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Modern Merchandising – Evolution from the Endless Aisle to Right Aisle

Modern Merchandising – Evolution from the Endless Aisle to Right Aisle

During Shoptalk Vegas 2024, Tony Spring, who had recently become the CEO of Macy’s Inc., stated, “It’s not the endless aisle but the best aisle that matters.” This sentiment was echoed by other top leaders at the event. Decision fatigue has set in and consumers have newfound meaning in life post-pandemic. They are now very carefully weighing purchase decisions, favoring more relevant options vs. a near-infinite and overwhelming selection of stuff.

This shift in consumer preferences creates growth opportunities but requires more focus on edited assortments.

Today, data-driven tools play a bigger role in helping brands and retailers to meet customer demands. Spring’s keynote covered a range of insights and provides a reference point for the current and future state of retail, essential for anyone seeking to improve their connection with consumers anywhere.

1. Understanding the Modern Shopper

Part of Spring’s approach to reviving the Macy’s brand focuses on efforts to modernize customer experiences both in-store and online. Despite the rise of online shopping, physical stores still represent 72% of US retail sales each year according to Forrester. “I love stores; I believe in stores. They just have to be the right stores,” said Spring.

Although Macy’s plans to close 150 stores by 2027, Spring clarified that this is a strategic decision to focus on their “Go Forward” locations – stores with the best sales and smallest footprints – and open dozens of new small-format locations. Today’s consumers are seeking unique experiences, convenience and personalization, prioritizing quality over quantity. To meet these demands, retailers must move away from the “endless aisle” model and adopt a more curated approach that tailors product selections to customers’ needs and preferences.

2. The Rise of 'The Best Aisle'

It’s not just locations that need to be examined and reimagined. Spring emphasized the importance of data-driven, customer-centric product selection to meet customer needs and trends, using a holistic “full category” approach.

Retailers need to enhance their collaboration with vendor partners, especially when it comes to retail technology, which will provide the necessary data to optimize the shopping experience and make decisions that create such a ‘best aisle.’ Spring highlighted that brands and retailers must drill down on the nuances of each collection to ensure that each category resonates with their customers.

3. Unleashing the Power of Data

The initial world of e-commerce unburdened brands of the physical restraints of stores, allowing for endless collections. Several decades later, consumers are suffering from countless options and decision fatigue, growing weary of such endless options, they don’t care to sift through tens of thousands of SKUs to find one item.

At the same time, retailers now have unprecedented data tools at their disposal, allowing them to shape better strategies for everything from product ideation and development to retail planning, assortment allocation and assortment optimization.

Next-gen technology such as AI-powered analytics, predictive modelling and greater customer segmentation, allows brands and retailers to analyze vast amounts of data, understand consumer preferences and tailor assortments to meet specific needs. The editing down and fine-tuning Spring describes would not be possible without such highly accurate and timely tech.

4. Strategies for Achieving the Right Aisle

Spring emphasized that retail strategy is shifting to focus more on a curated assortment with fewer products that are more aligned with the retail or brand’s values. Customer attention is difficult to maintain, particularly in today’s crowded social media environment.

Endless products can repel customers, causing them to feel overwhelmed and inconvenienced. To achieve the ‘Best Aisle’ which Spring cited, brands and retailers must first adopt a ‘Right Aisle’ strategy. This involves a data-driven approach to SKUs, applying product rationalization to select the items that click with customers and forgo the rest. Generally speaking, 80% of a company’s revenue comes from 20% of its products.

The ‘Best Aisle’ approach is achieved through a ‘Right Aisle’ strategy, the ‘right products’ build such a collection. A ‘Right Aisle’ approach prioritizes assortment optimization through the use of visual boards, market intelligence, assortment planning, price optimization and inventory optimization.

Centric Software is the industry leader in providing best-of-breed solutions that allow for the creation of curated collections, infused with high-quality data. These solutions enable teams to make better, faster decisions and ensure that the right products are in the right place at the right time.

5. Strengthening Vendor Partnerships

Such fine-tuning is now required to ensure curation is done correctly, with complete historical data and accurate forecasting. Brands and retailers must lean more heavily on vendors to optimize product assortments effectively. This means adopting modern technologies that have the bandwidth and intelligence to take on large swaths of data and distil it down into usable, actionable points.

Leveraging AI-powered data-driven insights is no longer a “nice to have;” it’s essential in the new retail environment. It allows companies to refine product offerings, enhance visibility of available stock and drive sales.

6. Crafting the Ultimate Shopping Experience

Today’s customers want a more simplified and modern shopping experience across all channels. For Spring that means making changes from deploying better search tools online to improving assortments rather than expanding them and creating more personalized product recommendations.

Spring encourages leaders to utilize new tools to effectively respond to customers’ ever-changing interests. To create this ‘Right Aisle,’ brands and retailers will need to further leverage data-driven insights to curate assortments that delight customers.

Today’s customers want a seamless integration of online and offline channels, allowing them to access curated selections across various touchpoints. “The last component of a bold new chapter strategy is not as glamorous,” said Spring, “but it is critical to simplifying and modernizing our intended operations.” He went on to cite inventory management and cloud-based technology as essential components in helping to serve the customer better.

“We are focused on making sure we’re allocating inventory more effectively to each channel,” continues Spring.

We know we have to get allocation by channel right, and we are confident we can…These changes will save us hundreds of millions of dollars and simplify the experience for our consumers.”

Creating Your Best Aisle with the Right Aisle Strategy

The leap from the traditional ‘endless aisle’ to the data-driven approach of ‘The Best Aisle’ strategy requires adapting to changing consumer preferences and leveraging technology to deliver personalized, curated shopping experiences. Only by embracing a data-driven ‘right aisle’ approach strengthened by partnerships with the right vendors can retailers stay ahead in an exceedingly competitive landscape.

Centric Software helps you create your ‘Best Aisle’ with the ‘Right Aisle’ strategy, empowering teams to choose the right product at the right place, at the right time. As the market leader, Centric Software equips brands and retailers with data-driven insights, AI capabilities, and ML technology so that they can capture far greater quantities of information and easily access it for on-target decision-making.