Part 1 of the Essential Guide to Merchandising Transformation
Written by Jenny Clay, Bluestock Advisor Consultant
Winners Keep on Winning
Merchandising transformation isn't just about change—it's about strategic evolution to enhance customer experiences and drive business value. Many large retailers in the U.S. have undergone merchandising transformations, some even multiple times in the past decade. The most successful ones took the time to define their goals, involve their teams, and create a multi-year plan for significant improvements, guiding their organizations through the process of change.
Leaders Set the Course
Transformation from Above
The first step in a transformation strategy is to ensure the Enterprise Strategy is clear and the right management team is in place. The retail leadership team must then be empowered with a Portfolio Strategy. Nothing is better at clarifying priority, investment, and merchandising tactics. This tool defines the relative importance, the role, and the intent for each category within the organization. MBOs, or Management by Objectives, are based on Portfolio Strategy. If merchants stray outside of its guidance, there are inevitable consequences.
Mapping the Vision
Processes and Capabilities
In today's competitive landscape, flawless execution is non-negotiable. Bluestock Advisors work with clients to create an ‘Enterprise Strategy Map’. This visualizes which capabilities and processes are most important in enabling the retailer to realize their differentiated vision. Implementing early process improvements creates visible wins for an organization. Using “Scrappy” tools (pragmatic or improvised solutions) to create glimpses of automation can help the team see what may be possible as the Transformation journey continues.
The Numbers Don’t Lie
Data brings quick wins
As the organization achieves small victories and gains confidence, the use of data analytics becomes more crucial. This prepares the organization for bigger improvements, like upgrading systems and adopting advanced tools that analyze both internal and external data. These tools help understand customer demand, predict sales, and wisely allocate resources for maximum profit. MBOs, or Management by Objectives, are defined based on Portfolio Strategy. If merchants stray outside of its guidance, there are inevitable consequences.
Transformation of a Merchandising team and its supporting infrastructure may take years, but the payoff is measured in decades. In future posts, we’ll share more of our experiences and lessons learned from big winners in the retail space that you can apply to your own business.