24 Questions Every Retailer Should Be Able to Answer

Listed below are questions around inventory, returns, marketing and warehousing that every retailer should be asking to succeed in 2017. With DynamicAction retail analytics, your team will be able to answer questions like these, as well as understand the interconnection of each data point and decision.

Critical questions every retailer must ask

Inventory – Views Alignment

Aligning inventory to web product views is akin to an online planogram. In stores, items in the shop windows will typically sell well, and putting sold out or low inventory products in the window is clearly a poor strategy. On the web, we have the luxury of measuring what customers view and what customers abandon (put back on the shelf). These questions represent a new way of working that successful web merchandisers must adopt.

1. Which products should be exposed/marketed together to capitalize on lift?

2. How much inventory is not getting viewed on the website?

3. Which products are receiving too many or too few views, given their inventory levels, conversion, profitability, review ratings, time on site and fragmentation?

4. For which product categories are we under or over-optioned, given viewing demand?

5. What percentage of our product views land on in-stock, non-fragmented items?

6. What technology am I using to make programmatic changes to inventory processes?


Returns have a sobering impact on retail profitability. They can be fueled by misbehaving customers who take advantage of a customer-first return policy and factors under the company’s control such as poor product descriptions, unorganized marketing programs and disconnected order fulfillment. However, those losses ($642.6 billion annually worldwide) can be rectified and recouped by pinpointing the weaknesses at various levels of the enterprise.

7. What are the most efficient actions we can take to reduce returns?

8. What percentage of customers return 100% of what they purchase (e.g. “free rentals”)?

9. What percentage of customers frequently return the majority of any order containing substitutable items (e.g. “home dressing room”)?

10. What percentage of High Value/Most Profitable customers return products with a return rationale under our control (e.g. damaged, differs from web description, wrong item)?

Marketing Spend

In 2017, digital ad spending will surpass TV ad spending for the first time. More importantly, unlike TV advertising, an enterprise’s digital advertising program is exceedingly trackable. Organizations have the ability to know precisely how every digital marketing dollar translates into revenue and profit – or doesn’t. It’s time for retailers to go beyond return on ad spend and begin to understand marketing results in terms of stock alignment and profitability.

11. How much money are we spending on marketing campaigns that send customers to products that are sold out or highly fragmented?

12. For which products should we curtail marketing spend because we will sell through the item without the paid exposure?

13. Which marketing initiatives are the most profitable, once you consider all costs including returns?

14. How is my technology working to optimize marketing campaigns efficiently?

Warehouse Operations

When retailers make better decisions about how to promise and fulfill customer orders, the result is improved customer satisfaction. Retailers have an opportunity to focus on their most profitable customers and ensure they receive a VIP experience. Further, they can place emphasis on exceptional service for new customers and execution that turns one-time buyers into loyal repeat purchasers.

15. What percentage of orders from High Value/Most Profitable customers get shipped within 24 hours? What percentage are delivered after their delivery promise date?

16. Are we decreasing our average days to ship for new customer orders?

17. For which stores and/or warehouses have we over or under-allocated for our most profitable products?


When an item isn’t selling well, oftentimes retailers are quick to execute a profit-eating price markdown. Fortunately, timely data is now available to point to potentially less expensive corrective measures that will still allow retailers to make plan.

18. Given inventory levels, conversion, profitability, review ratings, time on site, fragmentation, and competition, for which items do we need to consider a price reduction?

19. For which overstocked products is an increase in exposure a more profitable action than a price reduction?

20. Which products require a pricing reduction due to lower competitive prices?

21. How is my technology working to make pricing changes efficiently?


What if you could create a merchandising strategy specifically geared towards cultivating a customer base that in aggregate was more profitable than last year’s customer base? Year after year, certain products and collections are responsible for attracting, keeping and re-acquiring customers that are profitable. Executives need to be able to identify these goldmines—even in omnichannel organizations—point the merchandising teams in their direction, and let them go to work.

22. Which first-purchase brands lead to High Value/High Lifetime Profit customers?

23. Which campaigns and promotions perform the best at luring back previously High Value Lapsed customers?

24. How is my technology enabling my organization to create optimized customer experiences that precisely marry customers with products that generate maximum revenue and profit?

Next Step: Finding Answers
DynamicAction puts connected datainstant insights and prescribed action plans at the fingertips of retailers so they can answer critical questions and take immediate, fact-based actions that directly impact profit growth. Retail teams know exactly where to focus, what to do and how much financial impact to expect. Consider it a retailer’s treasure map.
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