Customer-Centric Product Assortments – one of the keys to win in retail
Shopping on Amazon certainly isn’t new. The pleasure of visiting its digital storefront and experiencing perfectly curated ads, tailored new product releases, and other precisely targeted offers never gets old.
Amazon’s presence, and innovative tactics, has continued to add customers and add to the worries of brick & mortar retailers. These retailers are leveraging various strategies to fight back, such as lowering prices, increasing reliance on private label products to boost profitability, and launching new technologies to enhance the in-store shopping experience. While each of these can have a positive impact, emnos has proven with retailers around the globe that a shift towards customer-centric product assortments is paramount to a sustainable winning strategy.
A customer-driven product assortment approach, when properly executed, enables retailers to deliver higher sales and profit margins than any other Category Management practice. This offers better customer experiences, which drive higher conversion and higher basket volume, critical to building lasting customer loyalty. This assortment methodology enables easier tracking, scalable processes, and eliminates the laborious tasks of legacy assortment tools. An assortment tool based on customer shopping behavior (instead of trendy POS and Supply Chain data), enables merchants to streamline and scale their assortment strategies without damaging workflow integrity.
For more than 15 years, emnos has partnered with a global network of retailers and has built a framework for customer-centered assortment optimization – and this framework now serves as the backbone of our latest assortment solution, emnosAssorter. It starts with customer data: analyzing millions of customer transactions to identify how shoppers make decisions at the shelf and how this translates into action at the product level. emnos identifies what customers buy and what they need from a particular part of the store, enabling retailers to satisfy the needs of every shopper. Some service providers advocate building assortments based solely on sales momentum and competitive trends. That is not enough. emnos incorporates critical elements such as loyalty and substitutability, which insulate the retailer when they must delist items to make space for newer ones, by ensuring the availability of a suitable replacement.
Measuring the impact of assortment decisions
With emnosAssorter, emnos takes the customer-centered approach outlined above and combines it with industry-leading technological capabilities. emnos has now automated The Customer Decision Tree into the emnosAssorter tool. With this automation, emnosAssorter mines millions of transactions in order to identify shopper needs, and puts them at retailers’ fingertips in seconds. Then, emnosAssorter executes an overview of the retailer’s current assortment and the proprietary algorithms provide recommendations for accelerating growth based on category roles and objectives. If the user isn’t satisfied with the recommendations, they can make adjustments as they see fit, and emnosAssorter will instantaneously simulate the impact. We’ve built in these predictive capabilities so a stakeholder knows the impact of their decisions in advance and can justify their actions. emnosAssorter provides the retailer and its partners the transparency necessary to ensure the end-to-end collaboration needed for successful implementation.
Delivering customer experiences and business results
emnos believes merchants and their supplier partners must work together in order to deliver great customer experiences. While merchants understand their stores’ value proposition better than anyone, their suppliers are the subject matter experts across the rest of the industry and can help identify notable trends in the marketplace. emnosAssorter has been designed to be collaborative with these key stakeholders: performance can be tracked by anyone involved in the process, and changes are made and recorded in real-time to guarantee the integrity of the project.
The outcome is what our partners have lauded as “an absolute game-changer.” Our retailer customers realize tangible benefits. In one instance, a merchant achieved an immediate 2%-3% lift in category sales. In another example, a retailer gained nearly $20M in incremental revenue through more effective negotiations with their supplier partners. In both examples, users also saved days of analysis time, which freed them to focus on issues requiring more human intervention.
Customer choice and substitutability
That last point is critical: the fact that new technology can free up merchants’ time to focus on issues that do require human touch. For all of Amazon’s strengths, it still cannot compete with brands that create engaging in-store experiences for their shoppers. In order to maintain their position or grow moving forward, retailers must make decisions based on their impact on customer experience. While great experiences can be created in a number of ways, fine-tuning product assortments – ensuring that customers can purchase what they want, when they want it most – is imperative. If the customer first choice isn’t available, proposing a suitable replacement eliminates basket abandonment. This is what shoppers have come to expect after being introduced to Amazon and substitutability. Retailers that meet these expectations will win through increased conversion and repeat business. emnosAssorter will help you put your customers at the center of your assortment planning process and will get you there faster, leaner, and smarter.
If you want to benefit from a comprehensive, efficient solution and improve your assortment planning approach for better, measurable and predictable results, emnosAssorter can pull all the pieces together for you.
You can find more details on emnosAssorter here or get in touch with us at firstname.lastname@example.org