Making Smart
Merchandising
Decisions
Dr. Domingo T. Balse, Jr.
How can you use analysis to
improve efficiency?
• By analyzing your past business
activity, and comparing your
business strategies, goals and
results, you will be able to come up with
the most viable solution and make
the best decision possible.
• The more business data you consult and
the more effort you put into your
analysis, the better your final decision
will be.
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How big does data increase
efficiency?
• Big data management improves
operational efficiency
by analyzing the customers'
behavior using their shopping
data and helps in the
implementation of predictive
analytics to calculate the average
checkout waiting time, for
example.
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Offer
A
Unique
Selling
Proposition
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How does data analysis
improve productivity?
• Data powers continual performance
improvements
• When it comes to individual and
team performance, data can be a
significant productivity driver. It can
show management areas for
improvement and help
employees be more aware of
their work habits and activities.
5
How is business analytics
used in retail?
• Retail chains and retail businesses can
use analytics to understand the
differences in demand for their
product across various
geographic locations. Using
consumer spending analytics, retailers
can use this data to better service
customers in specific regions and also
stock products more efficiency.
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What is a merchandising
analysis?
• Merchandising analytics is the process of
collection and analysis of all relevant
data from multiple channels to derive
insights to optimize merchandising
and related operations.
• In merchandising, you BUY and SELL
right away the product.
• In manufacturing, you BUY raw
materials, manufacture the PRODUCT and
SELL it.
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What is the importance of
implementing merchandise
• What do you thinkplans?
is the importance of
implementing merchandise plans?
• By implementing a merchandise plan, you can
ensure that you have the right product mix
available, at the right time, with the correct
quantities. That's now a given. It also leads to
another reason - effective merchandising
planning means you have no dead stock in-
store, which leads to higher turnover.
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Demand-driven Supply
Chain
Source: Boston Consulting Group
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What is a Demand-
driven Supply Chain?
• A Demand-driven Supply
Chain (DDSC) is defined as a supply
chain management method focused
on building supply chains in response to
demand signals. The main force of DDSC is
that it is driven by customer demand. In
comparison with the traditional supply chain,
DDSC uses the pull (Demand pull) technique.
It gives the market opportunities to share
more information and to collaborate with
others in the supply chain.
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What is a Demand-
driven Supply Chain?
• A Demand-Driven Supply Chain
is dependent on aligning all entities across
the supply chain through information
flows.
• A true DDSC can always adapt to the
changing market conditions thereby
maintaining or reducing inventory levels
and reduce the invasive problem of
expedited orders.
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12
Why data is a holy grail
for today's retailers?
• Data is considered to be the holy
grail for today's retailers, and here
are three reasons why it's never
too late to reap its benefits.
1) An analytics platform helps you
understand your customers.
2) It allows you to save on costs.
3) It helps you improve your
store's indoor conditions
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Today’s ever-changing retail environment
constantly needs to keep up with evolving
consumers’ trends to suit shoppers’
thirst for novelty. This, coupled with fierce
competition between retailers, means that
staying on top of trends is crucial. With
data becoming all-encompassing, using an
analytics solution can enable retailers to better
understand their shoppers’ habits, create a
safe environment for them to shop in, save on
costs and streamline in-store’s operations.
Data is considered to be the holy grail for
today's retailers, and here are three reasons
why it’s never too late to reap its benefits.
14
1) An analytics platform helps you
understand your customers
Understanding your customers’ habits and
profiles is the first step to creating an
exciting and fulfilling customer journey
for them. With data analytics you can access
information such as what genders they are,
how much they spend on average per visit,
how long they stay in your store (dwell-time)
and if that visit resulted in a purchase or not.
Thus, that data is gold for retailers who
want to understand who their customers are in
order to tailor their in-store shopping
experience and ultimately improve their
bottom-line. 15
1) An analytics platform helps you understand
your customers (cont.)
Imagine what understanding your shoppers’ path to
purchase could help you unfold. You could enhance
and adapt your in-store display by knowing exactly
how long they stay in one section of the shop and if
certain items don’t get a look back. This could in
turn help you decide which items to restock and
which ones to discontinue. It would also inform
whether seasonal marketing promotions or
digital/poster advertising displays were successful
or not. All in all, using data analytics for your stores
is also one way to stay on track with changing
customer demands and, at the same time, increase
the impact of your targeted marketing campaigns
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1) An analytics platform helps you understand
your customers (cont.)
There’s a wealth of data that could be
unlocked and made sense of with an analytics
platform. This untapped gold mine could not
only help you predict trends but also your
forecast revenue.
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2) It allows you to save on costs
There are a slew of bad practices that result in
retailers spending a lot more than they should on
energy bills. Oftentimes retail shops, depending on
their sizes, consume (and waste) a lot of energy. It is
not uncommon to see shopping windows lit up or
computer screens turned on in the dark of night.
These are just a few examples of energy wastage
but they are countless more. As a result, UK retailers
waste a whopping £300m on energy costs every
single year, which could have easily been reallocated
to more pressing operations. And with sustainability
becoming a hot topic among building operators,
having a green strategy should be a priority,
not only for cost-savings but also for reducing
pollution.
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2) It allows you to save on costs (cont.)
Additional benefits of using a data analytics
platform are that it can help you determine how
many employees you will need on certain
days, based on customer flow patterns and
forecast predictions. This way, you’ll be able to
plan ahead of time while ensuring your
staff aren’t overwhelmed and the shopping
experience delivered remains first-class.
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3) It helps you improve your store's indoor
conditions
Improving stores’ indoor environments has been
one of retailers’ main focuses for the past two
years with COVID prompting the industry to find
safer ways for customers to shop. Retailers
who understand their air quality are in a better
position to make adjustments that could curb the
spread of viruses in their stores. Shoppers want
to feel reassured that their shopping trip won’t
result in them getting ill and having to miss work
as a result of it. They also want a smooth
shopping experience which can’t be achieved if
your stores are overcrowded and lots of CO2 is
emitted.
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3) It helps you improve your store's indoor
conditions (cont.)
Measuring your Indoor air quality has numerous
benefits for both your staff and shoppers. When
your air is brought back to healthy levels, you’ll
be saving on having to hire replacement staff for
employees calling in sick. It’ll also provide a
safer and more productive environment for
your staff.
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3) It helps you improve your store's indoor
conditions (cont.)
For retailers, data is a big asset but also a big
challenge, partly because it needs to be
deciphered.
Retailers that embrace big data through their
organisation can unlock hidden value and
opportunities to improve their bottom-line.
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know/
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business-analytics/
• [Link]
21st-century
• [Link]
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