Better merchandising will elevate the customer experience
Through a special arrangement, what follows is a summary of an article from COLLOQUY, provider of loyalty-marketing publishing, education and research since 1990.
When it comes to the brand experience, retailers should be thinking inside the box — that is, the box of detergent, cereal or juice on the shelf. The product itself can influence the brand experience as much as a mobile app, website or store layout. Thinking inside the box is a matter of extending the retailer’s customer-committed focus to include its manufacturer partners.
The first step is sharing data insights. This is one of the key principles of enterprise loyalty: pushing customer purchase data outside of marketing to all organizational departments. Enterprise loyalty strategies can inform better decisions regarding price, store location and — of most importance — merchandising.
What follows are four key areas where manufacturers and retailers can collaborate to elevate the brand experience — and product sales — through merchandising.
Traditionally, manufacturers design trade promotions using broad-based market data. By re-focusing promotions to appeal disproportionately to the most frequent and highest-spending customers, both retailer and manufacturer are ensuring the most bang for their promotional buck.
In addition, by tailoring promotional discounts to levels that reward valuable customers, retailers and manufacturers can save some dollars for other, more valuable promotions.
Manufacturers usually send direct communications to consumers through freestanding newspaper inserts, direct mail coupons or coupons printed at the register. By analyzing their retail partners’ customer data, manufacturers can become more familiar with shopper preferences and craft more targeted promotions, resulting in more relevant offers.
As with consumer promotions, analyzing a retailer’s customer sales data can help a manufacturer develop more effective media advertising campaigns by revealing which customers are disproportionately likely to purchase its products.
Product development and innovation
Customer insights also reveal gaps in the retail assortment. The data can help the retailer determine if products would benefit from expanded distribution or shelf space, or whether to launch an entirely new product.
As with any strategy, enterprise loyalty used to enhance merchandising should be applied with clear performance goals and incentives in place. All managers should understand their role in achieving customer-committed merchandising plans, and should be recognized when meeting their metrics.
What are the hurdles preventing vendors from better utilizing retail partners’ customer data for collaborative purposes? How can enterprise loyalty help drive merchandising decisions?