This in my Editorial from the November issue of Internet Retailing Magazine. Also available as 'digital print' via the November digital edition.
Searchandising (ugh) and merchandising relate to retailers' promotion of sales of products to customers. Ian Jindal wonders whether we oughtn't also consider how the relationship between our customers and our suppliers might be improved, and ponders whether the English language can survive the word "Purchandising"...
Merchandising - the art of promoting goods for sale by their presentation in retail outlets - spawned the non-word "Searchandising": promotion of products on-site by means of search tools, faceted navigation and browse, increasing the relevance of products shown to customers.
Relevant, coherent product presentation increases the likelihood of a sale, may not increase overall profits. We may sell more of our great products and somewhat more of our (now well-presented) mediocre products, but we may not sell the 'dogs' or purchasing mistakes, destined for land-fill or recycling.
Searchandising attempts to square a resolutely-round circle - the tension between extending product ranges (category authority, dominant range, long-tail SEO) and the desire to minimise ranges (to conserve cash, increase the yield on stock). Despite the science, however, there's a sneaking feeling that there's something fundamentally flawed in a retailing approach that is so focused on persuasion and manipulation to push sales. Indeed, promotionally-led retailing could be seen as the practice of selling the unnecessary and unwanted to the unwilling. Could we not find approaches that increase the 'inherent desirability' or relevance of products?
"Purchandising" would be the practice of improving the specification and procurement of products and services so that they better match the needs, desires, interests and aspirations of customers (thereby reducing the marketing and promotional demands to convert customers' interest into cash). This is different to 'normal procurement' since it would be based upon insight to customers' behaviour, a high level of collaboration and ultimately co-creation. Let's consider each in turn.
Customer insight blends qualitative and quantitive data on preferences and choices to inform buyers as to the products to buy. Null on-site search results (ie where a customer searches for products on your site that you don't stock) is an indicator of unfulfilled interest or demand, for example, while "On Site Not Seen" metrics (products stocked but never viewed by customers) might indicate stock ready for liquidation. Equally, verbatim comments in user reviews will help improve the quality of products stocked.
So far, though, so normal. This is simply improving the standard procurement cycle.
In our feature on NakedWines later in this issue we have an example of collaboration between the business, the customers and the suppliers to create new products of increased relevance to the customers. NakedWines introduce new wines to their knowledgeable and enthusiastic Wine 'Angels', while those angels in turn support those winemakers identified as prospects by the company. It's open, radical and interesting: but there is a further possible step: co-creation.
Consider that a product is specified in isolation, produced in bulk, promoted 'at' people to persuade them that they wanted it in the first place, and a numbers game ensues in which we hope to pulp a sufficiently small percentage to remain in business. Far better, then, would be to co-develop products with customers, and release a better-rounded 'version 3' product at scale. As retail outlets become 'experience stores' to understand and interact with a brand's products for later purchase, we'll see manufacturers sharing prototypes with customers. Phone manufacturers may hand out maquettes and prototypes for feedback in store, and designers assess short runs prior to fuller production. This approach is already visible at http://www.sample-central.com/ (formerly SampleLab) where customers get to try products, take them home and assess them - in return for surveys and insights that improve the products for a mass market. The founders coined the term "Tryvertisting" - trying and experiencing and precursors to great products, rather than advertising post-manufacture to make up for deficiencies...
Whether we're able to make the move immediately from procurement to co-creation or not, surely it's time for professionals in buying in the digital age to come to the fore and engage fully with customers to increase relevance, coherence and profit? Developing our tools, KPIs and approaches to seek customer input, create products alongside them which will satisfy need (at least) and delight (at best) must be the aim. This would be the art of "Purchandising" - a full partner with the digital marketing, social media and searchandising skills of our colleagues. While our new word may assault our ears, it may also release some ideas and action - to the benefit of customers and our profitability alike.
Are you about to change your business card to "Purchandiser"? Have you thoughts on the tools and KPIs to use? Do you disagree? Have your say via [email protected] or in the comments on this page.