Category: Retail Experts

In today’s dynamic retail landscape, both omnichannel and multichannel strategies are frequently used to reach customers. However, despite their growing popularity, confusion often surrounds the subtle but crucial differences between these two approaches. This article aims to demystify these concepts, exploring their core principles and their impact on key aspects of retail operations – assortment, promotion, supplier relationships, and vendor management. 

Multichannel vs. Omnichannel: A World of Difference 

At their core, both multichannel and omnichannel strategies involve engaging with customers across multiple channels. However, the key distinction lies in the level of integration between these channels. 

• Multichannel Retailing: Here, retailers utilize various channels – physical stores, online platforms, social media – to reach customers. However, these channels operate somewhat independently. Promotions might differ between online and offline stores, and customer data may not be entirely integrated across platforms. While offering customers more options to interact, the overall experience can be disjointed. 
• Omnichannel Retailing: This approach takes a more holistic view, aiming to provide a seamless and unified customer experience across all channels. Data flows freely between platforms, allowing for a consistent brand message and personalized interactions. Customers can seamlessly switch between channels, with their purchase history and preferences readily accessible. 

Consequences for Retail Operations 

The choice between a multichannel and an omnichannel approach has significant consequences for various aspects of retail operations. Let’s delve deeper into four key areas: 

1. Assortment: 

• Multichannel: Inventory management becomes more complex. Retailers might need to maintain separate inventories for online and offline stores, potentially leading to stockouts or overstocking in specific channels. 
• Omnichannel: Inventory management becomes centralized. A single pool of inventory allows for real-time stock visibility across channels, optimizing stock levels and minimizing stockouts. Customers can easily check online if an item is available in-store and vice versa. This can also enable retailers to offer a wider overall assortment by strategically allocating inventory based on demand in each channel. 

Example: A sporting goods retailer with a multichannel approach may have different baseball bat selections online and in-store. An omnichannel retailer, however, can offer the complete assortment online, with the option for in-store pickup or even fulfillment from the closest store if online stock is unavailable. 

2. Promotion: 

• Multichannel: Promotions may vary between channels due to the lack of integrated data. This can create confusion for customers and limit the effectiveness of marketing campaigns. 
• Omnichannel: Promotions become more targeted and consistent across channels. Customer data is used to personalize offers and ensure a consistent brand message. Omnichannel promotions can also leverage the unique strengths of each channel, such as offering in-store coupons for online purchases or vice versa. 

Example: A clothing retailer with a multichannel strategy might run a sale on dresses online, while offering a discount on jeans in-store. An omnichannel approach allows for a coordinated sale across all channels, perhaps with a discount on the entire clothing line and additional incentives for buying online and picking up in-store. 

3. Supplier Relationships: 

• Multichannel: Relationships with suppliers may be siloed depending on which channels they supply. Retailers might need to negotiate separate terms and pricing with suppliers for online and offline channels. 

• Omnichannel: Supplier relationships become more collaborative. Retailers can leverage their omnichannel data to gain insights into customer demand and buying patterns, which they can then share with suppliers for better production planning and forecasting. This fosters stronger, more data-driven partnerships. 

Example: A furniture retailer with a multichannel approach might have separate agreements with suppliers for online and in-store furniture. An omnichannel retailer can share combined sales data with furniture suppliers, allowing them to optimize production based on overall demand and avoid situations where one channel is overstocked while the other faces shortages. 

4. Vendor Management: 

• Multichannel: Managing vendors selling through different channels can be cumbersome. Retailers may struggle to maintain consistent product information, pricing, and promotions across various vendor platforms. 
• Omnichannel: Vendor management becomes more streamlined. Standardized processes and data integration across channels simplify vendor onboarding, product listing, and promotion management. This approach also allows for better performance tracking and improved collaboration with vendors. 

Example: An electronics retailer with a multichannel strategy might have separate logins and processes for managing vendors selling online and in-store. An omnichannel retailer can develop a single vendor portal with access to product information, inventory levels, and sales data across all channels. This improves efficiency and allows vendors to contribute to a more consistent customer experience. 

Marketplaces: Just a Starting point 

A retailer that uses marketplaces like Lazada or Robinhood falls into the multichannel category, not omnichannel. Here’s why: 

• Marketplaces operate independently: While a retailer gains access to a wider customer base through marketplaces, these platforms function as separate channels. Inventory management, promotions, and customer data typically remain siloed within the marketplace ecosystem. 
• Limited Integration: There’s minimal (if any) integration between the retailer’s own website or physical stores and the marketplace platform. A customer’s purchase journey on a marketplace might not seamlessly connect with the retailer’s loyalty program or other offerings on their own channels. 

However, a retailer using marketplaces can take steps to bridge the gap and move towards a more omnichannel approach: 

• Data Sharing: Negotiating data sharing agreements with marketplaces can provide valuable customer insights that can be used for targeted promotions and personalized marketing across all channels. 
• Consistent Branding: Maintaining consistent brand messaging and visuals across the marketplace platform and the retailer’s own channels creates a more unified customer experience. 
• Omnichannel Fulfillment: Offering omnichannel fulfillment options like buy-online-pickup-in-store (BOPIS) or ship-from-store can leverage the physical stores as fulfillment centers, enhancing convenience for customers regardless of where they initiate the purchase. 

