The fundamental process by which many companies approach their merchandising and distribution model is flawed.
This greatly constricts profits and new opportunities, simply because they fail to approach this area of their businesses utilising holistic data-driven strategies.
Jay Goltz once very poignantly said, “Opportunity doesn’t knock, it lurks.”
While I believe there is a tremendous amount of truth to this statement, I’m not one to rely on opinion, but rather prefer the validation hard evidence brings.
In today’s digital age, there is an abundance of data lurking all around us and for all of the reporting companies turn out on a daily, weekly, monthly, and yearly basis; most are not conducting the comprehensive analysis needed to uncover tremendous opportunities resting right under their noses that would greatly improve existing processes.
Consider the classic inventory and product distribution model.
Common Approach: Your Company does research to identify which products are predicted to be popular/which will sell. These products are then sourced and ordered. Your company even leverages technology to know exactly when a specific product moves/sells within your stores or online and product stock is replenished based upon this information.
Flaw: The problems with this model begin with the predicting part. While products hypothesized to sell are ordered, there is no real-time insight and flexibility in the model to account for the ever-changing wants and behaviours of consumers. Secondly, this approach is limited in that it only provides insight into what customers purchased, but lacks two very important data points:
* what did they actually want to purchase (but might not have be able to because you don’t stock that product) and
* why they didn’t make a purchase. Collectively, these flaws in the existing system represent a tremendous “missed opportunity.”
Solution: Leverage data from your search campaigns to uncover what people want and the current “demand” for any given product or service. What keywords are being utilized? What messaging are they responding to? What keyword searches are on the rise (read as increase in demand) and conversely, which are on the decline (read as decrease in demand)?
This can be monitored globally, domestically or even down to a micro-market level. If you don’t have a search campaign, start one and in the interim, use Google Trends and Google Insights for Search. By understanding and acting upon the real-time ebbs and flows of demand for any given product or service, you can create a dynamic merchandising and distribution plan to capitalise on revenue opportunities and improve your customers’ experiences.
This post originally appeared at AskSmarterQuestions.com.
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