Paula’s article this week couldn’t be more timely. In fact, our latest benchmark on Merchandising, Optimizing Assortments to Invigorate Retail, released just a few weeks ago.

Within, we see a drastic difference in the perceived value of these new merchandising tools and retailers’ understanding of how they can be effectively used to improve the product mix they put in front of increasingly-empowered consumers. Here are some of the key findings from that report, which can be downloaded in full by following this link:

• Most merchants place a similar value on new merchandising tools – regardless of size or sales performance. However, understanding of these tools varies drastically; only one third of mid-market retailers ($50 million – $999 million in annual revenue) report a solid understanding of modern merchandising tools and techniques.
• While out-of-stocks and inventory performance remain top-of-mind (particularly for large retailers and those who sell fast moving goods), retailers’ concerns about understanding customer preferences – and their own ability to respond to those preferences with new ideas about pricing and promotions – have become their top business challenges.
• The best performers are far more focused on integrating planning with cross-functional teams: 47% of Winners (vs. a meager 14% of laggards) identify this as a key means to improving their merchandise processes.
• 34% of all respondents plan to optimize their assortments against new key customer segments in the coming year. Another 24% plan to include initial price optimization in their processes in 2013, and 22% will incorporate promotion optimization.
• Laggards finally recognize that their merchandising efforts are too important and complex to be managed within spreadsheets: 25% will be spending the coming years eradicating their spreadsheet-run merchandising systems.
• Data cleanliness does remain an issue for smaller retailers, likely a direct result of their holding onto legacy (or homegrown) systems and their reticence to move to more modern merchandising tools.
• While FMCG retailers mostly lag behind other segments in both current technology usage and forward-looking processes, they are most bullish on the notion of changing their compensation and incentives to be more aligned across the company.
• Operationally, the best performers “know what they don’t know “, and have a generally better understanding of what they need to change to improve their merchandising strategies; by comparison, laggards are asking for more customer segmentation information, but at the same time, citing stalled performance on their inability to identify new merchandising ideas – ones that would appeal to new customer preferences – quickly.
• NO retailers in the mid-market report the use of market basket analytics, while 51% of the largest retailers and 44% of the smallest retailers report these technologies are implemented.
• Mid-market retailers report the least interest in Customer segmentation and planogram optimization technologies. Fully 58% and 69% respectively report they have no plans to use these tools and techniques. This lags all other retailers (including the smallest) significantly.

The full report contains deep analysis into these data points, and we invite all members of the retail community to download it here.