By implementing these strategies, a retailer using marketplaces can move closer to an omnichannel approach, even though the core functionality of the marketplace remains independent. 

How rocky is the road to omnichannel retailing? 

Let’s be clear: there’s no minimum size threshold to justify becoming an omnichannel retailer. Even smaller retailers can benefit from implementing basic omnichannel practices like offering a user-friendly mobile app or click-and-collect options. 

However, the return on investment (ROI) from omnichannel strategies often increases with scale. Here’s why: 

• Cost Efficiency: Omnichannel retailers can leverage centralized inventory management, data-driven promotions, and streamlined fulfillment to optimize operations and reduce costs. 

• Customer Acquisition and Retention: A seamless omnichannel experience fosters customer loyalty and satisfaction, leading to increased customer lifetime value. 
• Competitive Advantage: In today’s competitive retail landscape, omnichannel capabilities are becoming an expectation, not a luxury. Retailers that embrace omnichannel strategies are better positioned to attract and retain customers. 

So, while the road to omnichannel can be long, the potential benefits are significant, making it a worthwhile pursuit for retailers of all sizes. The key is to start with a clear strategy, prioritize achievable goals, and adapt the approach based on the specific needs and resources of the business. 

About Hypertrade 

With 30 years of retail expertise, Hypertrade supports retail players in implementing multi-channel and omnichannel retail solutions & methodologies across the entire value chain, with data science and collaboration. 

Retail Practice	CPG Practice	Digital Commerce Practice
Philippe Roque Katie Trinh  Peerapol Prakaisak	Mathew Cheung Annika Davidas Chorthip Patanawongyuneyong Shwe Yee In	Lucas Pradella

I. Identify and Analyze Current Workflows

1. Map existing workflows: Document all steps involved in creating and launching promotions, including design, copywriting, approval processes, content creation, asset management, and publishing. Product Selection, mechanics and price, regional specificities are of course a must. This workflow mapping must also describe how information currently flows between Merchandising and Marketing Teams.
2. Identify bottlenecks and inefficiencies: Analyze each step for delays, manual tasks, communication gaps, and errors.
3. Quantify the impact: Estimate the time and resources spent on manual tasks and delays across the workflow. Also estimate the cost of errors generated during manual processes (wrong price, product description error, wrong mechanics, wrong picture)

II. Evaluate Automation Opportunities

1. Define automation goals: Determine which tasks or steps would benefit most from automation, considering cost, resource savings, and accuracy improvement.
2. Research automation tools: Explore platform options that integrate with your existing systems and handle tasks like image/video editing, content publishing, email marketing, and approval workflows. Lago, from Comosoft, is definitely the world leader.
3. Consider scalability and flexibility: Choose tools that can adapt to changing promotion types, channels, and future growth.

III. Implement and Integrate Automation

1. Prioritize high-impact tasks: Start by automating the most time-consuming, repetitive, or error-prone steps.
2. Develop clear automation rules and guidelines: Ensure consistency and accuracy in automated tasks.
3. Integrate with existing systems: Connect automation tools to your content management system, marketing automation platform, and other relevant software.
4. Pilot and test thoroughly: Begin with small-scale pilots before full-scale deployment to identify and address any issues.

IV. Monitor & Optimize

1. Track performance metrics: Measure the impact of automation on speed, accuracy, resource allocation, and other key metrics. Ariane and Ulys Customer Intelligence SaaS Software, that can be seamlessly connected to your POS and ERPs, are among the best promotion analytics software.
2. Gather feedback from stakeholders: Get input from users on the effectiveness and usability of automated workflows.
3. Refine and iterate: Continuously improve automation based on data and feedback.

Additional Tips

• Invest in training and support: Ensure team members are comfortable using new automation tools and understand their limitations.
• Balance automation with human oversight: Automate repetitive tasks, but retain human judgment for strategic decisions and creative work.
• Communicate changes effectively: Inform stakeholders about upcoming automation and its potential impact.
• Start small and scale gradually: Implement automation in phases to manage complexity and minimize disruption.

V. Data Management:

• Identify required data sources: Determine the data needed for each automated step, like product information, promotion details, and customer segments.
• Standardize data formats: Ensure consistency across different data sources to facilitate seamless integration with automation tools.
• Implement data quality checks: Establish data cleaning and validation processes to guarantee accuracy in automated operations.
• Develop data governance policies: Define rules and procedures for data access, security, and privacy.

VII. Implementation and Maintenance

• Develop data pipelines: Set up automated processes to transfer data to and from your automation tools.
• Configure workflows: Define triggers, actions, and rules for each automated step in your chosen software.
• Test and refine: Conduct thorough testing and refine configurations to ensure smooth operation and desired outcomes.
• Monitor and maintain: Track system performance, address errors, and update software regularly.

Additional Resources

Step By Step Promotion Planning

Promotion Intensity

Share Of Voice

Promotion Basket Wallet Share

Video series: How to improve your Promotion Effectiveness

In our previous piece, we explored the fascinating concept of category roles – how they shape the narrative of your store, both online and offline. We saw how assigning roles like “Destination”, “Traffic Driver”, or “Convenience” helps you curate a compelling customer experience. But the story doesn’t end there. It’s only the blank canvas. Now, let’s delve into the vital world of category tactics: the vibrant brushstrokes that bring that canvas to life.

