Perspectives

Evolving the merchandising function in today’s battle for share

What got you here won’t get you there

Our experience with the vast majority of the world’s largest retailers suggests that the industry’s core function–merchandising–is where the heavy lifting will take place as traditional retailers attempt to recast their value propositions to compete in a very different retail ecosystem.

The technologies that are changing the retail world are there for everyone to see. There’s no escaping the tactical transformations: Consumers increasingly use digital means to research, shop, and transact, while retailers use the same advances to connect, assort, and deliver. But is there more going on than just the march of technological progress?

Deloitte spent six months interviewing a broad collection of retail executives, industry analysts, and leading industry thinkers–collecting over 1,200 inputs–to understand their views on the changing business landscape.

This study expands on three key implications of recent technological advancement that retailers need to understand in their fight to sustain market share in an increasingly volatile environment:

  1. Reduced barriers to entry
  2. Decoupling of assortment from inventory
  3. Reduced cost to buy

It also challenges retailers to rethink the merchandising operating model along its three core dimensions:

  1. Assortment–What do I choose to sell?
  2. Placement–Where do I choose to “show” and “own” it?
  3. Fulfillment–How do I choose to fulfill the demand?
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