RESEARCH STUDY: Retail Merchandising and Marketing Alignment

Retail Research

The gap is getting larger between strong retail performers and all others. If you've had a difficult few years of financial performance, the news is not good. The rules have changed. You can't make the same types of investments you have made in the past. It's time for ambitious change to the way you develop strategy, align your organization, tailor your assortment and pricing and interact with consumers.

The first step is to recognize that what you've done in the past will result in more of the same. If you think the consumer is coming back, you're wrong. You need to go get them. You need to recognize the shift the consumer has made in the way they research, shop and transact.

The second step is to realize that your organizational structure is most likely your number one inhibitor to change. As Marketing becomes more powerful in how you interact with consumers (not just communicate with them), you need to address how Marketing is aligned with Merchandising, Planning and the Executive team.

When you define how you're going to address this, remember that the new retailing word for success is 'agility'. Consumers will continue to change the methods they use to engage with you. Make sure your organizational construct reflects this potential for change.

The third step is to invest more in pricing and localization. This is the foundation for future success and how you can differentiate your business. With the proliferation of channels and websites that broker or sell everything, it will be harder to differentiate strictly on product assortment. Your opportunity will be the combination of branding and "localized mass-customization" of pricing and product.

Based on our survey, the industry appears to be over-investing in promotions. As we've learned over the last decade, this is not a sustainable strategy and does not set the foundation for long-term success. So, you should be careful to invest in promotions. And, if you're investing in promotions, make sure you're doing it with a pricing and localization strategy framework.

If you take one thing away from this survey, we hope it is the call to be ambitious with your strategy and investments. There are too many stories in our industry about retailers who stayed on a traditional path while emerging companies disassociated them from their customers (Amazon, Apple iTunes, Netflix, et al). If you have brand, you have a future. Be ambitious.

Study Results

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