Just like a storyboard guides a film, category tactics breathe life into your category roles. Each element of the retail mix – assortment, price, promotion, and space – becomes an actor with a carefully crafted script. These scripts, in the form of decisions and actions, determine how each category interacts with shoppers, fulfilling its intended role within the broader narrative.

From Sketch to Masterpiece: Unveiling the Power of Category Roles

Imagine stepping into your store, not just as a shopper, but as a captivated audience member. The products sing, the layout guides, and every element seems to tell a story. This is the magic of category roles: defining specific identities for each product category, like “Destination”, “Traffic Driver”, or “Convenience”, to shape an engaging, purposeful narrative.

Think of a bustling bakery as a “Destination” category. The aroma of fresh bread is the opening act, enticing customers deeper into the fragrant, oven-lit stage. Every shelf overflows with artisanal delights, tempting them to linger and explore. This curated variety, coupled with personalized recommendations and enticing displays, transforms the bakery into a must-visit experience, not just a place to pick up some bread.

Now, contrast this with a “Convenience” category, like grab-and-go snacks near the checkout. Here, conciseness is key. Streamlined shelves, strategically placed near impulse buys, and clear, no-fuss pricing guide customers to a quick decision. It’s not about lingering, but about seamlessly integrating into the broader purchase journey.

Business Case: Category roles are far more than aesthetic labels. They deliver tangible results:

• Increased customer engagement: A well-defined narrative keeps shoppers moving through the store, exploring and discovering new products.
• Boosted profitability: By aligning roles with customer needs, you maximize category efficiency and drive sales. A “Destination” bakery might entice additional purchases with complementary coffee and spreads, while a “Convenience” snack section optimizes checkout flow and impulse buys.
• Enhanced brand differentiation: Category roles help your store stand out from the competition by creating a unique and memorable experience.

The Scriptwriters: Decoding the Language of Assortment, Price, Promotion, and Space

Just like a film relies on a meticulously crafted script, category tactics orchestrate a captivating experience for your shoppers. Each element of the retail mix – assortment, price, promotion, and space – transforms into an actor with a precise script. Decisions about these elements become the lines they deliver, each carefully chosen to resonate with the category’s assigned role.

Assortment: Imagine a “Destination” wine section. Instead of generic bottles, it’s filled with curated selections based on region, occasion, or even food pairings. This deliberate variety becomes dialogue, sparking customer interest and inviting exploration. In contrast, a “Convenience” section for laundry detergent might have a limited, yet strategically chosen range, focusing on popular brands and clear size/price variations, like actors delivering short, informative lines to guide a quick decision.

Price: Price becomes the tone of voice, shaping perception and influencing behavior. A “Destination” category might leverage strategic price points to denote quality and exclusivity, while a “Convenience” category would focus on competitive pricing and clear value communication, and a “Traffic” might want to simplify shoppers’ choice by having a limited number of price points.

Promotion: Promotions become plot twists, injecting excitement and urgency. Targeted discounts or bundled offers in a “Destination” category can draw attention and encourage exploration, while limited-time deals in a “Convenience” section might drive impulse purchases.

Space: Shelf placement becomes stage direction, guiding customer attention and influencing behavior. A “Destination” category might be given prime real estate, bathed in spotlights and adorned with eye-catching displays, while a “Convenience” category might be strategically positioned near high-traffic areas for easy access.

Business Case: Mastering the language of the retail mix allows you to:

• Optimize inventory: By aligning assortment with customer needs, you reduce dead stock and maximize sales potential.
• Drive category profitability: Pricing and promotions become targeted tools to boost margins and attract desired customer segments.
• Enhance customer experience: Strategic space allocation improves navigation, simplifies decision-making, and encourages exploration.

Bridging the Performance Gap: The Unsung Hero of Category Tactics

Every great story needs a conflict, and in the world of retail, that conflict manifests as the category role gap. A deep dive into a category’s performance unveils the discrepancies between its aspirations and reality. Imagine a “Destination” clothing section with empty racks and uninspiring displays – a script falling flat due to missing actors. Or a “Convenience” section overloaded with confusing options, overwhelming the audience with unnecessary dialogue.

The gap assessment is the detective uncovering these plot holes. It analyzes sales data, customer feedback, and competitor practices to identify areas where the script needs reworking. Are shelves bare when they should be bursting with variety? Are prices misaligned with the desired value perception? Does the placement fail to entice exploration? Addressing these gaps is the key to rewriting the category’s story for success.

Business Case: Data analyses will lead you to:

• Increased Sales and Profitability: By identifying and addressing discrepancies between the desired category role and its actual performance, you can optimize inventory, pricing, and promotions, leading to improved sales and higher category profitability.
• Enhanced Customer Experience: Addressing gaps in assortment, value perception, and product presentation ensures that the category delivers on its promised role, whether it’s providing exciting variety, convenient options, or a destination experience. This translates to a more satisfying and engaging customer journey, boosting loyalty and repeat visits.
• Reduced Operational Costs: Identifying and eliminating inefficiencies and inconsistencies in category management, such as dead stock or misalignment with customer needs, leads to streamlined processes and optimized resource allocation, resulting in cost savings across the operation.
• Data-Driven Decision Making: The gap assessment provides valuable data and insights into customer preferences, category performance, and market trends. This data empowers you to make informed decisions about assortment, pricing, promotions, and space allocation, leading to more effective category strategies.
• Competitive Advantage: By actively managing and optimizing your category roles, you can differentiate yourself from the competition by offering a unique and compelling shopping experience tailored to specific customer needs. This can attract new customers and retain existing ones, giving you a competitive edge.

