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Merchandise Planning

The New World of Furniture Shopping

It comes as no surprise that retail giants such as Amazon, Walmart, and Target have expanded their already vast product offerings into the furniture space. While these leading brands have undoubtedly been successful across a diverse line of product categories, selling furniture can be trickier. Furniture still remains one of the most expensive purchases a consumer will make, next to buying a home or a car. And despite advancements in technology and online shopping, most customers still want to sit, feel, and experience furniture prior to purchase. Traditional furniture retailers can combat the retail giants by making an immediate positive impact to the customer shopping experience through well executed merchandising.

Merchandising is the visual link between buyers and sellers. Great merchandising layouts display products in the right place, at the right time, and lead to higher sales, larger average tickets, and better margin.

The optimal furniture store layout is achieved by embracing a few key principles:

  1. The customer’s shopping experience should be enhanced

customer shopping experience

You never get a second chance to make a good first impression. To that end, the showroom’s entry point, or “decompression zone,” should transport customers from the distractions of the outside world into a shopping mindset. This decompression zone should be open, inviting, and provide an unobstructed view of the rest of the showroom. Sales associates should suppress the urge to engage guests while they are in the decompression zone. Instead, retailers should consider setting up a speed bump just beyond the entry point. Speed bumps are high-impact, eye-catching displays designed to slow a customer’s progression through the showroom. By placing a speed bump just past the decompression zone, retailers can combine the traditional concept of a speed bump with a less intimidating way for associates and guests to interact.

  1. The design should allow for flexibility

Retailers have a variety of store layout options (grid, free-flow, loop, etc.) and each layout has its own advantages and disadvantages. Free-flow layouts allow for more creativity and flexibility in designing vignettes and are therefore a good option for home furnishing retailers. A free-flow plan encourages customers to wander from one vignette to the next. The lack of a defined walking path means customers are drawn to displays that capture their interest, creating a more immersive shopping experience.

 

The free-flow layout also gives designers the creativity to completely change the look of the showroom without the constraints of a grid. Free-flow layouts create open sightlines that naturally invite customers to explore the entire showroom. Although the customer’s path is not clearly defined, strategic placement of furniture, power walls and speed bumps can produce a natural and engaging route through the store.

 

  1. Design should reflect consumer behavior and appeal to the target market

When designing a showroom, understanding consumer behavior is paramount. Studies have shown that people tend to shop the way they drive (we drive on the right side of the road, so we tend to veer to the right when we shop). Retailers know most guests will turn right after leaving the decompression zone, so the first department / vignette they see should make an impactful statement. Whatever the design, it should create a “wow” moment for the customer and encourage them to keep browsing.

Retailers need to have a predefined target market as it is difficult to appeal to everyone in a limited space. I once worked for a home furnishings retailer that tried to cater to all, from the budget-conscious consumer all the way up to the luxury consumer. In their showroom, they had on display a $399 sofa with a pair of lamps that retailed for $249 each.  Imagine the customer’s surprise when they realized that the pair of lamps would cost more than the sofa. It didn’t make sense, and it certainly did not make for a positive customer experience.

Succeeding in the new world of furniture retail requires getting back to basics! Retailers can have the best assortment of optimally arranged merchandise but if the showroom shows signs of uncleanliness with narrow aisles or cluttered vignettes, all your hard work will be lost as your customers feel unwelcome. Make sure the retail space and shopping experience is comfortable and inviting and you are already on the path to success.

Grocery co-op identifies urgent store issues with AI

Chain Store Age – Associated Food Stores (AFS) is leveraging artificial intelligence (AI) to determine what really needs fixing in the store. Salt Lake City-based AFS, which consists of about 500 independent and corporately-owned stores in the western and southwestern U.S., found itself dealing with a growing number of SKUs. This resulted in more potential issues occurring at store level than a manager could effectively track or prioritize.

AFS may be ahead of the curve when it comes to applying AI to store-level SKU issues. According to the BRP, retail consulting firm, report, 2018 Integrated Planning and Inventory Management Survey, most retailers (67%) are not leveraging advanced analytics to improve their planning decisions and optimize inventory. In addition, only 39% of surveyed retailers identified improved analytics as a top priority.

Read Full Article: Grocery co-op identifies urgent store issues with AI

‘Coming down from the mountain’: How the casualization of fashion is affecting traditional luxury brands

Glossy – When Bill White founded Scarpe di Bianco in 2009, a brand that makes small batch, handmade Italian leather shoes, “comfort was a four-letter word” in the luxury shoe industry, he said. The idea of a comfortable dress shoe was oxymoronic in a category that valued traditional, albeit stiff, leather construction. But like many in the high-end fashion industry, Scarpe di Bianco has experienced an increasing trend toward all things comfortable, casual and sporty.

