Retail merchandise buying is a critical component of any retail business. It involves selecting and procuring products to sell in stores or online, and can make the difference between a profitable and unsuccessful business. While the process of merchandise buying involves both creativity and data analysis, many retailers tend to focus solely on the latter. In this post, we’ll explore the art and science of retail merchandise buying, and provide specific recommendations for retailers to balance these two elements.
The Art of Retail Merchandise Buying
First, the art of retail merchandise buying is the creative and subjective aspect of the process. It involves selecting products that will appeal to customers’ tastes and preferences, and creating an emotional connection between customers and products. However, many retailers tend to overlook the importance of this aspect and rely solely on data analysis to make buying decisions. Here are some recommendations for retailers to master the art of retail merchandise buying:
Understand your target customers’ emotional triggers
To curate a product assortment that resonates with customers, retailers need to understand their emotional triggers. This involves identifying the values, beliefs, and aspirations that drive their purchasing decisions. Retailers can gather this information through customer surveys, social media analysis, and focus groups.
Focus on product curation, not just selection
Retailers should not just focus on selecting products to sell, but also curating them in a way that tells a story and creates an emotional connection with customers. This involves selecting products that complement each other, and presenting them in a visually appealing and cohesive way.
Use visual merchandising to create an immersive shopping experience
Visual merchandising is a powerful tool that can be used to create a memorable and immersive shopping experience. Retailers should use product placement, lighting, and signage to showcase products and encourage customers to explore the store. By creating a visually appealing and engaging environment (sometimes using new software like Generative AI), retailers can increase sales and customer loyalty.
The Science of Retail Merchandise Buying
Now, the science part of retail merchandise buying involves the data analysis and objective decision-making aspects of the process. It involves using quantitative and qualitative data to inform buying decisions and minimize risks. While many retailers prioritize this aspect, it is important to balance it with the art of merchandise buying. Here are some recommendations for retailers to master the science of retail merchandise buying:
Use data analytics to optimize your product assortment
Retailers can use data analytics to optimize their product assortment by analyzing sales data, customer behavior, and market trends. By identifying product gaps and opportunities, retailers can adjust their buying strategies to maximize sales and profitability.
Balance your product assortment with inventory management
Inventory management is a critical component of merchandise buying. Retailers should use sales data and forecasting techniques to determine optimal inventory levels for each product, and adjust their buying strategies accordingly. By balancing their product assortment with inventory levels, retailers can avoid stockouts or overstocking.
Incorporate artificial intelligence and machine learning into your buying strategy
Artificial intelligence (AI) and machine learning (ML) are powerful tools that can be used to optimize merchandise buying. By analyzing vast amounts of data and identifying patterns and trends, AI powered retail merchandise planning software can provide valuable insights into customer behavior and market trends. Retailers should incorporate these technologies into their buying strategy to make informed decisions and stay ahead of the competition.
TL;DR – To be successful in merchandise buying, retailers must balance the art and science of the process. They must use their creativity and intuition to identify new product opportunities and create an emotional connection with customers, while also using data analysis to inform their buying decisions and minimize risks. By prioritizing both aspects of merchandise buying, retailers can optimize their buying strategies and increase sales and profitability.
