25 Hot Merchandising Ideas

1. Be "In the Zone." Canadian specialty apparel retailer Northern Group Retail Ltd. is implementing zone pricing with help from ProfitLogic software. "In the first week the software was in production, we generated 60,000 additional gross margin dollars on one stock keeping unit in one store cluster," says Michael Stanek, chief financial officer, Northern Group Retail Ltd. "We were prepared to mark down the merchandise 30 percent, based on gut instinct, inventory levels, and the product's lifecycle, but the software recommended the company 'hold steady' on prices. We followed the analytics-driven suggestion and reaped extra dollars."

2. View Globally. Thanks to demand-chain management solutions from Evant (formerly NonStop Solutions), O'Reilly Auto Parts gained a global view of inventory, while reducing inventory costs. The company now manages approximately 90,000 SKUs as compared to 40,000 SKUs previously. Inventory was initially reduced by $66 million and O'Reilly has seen a subsequent reduction of another $20 million. "The intangible benefits of having the right inventory at the right time for our customers are difficult to quantify, but we know the financial impact is very high," says Mike Williams, vice president of IS.

3. Maintain a Perfect Fit. To effectively match customer desires with merchandise assortments, buyers at Toronto-based Harry Rosen, a retailer of high-end men's wear, use RetailAnalyst from GERS Retail Systems. "The solution provides our buyers with powerful, quick and easy-to-use analytical tools," says Steve Jackson, Harry Rosen's director of internal systems. With ready access to data about sales, inventory and vendor performance, Harry Rosen buyers can better identify fashion trends and maximize selling opportunities.

4. One-to-One is Number One. Israeli retailer Super-Pharm uses data mining software from Sagarmatha to detect sales opportunities in individual households. Sagarmatha's software analyzes several thousand consumer characteristics simultaneously and automatically generates personalized coupons and other one-to-one merchandising incentives for distribution by direct mail, kiosk and Web site. It also detects expandable consumption opportunities and lost and declining shoppers. As a result, Super-Pharm has increased average sales per loyalty card by 24 percent.

5. Think Young. Multi-channel clothing retailer Blair Corporation had an aging customer base with average consumers in the over-60 range. Seeking a younger clientele, the company created a new brand, Crossing Pointe. Using IBM's WebSphere Commerce Suite, the company launched crossingpointe.com, a Web site that allows consumers to create an online fashion model. This virtual look-alike can "try on" apparel items in an effort to make the online shopping experience less risky and more fun.

6. Plan. American Eagle Outfitters is using multiple solutions from JDA for merchandising. For merchandise planning, the JDA system helps the retailer plan by class or store, and enables the company to budget the merchandise mix for maximum ROI. Both bottom-up and top-down planning are possible, as well as plan evaluation and modification. In addition, the JDA software helps ensure accurate merchandise distribution, according to current trends, merchandise plans and store characteristics. And an analysis application provides enterprisewide support for planning decisions.

7. Stay In Step with What's Available. Shoe retailer Stride Rite Corp. has consolidated and streamlined its product information catalogues with trading partners. The company uses QRS Exchange and QRS Catalogue to help stores stay in step with what products are available at any time. Data synchronization and standardization ensure the right item is ordered at the expected price and quantity. "With QRS we have reduced order errors and cycle times, which translates to reduced costs and better service," says Yusef Akyuz, chief information officer, Stride Rite.

8. Combine Channels. Federated's Gift Registry Alliance bridal registry includes The Bon Marché, Burdines, Goldsmith's, Lazarus, Macy's and Rich Stores. All Alliance stores are integrated with WeddingChannel.com, a comprehensive wedding resource. To provide in-store access to WeddingChannel.com, Federated has deployed NCR Web kiosks. Guests who visit a Federated Gift Registry Alliance store — where they can see, touch, and compare potential gifts — can use the kiosks to view or print the couple's registered choices. They can then purchase an item in-store or online.

