Retailers are quite consistent in the opportunities they see to improve their merchandising processes. In fact, not only did retailers in this year’s Merchandising Report identify the exact same top three opportunities this year as they did twelve months ago, but their priorities remain unchanged. The flood of data generated by digital customer engagement has created something of a Wild West environment: aggressive competition on the downside, but the opportunity to use that customer data on the other.

Within the context of that new world, retailers are determined to remain relevant by folding customer segmentation and preferences into the product planning process, relying on well-connected team members from multiple departments within the enterprise to achieve that goal, and boosting sell-through as much as possible. This is the aggregate perspective.

Figure 1: Making the Most of It…

Source: RSR Research, September 2013

However, when we look at responses based on performance the story starts to unfold in a much more informative manner (Figure 2).

Figure 2: …Or So It Would Seem

Source: RSR Research, September 2013

The best performers are much more interested in tailoring their product assortment to customer preferences. This comes as little surprise; one of the hallmark behaviors of winning retailers – and a significant reason for their continued success – is an unwavering focus on the customer. In our most recent Marketing report, Winners reported they have a greater ability to segment their messaging efforts based on customer preferences; in this study we see then moving beyond tailoring just the messaging – but the product mix as well. This is just further confirmation of the customer segmentation and data analytics legwork forward-looking retailers have already undertaken to deliver an experience that makes the consumer feel special. Even if few retailers have the insight (or the data purity… or the technological sophistication… or the human resources… or the supply chain) required to deliver a truly personalized consumer experience to the nth degree, they have begun the journey: the best are trying to get there in a step-wise fashion.

However, within that same marketing report, Winners told us they were treading lightly around organizational change within the enterprise – even though they reported needing marketing and merchandising to work better together. Their explanation was simple: as old-world and new-world marketing functions collide, moving too quickly to consolidate them runs at great peril. Does the same apply to new generation of merchants – the digital natives we mentioned at the outset of this report – and those whose experience is steeped in more traditional, artful thinking? Only one thing is for certain: regardless of how this collision of worlds plays out from one retailer to the next, cross-functional teams play a vital role in making the transition as seamless as possible.

You can read the full report by following this link.