Retail Merchandising Software

One of the most significant advances in merchandise planning is the widespread availability of computer software that gives retailers an excellent support mechanism to systematically prepare forecasts, try various assortment scenarios, coordinate data for category management, and so forth. In an era when many retailers carry thousands of items, merchandising software is a part of every­day business life. See Figure 14-14.

Some merchandising software is provided by suppliers and trade associations at no charge— as part of the value delivery chain and relationship retailing. Other software is sold by marketing firms, often for $1,500 or less (although some software sells for $25,000 or more). Let’s discuss the far-reaching nature of merchandising software.

1. General Merchandise Planning Software

Some retailers prefer functionally driven software; others use integrated software packages. The Container Store, the national storage and organization specialty retail pioneer, is an example of the latter. It utilizes MicroStrategy (www.microstrategy.com), a mobile-enabled platform that empowers store employees with real-time business intelligence from inventory systems. The data help analyze various store operations, sales performance, customer insights, and customer loyalty through easily configured mobile dashboards—without the need for information technology sup­port. This enables Container Store leadership to access information throughout the firm’s entire network of stores and its supplier interface through a MicroStrategy dashboard named “The Score” (using the game analogy). Store personnel thus gain insights into trends and data that can be used to monitor, maximize, and benchmark performance against store and company goals.²⁷

2. Forecasting Software

Many retailers use big data (culled from customer insights, loyalty card information, and interac­tion across multiple channels) and advanced analytical systems to make merchandise forecasts. JDA Software (www.jda.com) is one of the firms that offers a wide range of products. Its Retail. me solution is designed to help retailers forecast, plan, and develop highly localized assortments across stores by incorporating the retailer’s in-house customer and supply chain data along with third-party information from suppliers, consultants, and the industry. Retail.me is cloud-hosted and allows for end-to-end connectivity and synchronization with multiple organizational processes for the mobile-enabled omnichannel retailer. Hibbett Sports, a chain with more than 1,000 stores, uses the JDA Retail.me application to meet the challenge of planning and managing localized assortments across its stores and multiple channels, including mobile apps, to deliver its target ROI.²⁸

Firms such as SAS (www.sas.com) offer sophisticated software for retail forecasting pur­poses. This software can be used to analyze and forecast events that occur over time. Retailers are able to discern trends that were not previously noticeable, and they can anticipate ups and downs to better plan future activities.²⁹

3. Innovativeness Software

Today’s software provides detailed data rapidly, thereby allowing retailers to monitor and more quickly react to trends. Processes that once took months are now done in weeks or days. Instead of missing a selling season, today’s retailers are prepared for the latest craze by crowdsourcing new product ideas from generation to concept testing. With crowdsourcing, retailers can raise funds online from small investors who do not receive any ownership.

As part of Macy’s (www.macys.com) retail innovation strategy to provide a frictionless omni­shopping experience for Macys.com and Bloomingdales.com customers, Macy’s Idea Labs is a central online hub for idea generation, discussion, analysis, and experimentation. It is supported by the SpigitEngage platform, a social collaboration product from Spigit (www.spigit.com), which encourages Employees and external stakeholders across multiple functional areas and locations are encouraged to embrace disruption, crowdsource innovation funding, and execute technology excellence in acquiring and retaining Macy’s customers.³⁰

4. Assortment and Allocation Software

A number of retailers employ merchandising software to better plan assortments. Leading footwear and accessories retailer DSW has to ensure that its merchandise assortment keeps pace with fashion and style trends. Among its goals are that it has the right sizes in appropriate quantities (or packs) delivered at the right time during the fashion cycle to each of its more than 375 stores, E-commerce warehouse, and 345 leased departments in U.S. retailers under the Affiliated Business Group banner.  SAS Merchandise Intelligence Solutions software (which includes SAS Size Profiling and Pack Optimization) helps DSW managers determine location-specific size and pack optimization for each shoe style and for unit replenishment orders in a way that results in fewer markdowns while also reducing stockouts. This is particularly effective with seasonal items such as sandals that have a shorter shelf life than dress shoes. Store managers have greater confidence in ordering few quantities of hot seasonal styles while achieving good sales performance and avoiding end- of-season liquidation. Vendors wary of markdowns and the effect this has on their brand equity are cooperative because they are alerted well in advance to the need for different pack sizes.³¹

5. Category Management Software

A wide range of software programs is available to help manufacturers and retailers deal with category management’s complexities. A few retailers have even developed their own software. Programs typically base space allocation on sales, inventory turnover, and profits at individual stores. Because data are specific to each store, space allocations reflect actual sales. Here are some examples of category management software:

• SAP for Retail (http://go.sap.com/solution/industry/retail.html) from SAP
• Symphony GOLD (eyc.com/gold) from Symphony EYC
• Shelf Logic Enterprise (shelflogic.com/enterprise-edition.html) and Shelf Logic Master (www.shelflogic.com/master-edition.html); the Enterprise version is $4,995 and the Master version is $995.
• JDA Space Planning (www.jda.com/solutions).

Source: Barry Berman, Joel R Evans, Patrali Chatterjee (2017), Retail Management: A Strategic Approach, Pearson; 13th edition.