The Critical Questions Every Team Must Ask to Excel in Modern Retail

The Critical Questions Every Team Must Ask to Excel in Modern Retail

Current conversations regarding retail typically include buzzwords such as omnichannel retailing, unified commerce and e-commerce. While these words may be the flashiest new topics to hit the headlines, they all point to a movement we have seen take place over the past decade: the unification of physical and digital retailing. It is imperative to look within your organization and ensure your teams are armed and ready to deliver a personalized and interactive shopping experience.

As merchandisers, you function in one of the most critical areas of the organization.  The product aesthetics and (most importantly) availability are crucial in connecting with the consumer, making plan and fostering a lifetime customer. Here are the critical questions broken into six categories by which every merchandising team must ask in order to continue success in this new age of retail:


With the convergence of physical and digital stores, retailers now have the ability to take data from their online site and properly assess consumer habits.  What products are they viewing and are they putting back on the “shelf” or finalizing a purchase?  We refer to this concept as web merchandising. With this model in mind, it is important to ask your team the following questions when building out your strategy:

  • How much inventory do we have of products not yet published on the website/ how much inventory has been unpublished for more than a week or a month?
  • How much inventory is not getting viewed on the website?
  • Which products are receiving too many or too few views given their inventory levels, conversion, profitability, review ratings, time on site and fragmentation?
  • Which product categories are we under or over-optioned given viewing demand?
  • What percentage of our product views land on in-stock, non-fragmented items?


Returns annually account for a whopping $642.6 billion in losses.  Of course, there are elements out of retailers’ control (such as rogue customers). However, there are many factors that merchandisers are able to review, such as poor product descriptions or disconnected order fulfillment that could play a large role contributing to increased returns. Questions they should be asking include:

  • What percentage of customers’ returns are 100% of their purchase (e.g. “free rentals”)?
  • What percentage of customers frequently return the majority of any order containing substitutable items?
  • What percentage of High Value/Most Profitable customers return products with a return rationale under our control?

Marketing Spend

With digital ad spending currently in the race to beat out TV advertising, a retailer’s digital advertising activity is now more identifiable than ever before. When analyzing marketing spend, it is important to ask:

  • How much money are we spending on marketing campaigns sending customers to products that are sold out or highly fragmented
  • For which products should we curtail marketing spend because we will sell-through the item without the paid exposure?
  • Which are the most profitable marketing initiatives?

Warehouse Operations

Warehouse operations are a critical component of delivering an excellent customer experience by effectively fulfilling orders.  In order to take warehouse operations to the next level, merchandisers must consider:

  • What percentage of orders from High Value/Most Profitable customers gets shipped within 24 hours? What percentages are delivered after their delivery promise date?
  • Are we decreasing our average days to ship new orders?
  • In which stores and/or warehouses have we over or under-allocated our profitable products?


Demand and pricing are the tracks connecting the retail train on the path to profit. However, retailers’ pricing strategy needs to be fully baked with the pricing data analysis months ahead of time, as well as an ability to nimbly shift based on if your are meeting plan. It is important to ask:

  • Given inventory levels, conversion, profitability, review ratings, time on site, fragmentation and competition, which items should we consider to have a price reduction?
  • Which overstocked products require increased exposure rather than a price reduction (a much more profitable solution)?


Customers are the gold mines of retailing. By analyzing customer data and product trends, merchandisers are able to build a customer base that increases profitability year-over-year. Here is what to look for:

  • Which first purchase brands lead to High Value/High Lifetime Profit customers?
  • Which campaigns and promotions perform the best at luring back previously High Value Lapsed customers?

How could you, amidst so many questions, fueled through so many areas of your organization, have access to the answers and effectively act upon them? As a Merchandiser, you should have access to actionable insights and deliver actions that are brought to you via real-time, organization-wide connected data.  Through properly analyzing these six key areas you and your team will be empowered with the questions and (even better) the answers to efficiently and effectively meet the increasing demands of the retail industry with an error-proofed strategy.

This blog is an excerpt from DynamicAction’s new Merchandising Manual 2016, “The New Reality of Retail: How Top Merchants Will Thrive in 2016.”