From Vision to Execution: The Granular Power of the Category Activity Plan

A masterfully scripted play thrives on a well-structured act structure. Just like that, category tactics flourish through the category activity plan: the granular roadmap that translates yearly visions into quarterly chapters and meticulous monthly scenes. This blueprint ensures every interaction, from a strategic end-of-season sale to a personalized product recommendation, reinforces the category’s role within the grand narrative.

Imagine a “Destination” furniture section. The yearly vision might be to establish it as the go-to place for premium home furnishings. The quarterly chapter could focus on launching curated collections for different room styles. Then, the monthly scene might involve a promotional event for one specific collection, complete with targeted marketing campaigns and in-store displays. This granular planning guarantees consistent messaging and cohesive execution, leaving no room for plot inconsistencies.

Business Case: The category activity plan delivers:

• Improved operational efficiency: By breaking down goals into smaller, actionable steps, you streamline internal processes and resource allocation.
• Enhanced agility: The plan allows for flexible adjustments based on market trends and customer feedback, ensuring your narrative remains relevant and engaging.
• Data-driven decision-making: Regular monitoring and analysis of each stage in the plan provide valuable insights to optimize future strategies.

Collaboration Takes Center Stage: Bringing Internal Teams and Suppliers into the Spotlight  

But no actor shines alone. The magic of category tactics unfolds through seamless collaboration. Assigning defined objectives to each retail mix element – a targeted price drop igniting a sense of urgency, a strategically curated display sparking discovery – provides clear direction for internal teams. Supply chain, marketing, and operations become the supporting cast, their alignment, support, and feedback forming the bedrock of successful execution.

Picture a “Convenience” snack section. While the category manager and buyer define the assortment, the marketing team creates eye-catching displays and signage. Supply chain ensures timely product availability, and the operations team coordinates checkout flow for seamless purchases. This orchestrated performance ensures the “Convenience” narrative resonates with every customer touchpoint.

Business Case: Collaborative category tactics bring:

• Synergy and shared ownership: When teams work together towards a common goal, motivation and engagement soar, leading to more innovative solutions.
• Improved communication and alignment: Regular collaboration breaks down silos between departments, fostering a unified approach to category management.
• Leveraged expertise: Each team brings their unique skills and knowledge to the table, maximizing the effectiveness of category tactics.

Beyond the Curtain: Embracing Transparency and Unleashing the Power of Supplier Partnerships

But the stage extends beyond the four walls of your retail space. Suppliers are crucial characters in this dynamic play. By sharing not just sales figures but the invaluable insights gleaned from the gap assessment, you empower them to become strategic partners. This transparency, embodied in the Supplier Business Review, invites their expertise and resources to the table, boosting the overall performance of your category story.

Think of a “Destination” wine category. Sharing data on customer preferences and sales trends with your winemakers can inspire them to develop new varietals or curate special blends tailored to your audience. This collaborative approach elevates the category experience, offering unique products and exceeding customer expectations.

Business Case: Supplier partnerships unlock:

• Enhanced product assortment and innovation: Suppliers can tailor their offerings to your specific needs and customer preferences, leading to a more relevant and exciting variety.
• Improved supply chain efficiency: Transparent data sharing fosters better inventory management and reduces stockouts, ensuring a smoother customer experience.
• Cost optimization: Collaborative planning can lead to mutually beneficial agreements with suppliers, optimizing pricing and promotions.

Remember, category tactics are a journey, not a destination. Embrace the iterative process, refine your scripts, and celebrate the collaboration. As your teams and suppliers become immersed in the narrative, you’ll see your category roles come alive, enchanting your customers and propelling your business forward. So, take a bold step, pick up your brush, and paint your retail masterpiece with the vibrant strokes of category tactics. The spotlight awaits!

Related Resources

Category Management Setup: a Step-By-Step Guide for retail players of all sizes

How to Analyze a Category Performance

4 Tech Innovations for saving worked hours and win your Shoppers’ heart

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From Hypertrade Retail Knowledge Base

Category Role

Category Strategy

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Imagine walking down a retail aisle. Each neatly arranged category whispers a story, vying for your attention and influencing your buying decisions. The vibrant produce screams freshness and health, while the sleek gadget section murmurs promises of innovation and convenience. These whispers? They’re category roles, the silent narratives retailers craft to shape your experience and drive brand success.

But defining a category’s role is more than just slapping a label on it. It’s about understanding its true potential and harnessing its narrative power to achieve specific goals. This article unlocks the secrets of using category roles as your strategic compass, guiding you on a journey to retail triumph.

