging innovations like AI and machine learning to maximise capabilities.
With real-time data-driven merchandising tactics, retailers can break down business siloes, reduce stockouts, minimise markdowns, and optimise their product mix to satisfy customer demand – leading to sustainable profits and growth. The ability to monitor performance and make swift changes is critical for success in today’s omnichannel retail environment.
