Have retailers forgotten the value of a great buyer?
If the volume of articles published recently are a reliable indicator, one might soon conclude that "retail success" today is based strictly on Big Data-based, omnichannel shopping experiences.
Those experiences are supported by tech-toting associates aiding those lucky shoppers who, while connected to in-store wireless networks, are reviewing product information and personalized (CRM-based, of course) offers with mobile apps, all the while sharing images of products they might want to purchase via social media and gathering opinions from friends as they move along the path to purchase. Heady days indeed!
Noticeably absent in these discussions is mention of the role of that committee chairperson, formerly known as a buyer — the lucky individual who sits in the middle of the worlds of planners, assorters, sourcers, product developers, financiers, supplier relationship managers, visual presenters, pricers, replenishers and pundits, and who on occasion actually makes a product decision and writes an order to procure something for the organization to sell. Was the "merchant prince" figuratively beheaded by the "tech revolution"?
But seriously (well maybe all of the above was serious), in retail the statement, "If you don’t put the right product in front of the customer, nothing else matters," does come to mind. The futility of getting everything else right and the product wrong is a reminder that the selection or creation of a great collection is a fundamental that seems to be overlooked these days.
So how do retailers prioritize and recognize the contribution of a great buyer? How about comparing the cost of, say, one data scientist — including all the computer gear, data and support systems necessary — versus, say, one fashion buyer? Check it out, but the probability is that the loaded cost of the data guru is between two to three times that of a fashion buyer. Prioritization indeed.
Despite (or some might say in spite of) all of the tech above, retail success still has some simple concepts that ring true. Sell products at better margins (aka buy better), then sell additional products to each customer by creating a compelling (localized) collection, one that intrinsically lends itself to increasing market baskets and share of wallet.
Discussion Questions
Are retailers placing enough investment into the development and retention of great buyers, as well as the technology that directly supports their efforts? How big a challenge is balancing tech and trend smarts on merchandising teams?
Poll
BrainTrust
Paula Rosenblum
Co-founder, RSR Research
Cathy Hotka
Principal, Cathy Hotka & Associates
Where have the retailer “trend smarts” been hiding over the past five years? Merchants have been throwing digital technology at the same analog strategies for years. If the merchant trend teams were alert, they would have foreseen the need to address the digitally empowered shopper in a meaningful manner.
Seven years ago when introducing the spectrum of in-store technologies available to a Fortune 500 DIY retailer, a senior old school executive wasn’t buying into the broader concept based on his body language. I stopped and called him out on his point-of-view. He emphatically stated, “This is not our shopper. We’re a hardware store and people come in to buy nails.” At which point a woman in the back of the full auditorium addressed her colleague directly. “You’re right,” she said. “That is our shopper today. Our shopper seven to 10 years from now won’t know how to shop our stores without technology.” She was VP of Trends and her predictions have been clairvoyant.
I still believe that technology is an enabler, like many of us have said for years. Just like autonomous cars will still need human intervention for the foreseeable future, so will the retail merchant/buyer/merchandiser, etc. functions. The tools available today for buyers are more compelling than ever. However, we still have far too many “forced” discounts and out-of-stocks due to inaccurate forecasts, and other factors that may be heavily reliant upon technology in many retail organizations.
I think the buyer is still a valuable role that can leverage the insights gained by data scientists and the greater team. There should still be a chief merchant position in order to ensure the final decisions are being made with the help of technology, but not exclusively based upon it.
Its not just Big Data that stifles innovation. It’s the long supply chain caused by far away sourcing. This requires big bets and big bets demand conservatism and so you’re left with a sea of sameness.
The value of the retail buyer has probably not been overlooked, however, I have witnessed a departure from a merchant mentality to a numbers game. Is this good or bad? Well, if you look at same-store sales across most classes of trade, I guess the new-age buyer’s role is performing well. On the other hand, if you are a retailer looking to project a unique personality and provide retail excitement, I personally believe buyers should be provided leeway to trust their gut.
Bringing new and differentiated products to the shelf is still one of the motivators that keep shoppers coming back time and time again. I fear if buyers only look at the numbers, the customers will become more numb.
The hype would indicate that we’re all enjoying Big Data-driven omnichannel experiences, but the simple fact is that it’s not true. Few retailers can enable customers to move seamlessly between channels, and fewer still have full visibility into people, merchandise and process. We’re moving in this direction, but to declare victory now is way premature. The merchant still reigns.
Having just returned from the IBM Insights conference, I had to chuckle when I saw this discussion. In the midst of the eye-popping array of Big Data analytic advancements and announcements presented, many mentions were made of how data complements, and does not always replace, good old gut instinct. I’ve just penned an article about this very topic, but the upshot is that balance is being embraced — even by the technorati!
All the technologies — Big Data, analytics, omni-channel, mobile, social — are a means to help retailers understand and serve their customers. In fact, the retailers that use these technologies to own the journey of their customers will be the ultimate winners.
At the end of the day, great buyers still need data to make informed decisions. Better, more easy-to-read and interpret data means you can get away with less skilled buyers. Focus should be on improving technology to provide buyers with better tools while retaining the good buyers that you already have.
I was working with a client recently and he made this statement. “No assortment planning software on the market today offers a feature that associates sales based on best customer bands! Instead the software plans simply on what sold last year; in which case, the buyer may be buying for the bargain hunter rather than the high margin customer.” See more here.
I know, I know, we are not talking about assortment planning but we are talking about buyers and data. If the buyer were to base all of their moves on data provided, they might very likely be buying for the wrong customer.
The thing is, the data is there, but it resides in multiple places that are not so easy to access. It takes a good buyer to understand the nuances and smart retailers are onto that.
And that’s my 2 cents.
We may well depend upon machine learning to make data-driven choices among available offers and product options, but the robots can’t tell us where colors or hemlines are going to go next. Neither can algorithms project consumer response to a new CPG category or product form.
Human judgement still matters in merchandising. The value of digital tools is their ability to sop up the sheer volume of routine decisions, leaving the art to those composed of flesh and blood.
I think the disappearance of the buyer began long before “Big Data” with consolidations in the retail industry (both the industry itself and the companies that supply it). It’s not for nothing that we frequently hear some (retailing) merger justified on the grounds that it will give them greater leverage with suppliers (who, in turn, are also often merged companies). And, to be, honest much of the need for local specialization is going away as the world becomes more homogenized (at least that’s the perception).
So put the two trends together, and it means that while buyers aren’t necessarily unneeded, buying is not the creative, “human touch” profession it once was.
NO! Definitely not enough development of great buyers at retail now. I think that’s why we’re seeing such bland product across the board, especially in apparel. I was just told by a former employee of a large apparel retailer that merchants there had to have had a 28 on their ACT to qualify. What? How many great buyers, fashion forward thinkers and pure creatives were cut out of that company? Is their job now just looking at data and reporting on it, or knowing when something is “hot” without looking at data?
Good taste, fashion sense (fashion as it applies to any new category of merchandise, not just apparel) and immense curiosity rank higher in my book than any test score. For starters, I’ll bet Top Shop or Forever 21 would agree.
I read a review recently of a stage musical where the reviewer said that it could have been written on a computer — what he meant was that all the elements were there, but the show just didn’t feel true and was formulaic.
Now what does this have to do with this article? Well, we mustn’t forget that people are human and sometimes do not do what the data says they will, and also that they can spot when they are being cynically being sold to. Over the past few years we have seen buying departments being more concerned with “attributes” to enter onto a system rather than spending time with vendors and (dare I say it) on the shop floor talking with customers. As with all developments we need to find new ways of working — but we should not forget that a human touch is sometimes needed as well as complex data.