Why Category Roles Matter: Aligning Narrative with Reality

Forget generic product collections. Category roles breathe life into aisles, transforming them into chapters of a captivating brand story. They become anchors for your overall positioning, attracting the right customers and differentiating you from the pack. A well-defined role can revitalize a stagnant category, turning it from a sales laggard into a profit engine. Imagine a grocery store recasting its frozen food section as a culinary adventure hub, featuring exotic ingredients and recipe inspiration. Suddenly, frozen veggies aren’t just dinner shortcuts, they’re passports to global flavors.

But before building captivating narratives, it’s crucial to understand the current reality. Metrics like sales contribution, margin rates, and shelf share tell the true story of your categories. Are they living up to their intended roles? Are gaps undermining their narrative potential? Analyzing these gaps becomes your roadmap to success.

Closing the Gap: Unmasking the Retail Mix Mysteries

Each element of the “retail mix” – product, price, place (that include space), and promotion – plays a part in your category’s narrative. Is your assortment diverse and relevant to shopper needs, or riddled with redundancies? Are prices aligned with your desired positioning, or unintentionally deterring customers? Is your shelf space optimized to tell your story and drive attention? Do promotions enhance brand perception or simply erode margins?

Identifying these gaps is like uncovering plot holes in a story. It reveals where your narrative needs tightening and refinement. Address the product gap by curating an assortment that resonates with your chosen role. Consider private label options, exclusive offerings, or innovative products to elevate your narrative’s impact. Optimize pricing strategies to attract target customers, maintain profitability, and enhance value perception. Remember, price is not just a number, it’s a whispered promise to your shoppers.

Setting the Climax: Defining Objectives for Impactful Narratives

With the gaps identified, it’s time to set the stage for your category’s success. What are your desired objectives? Do you want to boost sales volume and market share? Drive brand loyalty and engagement? Enhance profitability and margins? Defining clear objectives becomes your story’s climax, the point where your category narrative reaches its peak impact.

Advanced story tellers will also include measurable objectives related to  

Shopper insights: penetration, basket size, basket value or basket composition.

Range Effectiveness: share of sales, share of Assortment, share of space and share of margin.

Promotion Dynamics: share of sales, share of voice, share of basket.

Ecommerce story tellers will also incorporate the KPI that are specific to their channel.

Building Your Action Plan: Strategies to Make Your Narrative Sing

Now, translate your objectives into a comprehensive category strategy. This action plan should address each element of the retail mix, breathing life into your narrative:

• Product: Craft an assortment that aligns with your desired role and shopper needs. Think innovation, exclusive offerings, and strategic partnerships.
• Price: Design pricing strategies that resonate with your target audience, maintain profitability, and tell the right story about your brand’s value.
• Place: Strategically allocate shelf space to showcase your narrative, guide shopper journeys, and encourage cross-merchandising opportunities.
• Promotion: Design targeted promotions that drive desired behavior, create buzz, and avoid eroding margins. Remember, promotions are the exciting plot twists that keep your shoppers engaged.

A Dynamic Story: Measuring, Adapting, and Evolving

Your category strategy isn’t a static script, it’s a living, evolving narrative. Continuously monitor performance, assess the impact of your actions, and be prepared to adapt. Gather shopper feedback, track metrics, and analyze how your story resonates with your audience. Remember, the best retailers are agile storytellers, constantly honing their craft and responding to the ever-changing retail landscape.

Unleashing the Power of Narrative

By harnessing the power of category roles, you transform your retail aisles or web pages into captivating chapters of a brand story. You attract the right customers, differentiate yourself from the competition, and drive impactful results. So, unlock the hidden narratives within your categories, craft compelling narratives, and watch your retail story unfold into a masterpiece of success.

Discover our Retail Merchandising Platform

Related Resources

Category Management Setup: a Step-By-Step Guide for retail players of all sizes

How to Analyze a Category Performance

4 Tech Innovations for saving worked hours and win your Shoppers’ heart

Optimize Your Brand’s Range

Manufacturers often miss growth opportunities with their retailer through this one factor:

Their Brand’s Range.
Shelf space has always been considered a key driver of sales and brand awareness – at least against competing brands.

However,…

With major Shopper behavior changes during the last 12 months, the importance of space productivity has been increasing drastically.

Retailers are reacting and adapting their own range quickly, based on shoppers’ spending changes.

So here is the dilemma:

Shall a Brand maintain a long assortment tail with high risk of decreasing my brand’s effectiveness and finally seeing my low selling SKUs – and space – cut by the retailer?
or
be proactive in cutting low selling SKUs to provide more space to my better selling SKUs?
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Consider the cost of maintaining low selling SKUs on a shelf: Delivery, Returns, Activation costs…

On the other hand, being proactive on my Brand’s Range delivers huge benefits:
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• Additional space justified by additional sales
• Increased availability
• More flexibility to launch and try new items‍

On Hypertrade Data Collaboration Platform, we use 2 simple metrics that must be checked monthly.

1. The average number of SKU sold by day by branch of the category [sub-category] of the retailer (A) and the same for the Brand (B).

2. A comparison between the Brand’s share of SKU (A) and its share of sales (B).

In both cases, when (A) > (B) it is usually a sign that range optimisation or activation is required. What decision will you take?

RETAIL SHORTS

Retail shorts is a series of practical practice sharing Hypertrades could learn, capture, implement and monitor across the diversity of our Clients.
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‍We hope it helps!

Hypertrade is a Retail Data Collaboration Platform that provides tech, data and continuous retail expert support to turn your teams into Champions.

