Page 271 - DMGT552_VISUAL_MERCHANDISING

Visual Merchandising

Notes
Table 14.2: Assortment Process – Which Items should Stay or Go?

From traditional metrics ... to customer-centric metrics Customer impact
Item velocity Overall customer value The store is loyal to their best
customers
Item margin Trip value The store considers the total
customer visit
Item image contribution Item exclusivity The store knows which items
are not substitutable

5. Insight-led collaboration between trading partners: Leading pairs of trading partners are
achieving breakthrough results by combining a new level of customer understanding
with the recognition that they can create greater customer value by working collaborating
vs. working separately or at cross purposes.
How are they making progress while their competition is still “stuck”? They are replacing
traditional store- and brand-centric thinking with a customer-centric approach. This is
improving the dialogue and the results for companies which can set aside yesterday’s
model:

Table 14.3: Traditional Store- and Brand-centric Dialogue vs Emerging
Customer-centric Dialogue

Area Traditional store- and Emerging customer-centric dialogue
brand-centric dialogue
Desired customer How can we drive more How can we understand our best mutual
behaviours customers into the store? customers and grow their trip frequency?
Category growth Can we grow 7 percent this Can we grow 12 percent by improving share
drivers year? of wallet by 20 percent among our best
mutual customers?
Merchandising We will trade off endcaps We can maximise sales by sharing the endcap
between your brand and our because your brand and our brand attract
brand. different customers.

Various examples reflect the operational or category level, it’s also critical to establish a
practice of collaboration at the top-most levels of the trading partners. The most successful
collaborative efforts occur when the executive leadership of the retailer and the
manufacturer each lay out a clear vision of what they are trying to achieve, play back their
understanding of what the other party is aiming for, and propose concrete ideas for
working together to advance their overlapping strategic aims, all grounded upon a focus
on customers and how to win with them.
6. Relevant, targeted, and brilliant activation: For years, marketing and media departments
have told brand managers and merchants that optimised marketing plans were those with
the lowest CPM (cost per thousand) for reaching a broadly defined audience with the
desired number of contacts (frequency).
But times have changed. The broader availability of granular shopper data, the proliferation
of vehicles for behavior-based targeted marketing, and the growing demand for marketing
accountability means that no one should have to guess (or give up) regarding marketing
ROI.

7. Continual measurement and improvement: Becoming customer-centric creates sustainable
growth because it isn’t a one-time event. To drive steady growth, you must have an active

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