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A marketplace of one

The retail industry is refreshed, refocused and ready for smarter merchandising

The consumer segment has changed. Today's consumers are leveraging devices and information to an ever-increasing degree—and demanding a more personalized and interactive retail relationship.

These macro shifts in behavior have significant implications for retailers. Consumer expectations are higher than they've ever been: tailored promotions, consistently available products and overall better quality and value for money.

To adapt, retailers need a better understanding of customer preferences and the implications those preferences have for their business, their products and services and their channels. By applying customer insights, retailers can optimize their assortment plans which, according to IDC Retail Insights, can help drive an incremental sales lift of 3 to 7 percent1. This view of a more customer-centric merchandising process and the competencies needed to enable it make up what IBM calls smarter merchandising.

Chart: Smarter merchandising: competency outcome map. Source: IBM Center for Applied insights.

Smarter merchandising is a journey that retailers embark on if they are seeking to meet the needs and wants of their target customers through predictive customer analytics while also delivering on their merchandising strategy with consistent, agile execution. Smarter merchandising can help retailers:

  • Sense customer buying behavior
  • Align products and service
  • Deliver with consistency and agility

Together, these create a more agile merchandising function, helping to deliver merchandise and assortment planning optimization and netting quantifiable benefits for retailers. The IBM Center for Applied Insights has assembled an executive brief explaining how retailers can model the potential economic benefit of investing in predictive analytics and assortment planning optimization.



1. Hand, L., Ivano Ortis and Alessandro Casoli. "Vendor Assessment: Retail Demand Intelligence Vendor Maturity." Global Retail Insights, An IDC Company. July 2009