The Paradigm Shift:

Microservices Architecture and the Rise of B2B Software Marketplaces – How can it

make Retail Players life easier?

There is no perfect software solution. There will always be one or several missing functionalities or features. Because of costs, data governance, internal tech strategies or required training, changing a tech solution is always

a pain in the neck. This challenge often results in frustrations: an incomplete tech solution with part of the job being done manually – or not done at all.

In the ever-evolving landscape of technology, paradigms often shift to accommodate new and innovative solutions. One such paradigm shift is being catalyzed by the development of microservices architecture and its influence on the way companies utilize professional software. Companies are now able to keep their existing solutions and use, when required, on-demand functionalities: micro services. These micro services are increasingly present and marketed through B2B software market places, a more flexible and dynamic. This article explores how the emergence of microservices architecture is reshaping the software industry, leading companies to increasingly adopt software-as-a-service (SaaS) solutions from B2B marketplaces, and the implications of this shift.

Microservices Architecture: Breaking Down the Monolith

Historically, software development followed a monolithic architecture, where applications were built as large, tightly integrated systems. This approach had its merits but also came with challenges like rigid scaling, difficulty in updates, and limited flexibility. The introduction of microservices architecture marked a transformative departure from this tradition. Microservices involve decomposing applications into smaller, loosely coupled components, each responsible for specific tasks or services. These microservices can be developed, deployed, and scaled independently, allowing for greater agility, faster updates, and enhanced fault tolerance.

The Shift Towards B2B Software Marketplaces

As microservices architecture gained prominence, a natural synergy emerged with the concept of B2B software marketplaces. These marketplaces act as intermediaries, connecting businesses seeking specific functionalities with providers who offer microservices catering to those needs. Instead of investing in developing or procuring comprehensive software suites, companies can now access individual microservices that align with their precise requirements. This trend is akin to renting software capabilities, enabling businesses to focus resources on core competencies while utilizing specialized services from the marketplace.

Benefits of B2B Software Marketplaces

1. Flexibility and Customization

B2B software marketplaces empower companies to craft tailored software ecosystems by selecting and integrating microservices that precisely match their needs. This flexibility enhances operational

efficiency and prevents the bloat often associated with monolithic software packages.

2. Time and Cost Efficiency

Traditional software development or procurement processes are time-consuming and resource intensive. B2B marketplaces expedite this process by offering pre-built microservices, significantly reducing development and deployment timelines and associated costs.

3. Scalability

Microservices architecture inherently supports scalability. When companies harness microservices from a marketplace, they can scale specific components of their applications based on demand, optimizing resource utilization.

4. Innovation Acceleration

B2B software marketplaces house a wide array of specialized microservices, encouraging businesses to experiment with cutting-edge technologies without committing to a full-scale software overhaul.

5. Maintenance and Update

Microservices can be updated individually, ensuring that the entire system doesn’t need to be taken offline for maintenance. This allows businesses to benefit from the latest features and security patches seamlessly.

6. Reduced Vendor Lock-In

The modular nature of microservices reduces dependency on single vendors. Businesses can switch between providers for different microservices without overhauling their entire software infrastructure.

Challenges and Considerations

While the marriage of microservices and B2B software marketplaces offers a promising alternative to traditional software acquisition, certain challenges must be addressed:

1. Integration Complexity

Integrating disparate microservices from various providers can be complex, requiring robust API management and middleware solutions.

2. Data Security and Privacy

The distributed nature of microservices demands meticulous attention to data security and privacy, with potential vulnerabilities at inter-service communication points.

3. Quality Assurance

The reliability and compatibility of microservices from different vendors must be thoroughly vetted to prevent potential operational disruptions.

4.Vendor Selection

Choosing reputable and reliable providers from the marketplace is crucial. An unreliable microservice could have cascading effects on the entire application.

5. Regulatory Compliance

Different microservices might have varying levels of compliance with industry regulations, necessitating careful evaluation and mitigation strategies.

Future Implications

The convergence of microservices architecture and B2B software marketplaces is poised to reshape the software industry in several ways:

1. Democratizing Technology

Small and medium-sized enterprises can access sophisticated software functionalities without the prohibitive costs of traditional development or procurement.

2. Evolving Developer Roles

Developers will increasingly become orchestrators, selecting, integrating, and managing microservices to create cohesive applications rather than building everything from scratch.

3. Shift in Business Models

Software providers are likely to pivot towards offering specialized microservices to cater to the demand from B2B marketplaces, fostering innovation and competition.

4. Redefining Vendor-Customer Relationships

The customer-vendor dynamic will evolve into more of a partnership, as businesses collaborate with microservice providers to address unique challenges.

5. Hybrid Approaches

As companies transition to microservices, hybrid models combining legacy systems and microservices will emerge, allowing gradual migration and risk mitigation.

The dawn of microservices architecture and the subsequent rise of B2B software marketplaces mark a profound transformation in how businesses access and utilize professional software. This shift empowers companies with flexibility, cost-effectiveness, and innovation while redefining their relationship with software providers. While challenges persist, the potential benefits of this paradigm shift are undeniable. As companies embrace the modularity of microservices and the convenience of B2B marketplaces, the software landscape is set to evolve into a more agile, customizable, and collaborative domain.