“Fashion trends continue to evolve, and one of the most recent growing trends is the casualization of the business work environment,” said David Naumann, vp of marketing for BRP, retail consulting firm. “Ties are long gone, and suits are dying. The new norm for men’s business footwear is sneakers, and dress shoes are becoming a rarity. Selling more casual products is now a necessity for high-end brands.”

Read Full Article: ‘Coming down from the mountain’: How the casualization of fashion is affecting traditional luxury brands 

Are You Using Advanced Analytics to Optimize Inventory?

Convenience Store Decisions – BRP Consulting finds only 33% of retailers optimize their inventory by leveraging advanced analytics. According to BRP’s 2018 Integrated Planning and Inventory Management Survey, most retailers (67%) are not leveraging advanced analytics to improve their planning decisions and optimize inventory.

The importance of enhanced data and analytics is not lost on retailers, however, there are further opportunities to optimize their planning and inventory.

While 67% of retailers are not using advanced analytics for merchandise planning, only 39% of retailers identified improved analytics as a top priority. This is a disconnect. As technological capabilities continue to advance, investing more resources into data utilization needs to be a critical objective for retailers.

“Analytics serve as an important tool in assisting retailers to find and interpret meaningful patterns in customer and inventory data to support decision-making,” said Robert Cuthbertson, vice president at BRP Consulting. “Insight into customer demand, product adjacencies, price sensitivity, reaction to promotions, demographics and more are key to drive merchandise plans and actions that maximize profitability. This is especially critical in an omni-channel environment, as understanding the preferences of disparate customer groups across different channels becomes more complicated.”

“The technology for AI tools has advanced dramatically in the past five years. Innovative new technologies can even predict where customers will be in the next hour or next day based on historical patterns,” said Ken Morris, principal at BRP Consulting. “AI is also helping retailers make better decisions on which store should fulfill an online order. While traditional logic would select the product from the closest store to the consumer, with machine learning techniques, retailers can assess the value of inventory in each store to make smarter fulfillment decisions. For example, if they can identify/predict that the item in inventory at the closest store will likely sell at full price, but the same item at a different store location will likely result in overstock and markdowns, the retailer can ship from the further store and maximize total profits.”

Read Full Article: Are You Using Advanced Analytics to Optimize Inventory?

Survey: Retailers missing chance to optimize inventory

Chain Store Age – A majority of retailers are not applying business intelligence in key areas of their supply chains. According to the BRP 2018 Integrated Planning and Inventory Management Survey, most retailers (67%) are not leveraging advanced analytics to improve their planning decisions and optimize inventory. In addition, only 39% of surveyed retailers identified improved analytics as a top priority.

“The technology for artificial intelligence (AI) tools has advanced dramatically in the past five years,” said Ken Morris, principal at BRP, retail consulting firm. “Innovative new technologies can even predict where customers will be in the next hour or next day based on historical patterns. AI is also helping retailers make better decisions on which store should fulfill an online order. For example, if they can identify/predict that the item in inventory at the closest store will likely sell at full price, but the same item at a different store location will likely result in overstock and markdowns, the retailer can ship from the further store and maximize total profits.”

Read Full Article: Survey: Retailers missing chance to optimize inventory

Study: Only 33% of retailers optimize their inventory with advanced analytics

Refrigerated & Frozen Foods Magazine – Most retailers (67%) are not leveraging advanced analytics to improve their planning decisions and optimize inventory, according to the 2018 Integrated Planning and Inventory Management Survey released by BRP, retail consulting firm, and only 39% of retailers identified improved analytics as a top priority.

“Analytics serve as an important tool in assisting retailers to find and interpret meaningful patterns in customer and inventory data to support decision-making,” says Robert Cuthbertson, vice president. “Insight into customer demand, product adjacencies, price sensitivity, reaction to promotions, demographics and more are key to drive merchandise plans and actions that maximize profitability. This is especially critical in an omni-channel environment, as understanding the preferences of disparate customer groups across different channels becomes more complicated.”

“The technology for AI tools has advanced dramatically in the past five years. Innovative new technologies can even predict where customers will be in the next hour or next day based on historical patterns,” says Ken Morris, principal. “AI is also helping retailers make better decisions on which store should fulfill an online order. While traditional logic would select the product from the closest store to the consumer, with machine learning techniques, retailers can assess the value of inventory in each store to make smarter fulfillment decisions. For example, if they can identify/predict that the item in inventory at the closest store will likely sell at full price, but the same item at a different store location will likely result in overstock and markdowns, the retailer can ship from the further store and maximize total profits.”

