Merchandising : Juggling Stats?
Holistic merchandising metrics separate wheat from chaff
April 2009 by Andrea Syverson
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Multichannel merchants are born multitaskers. They juggle the planning of multiple seasons and offers, industry macro and micro trends, numerous categories, SKUs, forecasts, vendors, inventory levels, management expectations, channels, customer feedback, product reviews, creative input, trips for sourcing, and product development processes. Their time — your time — is precious and must be used strategically.
Multichannel merchants are forced to be experts at editing and sifting wheat from chaff. They continually ask themselves, “What really matters?” when it comes to evaluating the health of a product portfolio. It’s easy to get overwhelmed and/or stuck in a sea of statistics.
With that in mind, here are a few suggestions for merchants and marketers wanting to take a holistic view of their product lines — post-square-inch analysis:
First, find out what matters to management right now. In today’s short-term business world, goals change quickly. Ask these questions about your main priorities this year:
- Is this year’s priority increasing top-line sales?
- Improving bottom-line profitability?
- Growing the housefile?
Merchants need to be key players at their companies’ strategic planning tables, as they’re integral to helping a company achieve its goals. With merchants working anywhere from six to 18 months out, they must attain a clearly communicated vision from the top.
Metrics That Matter
Simplify your metrics dashboard, but use one. Lauren Freedman, president of the e-tailing group, confirmed the problems that merchants and marketers face in the industry survey on pg. 23.
A simplified, user-friendly dashboard of key product indicators would help solve these problems. With collaboration, insights and management buy-in, merchants should look to monitor no more than one to three relevant-to-their-business metrics that are clearly actionable. These metrics should be true dashboard alerts, signaling when things are going well, not so well and when the danger zone is approaching.
Without this kind of transparent communication tool, merchants can drown in a sea of irrelevant data points. As master product-line editors, merchants need to use those same pruning skills to hone their analytic reports.
“As time compression dominates most of our lives, the purchasing catalyst has never been more intriguing,” says Chris Tso, director of merchandising of technology products at music equipment cataloger Musician’s Friend. “When analyzing product performance levels, I refer to a balanced view of traditional catalog metrics, matchbacks and sales across channels. As customers become more channel-agnostic, knowing what makes the customer’s heart beat and multiple left-brain metrics provide direction for our merchandising decisions.”
Companies Mentioned:
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