Hypertrade Micro-Services for Retail Player

Hypertrade offers a continuously growing choice of micro-services, enabling retail players to use only the functionality they need without having to change their complete system. Each of these micro-services are powered by automated data ingestion and machine learning engines:

• Assortment Optimization & Rationalization
• Sales Forecasting
• New Products Sales Forecasting
• Customers Segmentation
• Targeted Campaigns Management

About the writer

Frederic Etienbled is the founder and CEO of Hypertrade, a Retail Solution Platform with complete

retail suite and micro services, Driven by Retail Expertise, Data Science & Collaboration.

Data Collaboration is a term used when a retailer exchanges its data (most often POS, sometimes Loyalty and Web) with a vendor against financial retribution. It is now an established practice. Beyond additional income, are you maximizing its ROI through noticeable increased sales growth? If not, the good news is you are on an untapped resource! In this article, we explain the essential steps a retailer can take to ensure Data Collaboration’s main benefit is Sales Growth, far ahead of additional income.

Data Collaboration Pitfalls

The lack of alignment on data-driven decisions between retailers and manufacturers remains data collaboration’s main challenge today.

It is unfortunately the most common pitfall. Despite both parties having access to a single source of truth –retailer’s POS and CRM data – one party, or the other, does not use them to collaboratively decide what is best for the Category and the Brands.

Business continues as usual, failing to capture the amazing growth and profitability opportunities data collaboration has to offer on each sales driver:

• Range & Assortment optimization
• Distribution improvement
• Promotion effectiveness
• Space optimization

It’s important to look at the current challenges that create that pitfall and limit data collaboration projects to a “Data vs. Cash” transaction.

Current Challenges

2 main challenges are at the origin of the Data Collaboration pitfalls:

• Organization (Data Empowerment)

• Capabilities (People Empowerment)

It is worth having a look at each of them.

Data Empowerment: Unleash the Courage to Supercharge Your Organization

Control Driven organizations will always find it difficult to trust data as they imply an important mindset shift and decision-making processes. Retailers face an ongoing challenge in optimizing their data management processes. Ideally, data should be used to measure each step of the Customer Journey, providing specific analyses, alerts, and recommendations to inform managers and guide their actions. These data-driven decisions typically revolve around four key pillars of retail operations: assortment, price, promotion, and distribution. To ensure effective collaboration, retailers need to clearly communicate these decisions and the criteria to their vendors. However, in reality, many decisions get diluted in control-driven processes, hindering the organization’s ability to make increasingly data-driven choices.

People Empowerment: They Can Do Better Than What You Think

Lack of capabilities is often the scapegoat of many digitalization projects’ failures. However, necessity is the mother of all progress and innovation. People’s ability to adapt and learn when they have clarity in the objectives and what is in for them is often under estimated. In emerging countries where we operate, we’ve observed a strong desire for learning among the teams we work with, spanning from Africa to South-East Asia. However, the existing state of status quo within organizations often hinders their progress. To address this, it’s crucial for organizations to institutionalize the practice of making key decisions exclusively based on data. By embracing data empowerment, teams can unlock opportunities to enhance their capabilities in these areas.

Getting Data Collaboration Right in 5 Steps

For any retailer that wants to generate sales growth in addition to additional income through Data Collaboration, 5 key simple steps are required.

1. Establish an Internal Data & KPI Taxonomy

• What do we want to count?
• Why do we want to count it?
• What decisions can we take with them?

The online free Retail Knowledge base HPT Pedia can be a good starting point.

2. Define clear objectives of your Data Collaboration with vendors

In practice, the objectives you want to establish with vendors that will join your data collaboration program should be aligned with these established in the yearly Trade terms agreements. In case these yearly Trade Term Agreements do not exist yet, it is a good opportunity to set them up.

3. Define & Plan the Key Processes you want the Teams to use internally to make their decisions

From our experience, it is essential to go progressively. We recommend the following steps.

4. For each process, define the KPI for your decisions

Internally as well as with vendors, transparency on the criteria of decisions will guarantee trust,quality of the decisions taken and speed in their execution. These criteria belong to the taxonomy initially defined. Below are some practical examples:

5. Data-Driven Decisions must become Part of Vendors Meeting’s Agenda

For Data Collaboration to become the common language between retailers and vendors, the processes you selected must become an essential and recurring part of every vendor meeting. Vendors must have access to the same data as the retailer, the same KPI and the same analyses so they have all the insights on hand to prepare an effective meeting and come up with informed proposals. To ensure both Teams do not spend time creating these reports and analyses, it is best to select a Retail Data Collaboration Platform that:

• can automate these analyses.
• is updated regularly and automatically.
• can offer your vendors to see their performances in both your merchandise hierarchy and their own segmentation.

Data is becoming an unavoidable tool in all businesses, a combustible that fuels more and more business decisions. At the same time, because of rising complexities in most industries, collaboration is also becoming a necessity. Data collaboration is a priority as it enables organizations to gain comprehensive insights, uncover hidden patterns, and make informed decisions. By combining and sharing data resources, collaboration fosters innovation, accelerates problem-solving, and drives collective growth.