9. Go Scientific. Instead of following gut instincts, Saks Fifth Avenue merchants have gone scientific. The company uses technology to discount at different times in different places. Instead of discounting too early, so items sell out, or too late, so a store is overstocked with unwanted items, Saks uses a system from Spotlight Solutions that analyzes sales data from past years and from the current selling season, then makes specific markdowns for specific stores. "We've seen very positive results," says Bill Franks, chief information officer, Saks Fifth Avenue.

10. Label Shelves Effectively. Clear and effective shelf labeling provides substantial benefits, especially in the grocery industry. Safeway UK recently implemented one of the retail industry's first retail revenue management and electronic shelf label project using KhiMetrics' retail revenue management application suite and NCR RealPrice electronic shelf labels. Safeway UK increased merchandising effectiveness in just two months. The initial launch generated sales increases of nearly three percent and profit increases of more than five percent. Meanwhile, in the U.S., Shaw's Supermarkets and 7-Eleven Inc. have also implemented NCR RealPrice electronic shelf labels. Both companies expect the technology to help stores enhance customer service while better managing expenses and implementing more profitable pricing strategies.

11. Use Your Database Effectively. Upscale home furnishings retailer Domain Home Fashions houses info about its 165,000 repeat customers in a robust database that uses technology from GERS. The database facilitates analysis of consumer behavior and configuration of marketing campaigns. An overall integration of GERS with all Domain systems, including the Web site, enables Domain "to serve the customer and provide valuable information about such things as order status and delivery schedules," says Laura Katz, vice president of merchandising and marketing, Domain Home Fashions.

12. "Jack Be Nimble, Jack Be Quick." To build and maintain sales, Marks & Spencer, the U.K.-based grocery chain, must be nimble and quick enough to plan and make 6,500 set changes every week, while controlling the accompanying costs for labor and logistics. To cope with these challenges, as well as problems associated with store-specific assortments and space plans, the company has selected a solution from Marketmax that automates the planning process and generates customized weekly shelf-set plans. The solution is also helping Marks & Spencer decrease cycle times and increase sales.

13. Know Your Customer Demand. When Casual Male had trouble selling a style of winter coats, corporate planners marked it down in stores across 44 states. But the coat might have been zooming off the shelves in chilly Minnesota, where the markdown was costly and unnecessary. Now the clothing chain is using software from ProfitLogic to analyze customer-buying patterns in three different climate zones. After assessing demand, the solution determines when and where to launch discounts and how much items should be marked down.

14. Look to the Future. Lunds Grocery Stores unveiled what the retailer calls the "Store of the Future," a concept that employs NCR Web kiosks, NCR self-checkout units, and NCR point-of-sale solutions to deliver "the ultimate form of customer service." The NCR technology complements Lunds' existing customer services, which include carryout service, a soup and sandwich bar and an onsite chef giving food demonstrations. Now, with the NCR solutions, customers scan purchases, search kiosks for recipes and order deli items without waiting in long lines.

15. Be Intelligent. Business intelligence is critical to retailer success. In turn, Ace Hardware has combined access to consumer transaction information with the ability to turn information into action. Using MicroStrategy, Ace deployed numerous business intelligence applications, including marketing analysis, customer loyalty, retail pricing, category management, merchandising, inventory and wholesale pricing. In addition, Ace uses Informatica to integrate critical POS data with its wholesale and inventory systems for strategic analysis by sales, marketing and pricing managers. The result is better business decisions, improved merchandising and category management, lower inventory costs and optimized pricing.

16. Be Trendy. Hot Topic is a mall-based retailer specializing in apparel, accessories, gifts and music for teenagers. Its merchandise reflects a variety of music-related lifestyles, including hip-hop, retro, punk and Goth. To stay trendy, Hot Topic relies on the Style Analysis features built into GERS Retail Systems' merchandising solution, Enterprise1. With this solution, the retailer taps into merchandising data to scrutinize sales trends. This helps maximize selling opportunities by enabling the company to provide the latest fashions to image-conscious customers.

