In my last post, I discussed the dramatic increase (550%) in the use of social media by merchandisers in the past year, revealed by our 2014 Merchandise Planning and Allocation Benchmark Survey. After reading our survey report, a few retailers have asked us for ideas on how they can or should be using social media insights in their merchandise planning processes.
Here are a few ideas on how to use social media for merchandise planning.
Tapping the value of social media beyond brand awareness
Beyond the obvious reason to increase brand awareness and loyalty, social media is becoming an imperative marketing and merchandising tool for retailers. Social media has created an avenue where retailers can actively engage their customers and “listen in” on the social dialogue. In addition to facilitating open communication with consumers, it also allows retailers to glean valuable insight into the preferences of their target market. This real-time insight to customer preferences enhances retailers’ merchandising decisions to offer the right products, at the right place and at the right time.
Enhancing merchandising decisions
Leveraging a strong social media campaign, retailers can influence the trends and key items for the season. Retailers can incorporate social media feedback on trends when planning their future lines to help drive merchandise decisions that reap substantial financial benefits such as a reduction in markdowns, higher gross margins and increased sales.
Traditionally, assortment decisions are made in a meeting with a handful of people. Retailers can now enhance assortment decisions based on consumer opinions from social media platforms. For instance, retailers can test different styles/assortments and receive a quick response that helps segment the ‘likes’ based on products, demographics and psychographic attributes to augment other data in merchandise planning decisions.
Beyond planning, social media insights can also play a roll in managing order levels and replenishment. Based on real-time social media responses and feedback on new merchandise, retailers can adjust order levels, allocation and replenishment to maximize margins.
Other ideas for social media
We foresee social media becoming more fully integrated into retailers’ e-commerce sites. Retailers are already making it easy for customers to post recent purchases and discuss products on social media sites like Facebook. The next step is to enable consumers to buy directly from the social media sites without having to navigate pages in the e-commerce solution. This technology is currently available and provides a prime opportunity for retailers to make it easier for the consumer to get what they want, whenever and wherever they want it and in real-time.
As always, I welcome your thoughts and opinions. Please share your comments below.