Today’s web- and mobile-enabled shoppers are demanding more relevant and customized brand choices. From marketing channels and messaging to item selection and technology implementations, consumers are moving to the center of business decisions. To drive traffic and purchases to store locations, retailers are utilizing more sophisticated assortment planning and optimization solutions, and are tapping into the browsing and buying behaviors of targeted audiences to make better inventory choices.
Dick’s Sporting Goods, an outdoor apparel and merchandise retailer, implemented JDA’s Assortment Optimization solution to localize inventory more effectively based on customer preferences and demand. Murrey Wolff, Senior Business Analyst at Dick’s Sporting Goods, shared insights into the retailer’s implementation during the JDA FOCUS conference. The event took place April 29 to May 1, 2012, at the Aria Resort and Casino in Las Vegas.
“Due to our variety of goods, stores and geographic locations, we had to determine how to merchandise efficiently for specific audiences,” Wolff told the audience. “There’s an overall goal standard for retailers to keep the shopper at the center. If you’re creating assortment without thinking about the shopper, an assortment is worthless.”
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Wolff explained that Dick’s Sporting Goods business model is very complex: When the retailer first implemented the JDA Assortment Optimization solution during March 2012, the brand consisted of an intricate model of apparel and goods, and different store sizes and fixtures. By tapping into consumer analytics, the retailer was able to categorize assortments based on periods of high demand, as well as specific locations. Moreover, the Dick’s Sporting Goods has taken the guesswork out of assortment planning: now it is preventing out-of-stocks on highly demanded items and avoiding excess inventory more consistently.
“At the end of the day, the shopper determines the assortments,” Wolff said. “It is vital for retailers to make sure all decisions are shopper-driven. Retailers need consumer insights as a primary tool not only for merchandising decisions, but to create more effective marketing campaigns.”
Assortment optimization solutions also allow retailers like Dick’s Sporting Goods to avoid biased decision-making from vendors, Wolff added. With seamless access to real-time buying patterns, retailers will have access to impartial planograms, leading to more efficient SKU rationalization, and increased incremental sales volume.
“Vendor/retailer relationships rely on the vendor’s ability to create efficient planograms,” Wolff said. “Vendors have to tap into analytics to understand why shoppers buy specific items so retailers are confident that vendors won’t create assortments based on their products alone.”
Wolff added that JDA’s Assortment Optimization allowed Dick’s Sporting Goods to improve space management in store locations. “Before I started using this solution, I was creating assortments without knowing how they would do on the shelf until I later reviewed the planogram,” Wolff said. “Now, we’re able to take space awareness into account before we build specific assortments.”
Clustering features allow retailers to analyze product performance to make better inventory decisions based on market, POS and consumer demographic data. Moreover, merchants can determine optimal product mixes that meet consumer preferences and demands.