Read Full Article: Study: Only 33% of retailers optimize their inventory with advanced analytics

Only 33% of Retailers Optimize their Inventory By Leveraging Advanced Analytics, According to BRP Report

Advanced Analytics and AI are Key to Improving Planning Decisions

Boston, MA – February 14,  2019 – According to BRP’s 2018 Integrated Planning and Inventory Management Survey, most retailers (67%) are not leveraging advanced analytics to improve their planning decisions and optimize inventory. The importance of enhanced data and analytics is not lost on retailers, however, there are further opportunities to optimize their planning and inventory. While 67% of retailers are not using advanced analytics for merchandise planning, only 39% of retailers identified improved analytics as a top priority. This is a disconnect. As technological capabilities continue to advance, investing more resources into data utilization needs to be a critical objective for retailers.

Advanced analytics, or predictive analytics, offers retailers the ability to predict outcomes based on sophisticated algorithms and historical data. This requires human interaction to query data, validate patterns, create and then test use cases and assumptions. Now, with artificial intelligence (AI), also known as machine learning, planning systems can reassess models and reevaluate the data, all without the intervention of a human. AI is able to test and retest data to predict every possible customer-product match, at a speed and capability no human, or team of humans, could possibly achieve. The result is far more accurate decisions.

“Analytics serve as an important tool in assisting retailers to find and interpret meaningful patterns in customer and inventory data to support decision-making,” said Robert Cuthbertson, vice president at BRP Consulting. “Insight into customer demand, product adjacencies, price sensitivity, reaction to promotions, demographics and more are key to drive merchandise plans and actions that maximize profitability. This is especially critical in an omni-channel environment, as understanding the preferences of disparate customer groups across different channels becomes more complicated.”

“The technology for AI tools has advanced dramatically in the past five years. Innovative new technologies can even predict where customers will be in the next hour or next day based on historical patterns,” said Ken Morris, principal at BRP Consulting. “AI is also helping retailers make better decisions on which store should fulfill an online order.  While traditional logic would select the product from the closest store to the consumer, with machine learning techniques, retailers can assess the value of inventory in each store to make smarter fulfillment decisions. For example, if they can identify/predict that the item in inventory at the closest store will likely sell at full price, but the same item at a different store location will likely result in overstock and markdowns, the retailer can ship from the further store and maximize total profits.”

According to the 2018 Integrated Planning and Inventory Management Survey retailers’ current and planned usage of advanced analytics by planning area includes:

  • Merchandise Planning – 33% of retailers currently use advanced analytics for merchandise planning and another 48% plan to within three years.
  • Assortment Planning – 30% of retailers currently use advanced analytics for assortment planning and another 49% plan to within three years
  • Demand Planning – 31% of retailers currently use advanced analytics for demand planning and another 54% plan to within three years.
  • Product Lifecycle Management (PLM) – 22% of retailers currently use advanced analytics for PLM and another 33% plan to within three years.

BRP conducted the 2018 Integrated Planning and Inventory Management Survey to explore the current state of retail planning and to identify and understand retailers’ priorities as they strive to meet the needs and demands of today’s consumers. Platinum sponsors are Aptos and Mi9 Retail, gold sponsors are Celect and Retalon, and silver sponsors are ANT USA and enVista.

To download the 2018 Integrated Planning and Inventory Management Survey, visit:

https://brpconsulting.com/download/2018-integrated-planning-survey

About BRP

BRP is an innovative retail management consulting firm dedicated to providing superior service and enduring value to our clients. BRP combines its consultants’ deep retail business knowledge and cross-functional capabilities to deliver superior design and implementation of strategy, technology, and process solutions. The firm’s unique combination of industry focus, knowledge-based approach, and rapid, end-to-end solution deployment helps clients to achieve their business potential. BRP’s consulting services include:

Strategy | Business Intelligence | Business Process Optimization | Point of Sale (POS)
Mobile POS | Payment Security | E-Commerce | Store Systems and Operations | CRM
Unified Commerce | Customer Experience | Order Management | Networks
Merchandise Management | Supply Chain | Private Equity

For more information on BRP, visit http://www.brpconsulting.com.

Report: Retailers gearing up to meet customer needs

Retail Customer Experience – Many retailers, about 50 percent, aim to improve systems and processes over the next three years to better meet consumer needs and expectations, as well as streamline processes.

