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Friday, April 20, 2012

Segmentation plus Merchandising

Merchandising has been around for a long time.  We did lots of experimentation trying to understand the specific behavior of consumers in laboratory, virtual and actual stores.  In each case with carefully interviewed real shoppers.  We also sought to understand how these 'old' behaviors linked to new behaviors like those online, and especially in mobile settings.   It all comes down to the specific behavior of consumers in this rapidly changing domains.     How does the behavior of people online and in brick and mortar vary?   General segmentation of these behaviors has always existed, but how is it known quantitatively and accurately?   Leading to specific decisions that can lead to lower costs and increased profits.   This is a relatively new challenge for analytics.

In a recent RetailWire, this is expanded,  note the mention of three decades work, which I participated in from both the experimental dimension and dealing with the data itself:

" ... Say your final farewell to the mass market. It's taken at least three decades of work and experimentation but, thanks to technology, truly customer-focused, targeted merchandising and marketing is now finally possible.  Data analytics now gives retailers the ability to define their customer segments based on shopper needs, behaviors and traits, and specify marketing approaches that meet the demands of each segment ....  As discussed in a recent Shopper-Centric Retailing eBook produced by DemandTec, an IBM Company, combining merchandising optimization technology with shopper segmentation now gives retailers the power to identify and incorporate a host of segment behavioral differences into their merchandising and marketing decisions..... " 

The power is suggested is considerable, especially when linked to new engagement capabilities: in-store, on mobile, and producing accurately tailored merchandising.     It also connects well to the levels of investment made in each of these contexts.  Marketing mix is a challenging process.  Improving and even optimizing the results are now made possible by a new realm of data that now makes possible new accuracy in merchandising.

Read the short article linked to above and the full white paper attached for more detail.   I am optimistic that we will continue to see improvements in this area.    More data and improved analytics will lead the way.  Smarter commerce will result.

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