Let’s get personal

June 17, 2014By Behind the Shelf Blog, Future of Retail

By Dave Wendland

Make no mistake: homogenized retailing is no longer relevant. Today’s shoppers demand a personalized experience that puts their needs, interests, and desires at the center.

But what about supply chain logistics? Well, if you take a page out of the country’s largest retailer who in March opened their first convenience store format, then just-in-time inventory management may be necessary. Their goal is to satisfy shoppers who seek a very fast in-and-out experience featuring key best-selling items within a core set of categories. But to stock the store shelves, they will be pulling from the behemoth operation sharing their parking lot. That’s right. This c-store format was built in Bentonville, Arkansas in the shadows of its big brother operation, a Supercenter. So, as consumers shop the limited assortment aisles of the c-store and begin to deplete its inventory, the goal is to pull inventory back into the smaller format from the Supercenter.

For other retail operators that may not have the bandwidth of a Wal-mart or the real estate that would permit a smaller, customized store to be built immediately adjacent, I believe the orchestration of the supply chain will require a fine-tuning. Manufacturers and distributors will need closer collaboration with their retail partners and will need to share in the vision of just-in-time, and just-right assortments. If this occurs and it makes up for the benefits of scale realized by sometimes too large, gluttonous inventories, the supply chain will hum right along to an entirely new rhythm.the supply chain will hum right along

Won’t store operations be a nightmare? Yes – and no. Yes, because a one-size-fits-all planogram will no longer suffice. On the other hand, the localization of the store and the assortment that meets the specifics of the demography it services will be managed by locally-informed management. Sure there will still be need for a general framework to set the right flow for the category, but it will not be uncommon to see more localized products on the shelf that better serve the neighborhood. A gentleman on a recent flight shared his story of a grocery store in a highly-Hispanic area that not only has a more diverse product assortment than the big box around the corner, but he also noticed that the product labels facing the shoppers were all turned to the Spanish-language display panel. Smart retailing that helps this store remain relevant to its local shoppers.

How soon is this coming? The digital world and e-commerce are already well out of the gates on personalized shopping experiences. Brick and mortar is lagging behind, but I foresee personalized shopping experiences emerging at a rapid pace before the end of this decade.

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