According to the Center for Immigration Studies, by 2023, 1 in every 7 Americans will be foreign born. Retailers are faced with the stiff challenge of attracting customers in a market made up of many diverse cultures. Are they offering the right product mix? What type of products succeed more in certain submarkets? Having the right combination of merchandising and marketing can help companies continue to generate revenues by selling products in line with the needs of a growing diverse customer base.
Elevating diversity fosters two different related effects. Consumers drive the demands for different products in different ways between various demographic groups- effectively creating trends. In order to respond appropriately to consumer preferences, businesses track these consumption trends, and tailor their product marketing mixes to various submarkets accordingly. Through integrating with an ERP system, businesses are more equipped to hold up their side of that relationship, ideally bringing themselves closer to their consumers. It can help a business carry, and facilitate multiple brand lines nationwide, all geared at occupying a slightly different niche.
Consumer data collection is imperative for today’s multi-channel retailer. Decision makers’ must be able to keep up with how end-users are responding to their products. This feedback is sometimes the hardest to attain, but often most crucial. Businesses are spending big money in purchasing data outside of their organization in order to get a better picture of preferences and demographics of customers. There is a larger emphasis on technology spending for retailers for ERP systems and software solutions to help ease the process in producing the most accurate and relevant information. With an ERP system managers can now slice and dice data to get a better understanding of which customers are purchasing what types of products. By understanding the sales volume, managers can make informed decisions based on the data that is input and stored on an ERP system.
Merchandising in its simplest form is understanding the market and targeting customers with the right product, with a good price point, at the right place, in the right time. Retailers trust that the merchandising department will make the correct decisions on purchases. Understanding the preferences and needs of the customers can help purchasing departments make informed decisions on whether or not to purchase inventory. In order to minimize the risk of buying too much stock or the wrong products, companies are using their ERP systems to require approvals of orders cut to vendors. Employees, managers, and department heads can view data related to the sales and purchase data of similar type items within an ERP system. This provides insight as well as a level of security for merchandisers to make sure that they are making the correct decisions for purchases.
The data from outside resources can be used in conjunction with data within an ERP system, which can help companies from making mistakes of purchasing inventory that will not sell. Having this knowledge allows companies to correctly allocate their stock amongst their locations with the correct mix of all their different product lines. As described earlier, diversity of ethnic groups is increasing in the US. By understanding the sales and purchase history and demographics of the customers, companies can make correct merchandising decisions based on a better understanding the groups’ preferences. Contact HSO today to learn more.