Four strategies for a better retail holiday season

Following one of the worst holiday sales seasons in history, retailers recognize the need to prepare for the upcoming season with carefully planned merchandise assortments, inventory levels and cross-channel promotions that drive sales. While some economic reports have shown bleak outlooks, several indicators suggest the economy is beginning to improve. With so much uncertainty, how will retailers prepare?

Retailers may not have control over how much the economy will bounce back, but they do have control over the successful execution of their holiday in-store product marketing campaigns and promotions. In the world of retail, execution is the most important component to any successful merchandising campaign. Unfortunately, it's also one of the most disorganized and difficult processes to go through.

With 85 percent of purchasing decisions being made at the shelf, the optimization of merchandising and promotional strategies is absolutely critical. However, only 37 percent of retail merchandisers are confident in the ability of store operations to execute these strategies.

Without the proper processes in place, retailers lack the ability to run holiday campaigns quickly and efficiently, and consequently, fail to convert the sale during the critical final interaction with the customer. In fact, tens of millions of dollars are lost each year because employees don't properly execute on their headquarters' in-store directives.

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So what's a retailer to do?

In order to help retailers cut costs associated with holiday marketing and merchandising campaigns while significantly improving customer engagements that ultimately drive sales, we've included below some key tricks of the trade.

Streamline your Operations: A critical first step in carrying out any in-store merchandising campaign is to streamline operations and create a single platform to manage all merchandising processes. Companies like Oracle, JDA, SAP and RBM Technologies have paved the way in providing comprehensive and highly-effective merchandising platforms specifically designed to improve in-store merchandising and marketing execution. By simply streamlining operations, retailers are able to significantly cut costs and improve revenue.

Improve your Communications Skills: Timely communication related to training, in-store execution, and promotions are critical to the success of any retail operation.  And in this challenging market where every sale counts, it's critical that all stores be compliant with corporate direction. 

Unfortunately, studies show that most retailers are still using outdated processes — like excel spreadsheets, phone, fax and mailings — to communicate in-store merchandising changes. This is a major driver of non-compliance, which negatively impacts sales performance. Retailers should focus on visual, two-way communication with store employees. This means giving store teams images of how they want displays to appear and where they should be placed within the store. Store employees can in turn provide faster feedback when a campaign has been executed so corporate has a clear understanding of compliance and the impact an accurately executed campaign has on sales.

Prepare to 'Get Local': A few months ago, Macy's CEO Terry Lundgren told the attendees of Macy's annual meeting that their localization plan, which the company implemented last year, will save the company approximately $400 million annually beginning in 2010.

Many other large retailers have jumped on the localization bandwagon for quite a few reasons. Local stores are able to provide insight into a particular market to improve campaigns and sales in those particular areas. Localization efforts will be particularly critical this holiday season because they show how customers are responding to a particular campaign or promotion.

Despite the growth of this trend, localization can be a complicated process. To maximize revenue for each customer that enters a store, retailers must display the exact products and messaging that will compel a purchase. That means tailoring merchandise to unique local consumer needs. Many savvy retailers understand this, but too often leave such localization decisions solely up to the "gut-feel" of local store managers. While these managers do play an important role in the process, retailers must better leverage the data they already have by automating the localization process. The result will be a stronger, more targeted connection with the customer.

Improve your Organization's Sustainability Efforts: It's not only good for the environment; it's good for your bottom line. While almost every retailer offers recyclable bags or employs energy saving practices in their stores, they often forget to focus on greening their back end as well. In-store campaigns can be a tremendous source of inefficiency and waste. In many cases, retail corporate headquarters don't have a clear idea of what is happening at each store level in terms of POP requirements. Many retailers are still using generic POP kits for all of their stores, which can lead to as much as 30 percent of received POP not being used. Not only does this process waste time and effort from both a store and corporate level, it also increases campaign costs and produces a great deal of waste.

Visual merchandising management solutions provide the necessary tools to help retailers create a localized POP platform to help take the "guess work" out of the merchandising process and reduce production of POP materials. In addition, retailers are able to significantly reduce paper waste and money, by ensuring all corporate directives and campaigns are being communicated online.

The impending holidays will undoubtedly be a major challenge for all retailers. In order to survive and even thrive, retailers need to be smart, organized and cost-conscious. Implementing the right in-store merchandising technologies and processes will undoubtedly help retailers achieve these goals and prepare not only for the coming months, but for many holiday seasons to come.

The writer is Chief Customer Officer at RBM Technologies.

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