Today’s increasingly disparate solutions are driving the strategy, according to BRP’s 2018 Integrated Planning and Inventory Management Survey, according to a press release.

“Today’s customer journey requires retailers to use an integrated set of solutions, processes and organization to create and deliver the shopping experience consumers expect,” said Gene Bornac, senior vice president and practice lead, BRP, retail consulting firm. “Retailers are also focused on improving the integration of actionable customer data into their planning activities, as customer demand is a critical variable in today’s customer-led demand planning.”

Read full article: Report: Retailers gearing up to meet customer needs

Consumer-centric retail environment calls for data-driven planning

Luxury Daily – Despite the potential of leveraging consumer insights to guide merchandising decisions, many retailers are failing to effectively incorporate shopper data into their planning stages.

According to a new report from BRP, retail consulting firm, 54 percent of retailers are looking to better integrate consumer data into their planning process, making it the top priority for the next year. As retailers look to deliver the assortments and seamless shopping experiences that consumers crave, being able to mine real-time data from a wider set of sources can help stores drive sales and loyalty in a competitive environment.

“Many retailers aren’t using customer data in their planning because is difficult from many perspectives,” said Gene Bornac, senior vice president and practice lead at BRP. “Gathering customer data from multiple sources and systems and integrating it into planning systems and process is a lot of work and many retailers don’t have the time, or think they don’t, to solve this challenge.

“The retailers that use customer data in their planning process enjoy the benefits of more accurate forecasts, assortments and allocations, which results in optimized inventory and sales,” he said.

BRP’s 2018 Integrated Planning & Inventory Management Survey is based on an online survey of retailers.

Read Full Article: Consumer-centric retail environment calls for data-driven planning

Elevated Customer Expectations Require Integrated Planning Processes and Systems, According to BRP Report

54% of Retailers are Focused on Better Integration of Customer Data into Planning Activities

Boston, MA – December 13, 2018 – As customer shopping journeys continue to span across channels, it is imperative for retail planning processes, systems and organizations to be streamlined and integrated to meet increased customer expectations. Current disparate solutions must be transformed into one cohesive environment with the ability to offer customers a seamless shopping environment and the capability to deliver the right merchandise immediately – wherever it is needed. BRP published the 2018 Integrated Planning and Inventory Management Survey to offer insights on the key challenges and benefits of integrating planning processes and systems and identify where retailers are on this path to providing a holistic shopping experience.

“Today’s customer journey requires retailers to use an integrated set of solutions, processes and organization to create and deliver the shopping experience consumers expect,” said Gene Bornac, senior vice president and practice lead, BRP. “The good news is that many retailers realize their systems and processes need improvement and are planning to replace more than 50% of their planning systems within the next three years. Retailers are also focused on improving the integration of actionable customer data into their planning activities, as customer demand is a critical variable in today’s customer-led demand planning.”

To achieve an integrated retail planning model, retailers need to:

Align the organization

  • 40% of retailer currently have an integrated planning organization across channels and 73% of those indicate it needs improvement
  • Within three years, 87% of retailers plan to have an integrated planning organization across channels

Integrate planning processes

  • 43% of retailer currently have an integrated planning business processes across channels and 84% of those indicate it needs improvement
  • Within three years, 93% of retailers plan to have integrated planning business processes across channels

Implement technology

  • 39% of retailer currently have an integrated planning systems across channels and 82% of those indicate it needs improvement
  • Within three years, 89% of retailers will have integrated planning systems across channels

Prioritize customer data

  • 54% of retailers are focused on better integration of actionable customer data into their planning activities
  • 44% of retailers utilize customer feedback in real-time to impact in-season planning

To download the 2018 Integrated Planning and Inventory Management Survey, visit:

https://brpconsulting.com/download/2018-integrated-planning-survey

About BRP

BRP is an innovative retail management consulting firm dedicated to providing superior service and enduring value to our clients. BRP combines its consultants’ deep retail business knowledge and cross-functional capabilities to deliver superior design and implementation of strategy, technology, and process solutions. The firm’s unique combination of industry focus, knowledge-based approach, and rapid, end-to-end solution deployment helps clients to achieve their business potential. BRP’s consulting services include:

Strategy | Business Intelligence | Business Process Optimization | Point of Sale (POS)

Mobile POS | Payment Security | E-Commerce | Store Systems and Operations | CRM

Unified Commerce | Customer Experience | Order Management | Networks

Merchandise Management | Supply Chain | Private Equity

For more information on BRP, visit http://www.brpconsulting.com.