17. Go Wireless. A worldwide fashion leader, the Armani Group operates twenty-eight Giorgio Armani boutiques in the U.S. Wireless and other solutions from Retek enhance operations through real-time information flow between stores and headquarters and by supporting store-level activities such as receiving, stock adjustments, transfers, returns to vendors, ticketing and stock look-ups. "With this information, we have been able to reduce inventory, improve labor management, and most importantly, improve customer service," says Stephen Culver, chief information officer, Giorgio Armani, U.S.

18. Provide Simplicity and Convenience. The deployment of nearly 3,000 Web-based NCR kiosks in Wal-Mart allow customers to create bridal, baby, or birthday registries by scanning desirable items. "The simplicity and convenience of this customer service technology will offer our wonderful Wal-Mart customers additional shopping choices and help further support our philosophy of providing exceptional customer service at everyday low prices," says Kevin Turner, senior vice president, Wal-Mart.

19. Run Away from Spreadsheet Planning! Sports manufacturing company Adidas operates 47 retail stores in North America. By 2000, Adidas had outgrown its ability to develop chain and store plans on spreadsheets, and it was running in the direction of change. It needed an automated planning system that would ensure optimal allocations at each store and coordinated planning across the chain. Adidas implemented Connected Retailer Merchandise Planning from STS, an NSB company. "The system has improved our ability to flow product in and peak it before key selling times," says Matt Arnis, manager of planning, Adidas.

20. Tune Up For Expansion. A leading retailer of guitars, amplifiers, drums, keyboards and pro audio equipment, Guitar Center delivers for customers and shareholders. In 2001, the company reported a 19 percent increase in net sales and a 21 percent increase in market share. To maintain this level of performance, the company turned to JDA for merchandise management assistance. When its newest warehouse opened last year, the retailer found harmony as it successfully combined JDA's merchandise planning solutions with its warehouse management software from Manhattan Associates.

21. Automate Procurement. With six million daily customers and ten thousand suppliers, 7-Eleven Inc. is the nation's largest convenience store chain. The retailer embarked on a program to streamline its procurement processes and other interactions with suppliers, and passed operations savings on to customers. Using solutions from Oracle, 7-Eleven will minimize paperwork and manual errors, while improving supplier relationships. The Oracle system enables rapid and accurate replenishment at the best possible price. All 7-Eleven suppliers will ultimately utilize the system.

22. Close the Loop. Apparel retailer Casual Corner has created a centralized solution for merchandising by combining JDA's host merchandise management system with a Retail IDEAS data warehouse system for closed-loop decision support. The retailer also uses JDA's E3TRIM to feed enterprise-wide warehouse-level replenishment data into the JDA merchandise management system. "Today we have a strong foundation with JDA that enables us to deliver quality service to our customers," says Stefano Gaggion, vice president of MIS.

23. Keep Your Margins Solid. In conjunction with JDA, Wilsons Leather implemented one of the apparel retail industry's first packaged, client-server merchandising systems. The JDA system is helping the retailer efficiently manage operations, and in August, 2002, Wilsons announced positive store sales and solid merchandise margins. Other benefits include faster replenishment and improved fact-based decision making. Says John Kondratuk, Wilsons' managing director, business systems, "We've got the best merchandising system on the market."

24. Know Your Customer. REI (Recreational Equipment Inc.) is using a solution from Oracle to power its Web site, rei.com, which receives more than 2.5 million hits daily and represents 70 percent of the retailer's total direct sales revenue. In addition to saving downtime, the Oracle system provides data warehousing capabilities that allow REI to analyze customer patterns for improved purchasing decisions, as well as for better sales and marketing efforts. Oracle also helps integrate REI's multiple channels, managing mail orders, in-store special orders, gift registries and kiosk operations.

25. Integrate. Integrate. Integrate. To leverage customer buying habits, strengthen relationships and increase sales, 1-800-FLOWERS turned to Informatica for help in integrating and analyzing data from a variety of systems, including ERP, e-business and legacy systems. The florist also integrated its CRM data, which originates from retail storefront, online, telephone and catalog sources, and uses a CRM application from Oracle. By analyzing the data from diverse sources, 1-800-FLOWERS carefully tracks supply and demand to enhance merchandise decision-making and expedition of orders.