Last month, a large electronics retailer announced it is folding marketing responsibilities into merchandising, and restructuring the marketing team under a different kind of CMO - its Chief Merchandising Officer. While the shift may have been motivated by cost reduction and to streamline the division, the change in roles also shows the important new relationship marketers and merchandisers have with one another. It also indicates the changing relationship that marketers and merchandisers have with customer data.

To many, the organisational shift may seem unrelated to having an impact on customer data. However, due to digital transformation, the relationship between the two roles and data is very important. Digital transformation is leading to massive changes in the retail industry and is disrupting nearly every touch point, from product discovery to customer management, data and new technologies to collate and analyse the data are having an impact on the retail industry. To remain agile, keep up with new trends in the industry and deliver services to customer needs and wants, retailers and those in merchandisers and marketing roles must utilise customer data, to track customer details such as online purchase history and public sentiment via social – to provide users with seamless and customised shopping experiences. Retailers who use analytics and digital platforms to analyse the data will be best positioned for success and will be able to take a customer-centric approach to provide products and services that truly meet their customer’s needs. The following top tips will help marketers and merchandisers, in their developing roles to do this:

Merchandisers and marketers can no longer operate in silos

Traditionally, retail merchandisers and marketers have boasted very powerfully, yet separate responsibilities, like kings of product, both ruling from separate kingdoms. Merchandisers would decide on the product assortment and purchasing experience to dictate consumer choices, creating price promotion pressure on manufacturers when excess inventory existed, and rarely captured constructive feedback from end consumers, ensuring future purchase orders would be based on historical trends.

Marketing teams would shape product branding and deploy extensive capital pushing advertisements and promotions to attract customers, while often not fully understanding why conversions were single digit at best. Alternatively, marketers attempting to connect with customers by creating an emotional response to a brand or product would risk miserable failure if they didn’t hit the bull’s-eye. This is where data can add value and provide insights on what customers want and how best to reach out to them.

Customer data brings together product, pricing and promotions

To become a customer-driven merchandising organisation, retailers need to disrupt their internal processes by shifting to an algorithmic approach. Placing the customer data at the forefront of all decision-making allows retailers to respond to customer needs with tailored offerings. By utilising tools that combine macro trend and social sentiment tracking at the individual product level, companies can accurately forecast demand, pinpoint the exceptional experience a customer is seeking, and prioritise product feedback. This data allows merchandisers to be constantly aware of customer needs and pivot the product assortment to reduce inventory and price discounting – thereby maximising revenue potential and becoming collaborators to manufacturing by providing them with constructive feedback on products.

Marketers can take advantage of this data by amplifying individual customer voices through influencer campaigns that put real human faces to branded marketing efforts to cultivate greater connection and authenticity. Marketers furiously spending capital on social media advertisements attempting to generate as many ‘likes’ as possible don’t likely result in new revenue growth. Focusing solely on influencers and using a ‘pull mechanism’ to create relevant campaigns has a far greater return on investment than spending money on generic social media marketing.

Organisations must become data-driven in order to thrive

The ‘two-way conversation’ is more influential than ever before. In the age of social feedback, it is collective customer purchasing power that ultimately decides the value and the acceptable cost of the product – not retailers or manufacturers. It is imperative to differentiate your organisation through better data. Marketing and merchandising leaders must actively listen to customers, which can only be done through generating data insights and acting on them in real-time. If retailers don’t pivot their structure accordingly, the behemoth Amazon will continue to eat their lunch – along with other companies that are becoming truly data-driven.

It is important that people in marketing and merchandise roles, work together closely and keep in mind the use of data and implement a digital strategy that will help to embody a consumer-centric approach. As the roles work closely together and customers' wants become increasingly diverse and as they demand a better and tailored shopping experience, companies’ success will be decided on the ability to collect and analyse customer data to generate new solutions that can provide better customer experiences. Marketing and merchandising teams working together to provide customers with a better experience and all the information received from data will be truly successful.


By Rohit Gupta, head of consumer digital strategy at Wipro Digital

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