About Ariane

Ariane is a Category Management solution, published by Hypertrade, available as a Platform or as a Plug-in in existing solutions such as Power BI. Developed by retailers for retail players, it integrates hundreds of retail-expert algorithms. Ariane is currently used by tens of companies in Southeast Asia, Middle East, and Africa.

Unlocking Retail Supplier Potential and Retailer Success through Data Freedom

In today’s data-driven world, information has become a valuable asset for businesses across various industries. In the retail sector, retailers amass vast amounts of data, including sales figures, customer behavior, and market trends, to optimize operations and drive growth. However, a common practice among retailers is to restrict suppliers from utilizing this shared data on platforms other than their own. This practice of data captivity hampers suppliers’ ability to aggregate data and gain a global vision of the market. In this article, we will delve into the issue of data captivity, explore its detrimental effects on suppliers, and emphasize the need for data freedom to empower both suppliers and retailers for collective success.

Data Captivity: The Retail Supplier’s Challenge

Within the retail ecosystem, many retailers collect substantial volumes of data that encompass sales figures, customer preferences, and market trends. While some retailers are willing to share this data with suppliers, they often impose restrictions that prevent suppliers from utilizing the data beyond the boundaries of their platform. While large international suppliers can develop internal tool to migrate all their retailers ‘data in their own architecture – when data can be accessed as files – this data captivity confines smaller suppliers to a limited perspective, preventing them from aggregating data from multiple sources and gaining a comprehensive understanding of the market.

The Impact of Data Captivity on Suppliers:

Restricted Market Insights: Data captivity restricts suppliers’ access to comprehensive market insights. When confined to using data solely from one retailer’s platform, suppliers miss out on broader market trends, customer preferences across different retail outlets, and regional variations that could inform their decision-making process. Consequently, suppliers struggle to identify growth opportunities, adapt their product offerings, and optimize their market strategies.

Hindered Innovation Potential: Data captivity inhibits innovation by limiting suppliers’ ability to leverage aggregated data. When suppliers are unable to analyze data from multiple retailers, they face challenges in identifying emerging trends, customer demands, and gaps in the market. As a result, their innovation potential remains restricted, stifling creativity and inhibiting the development of new and improved products and services.

Impeded Collaboration: Data captivity hampers collaboration between suppliers and retailers. When suppliers are unable to aggregate data and gain a comprehensive market perspective, their ability to engage in meaningful discussions and collaborate on product development, pricing, and marketing strategies is compromised. Such limitations impede the potential for mutually beneficial partnerships and hinder collective growth.

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Data Freedom: Unlocking Potential for Suppliers and Retailers

Comprehensive Market Insights: Data freedom allows suppliers to aggregate data from multiple retailers, facilitating a comprehensive understanding of the market. Armed with a global vision, suppliers can identify emerging trends, consumer preferences, and regional variations, enabling them to make informed decisions and tailor their offerings to meet diverse customer needs.

Accelerated Innovation: The freedom to aggregate and analyze data empowers suppliers to drive innovation. By gaining access to a broader range of data, suppliers can uncover valuable insights, patterns, and correlations that were previously inaccessible. This expanded knowledge fuels innovation, enabling suppliers to develop new products, improve existing ones, and respond swiftly to changing market dynamics.

Strengthened Collaboration: Data freedom cultivates a collaborative ecosystem where suppliers and retailers can engage in meaningful partnerships. By sharing data, retailers foster transparency and trust, enabling suppliers to contribute their insights and expertise. This collaboration leads to joint problem-solving, improved decision-making, and mutually beneficial outcomes for both parties.

Enhanced Customer Experience: Data freedom benefits retailers by enabling suppliers to tailor their offerings based on a comprehensive understanding of customer preferences. By leveraging aggregated data, suppliers can develop personalized and targeted strategies, resulting in a superior customer experience. Retailers, in turn, can benefit from increased customer loyalty, higher sales, and improved brand reputation.

Promoting Data Freedom: 3 Strategies for Change

Establish Clear Data Sharing Policies: Retailers and suppliers should agree from the start that suppliers have the ability to access data in any form, granted that this access, by the supplier itself of the 3^rd party assigned to this task, match strict data privacy and security rules.

1. Homologation of Neutral Data Aggregation Platforms: To facilitate data freedom, retailers and suppliers should explore the homologation of neutral data aggregation platforms. These platforms would allow suppliers to aggregate data from multiple retailers in a secure and anonymized manner. By creating a centralized hub where data from various sources can be combined, suppliers can gain a comprehensive view of the market without compromising customer privacy. Retailers can support this initiative by actively participating and contributing to these platforms, recognizing the benefits of data freedom for themselves and their suppliers.
2. Adoption of Open APIs: Retailers can promote data freedom by adopting open Application Programming Interfaces (APIs) that enable seamless integration and data exchange between their systems and homologated Neutral Platforms. Open APIs facilitate the sharing of data in a standardized format, making it easier for suppliers to access relevant information and aggregate data across multiple platforms. By embracing open APIs, retailers empower suppliers to leverage data from various sources, fostering innovation, and enabling suppliers to deliver tailored solutions that meet customer demands effectively.
3. Emphasis on Data Privacy and Security: While promoting data freedom, it is crucial to maintain a strong focus on data privacy and security. Retailers and suppliers must establish robust data governance frameworks that protect both customer information and their own sales data and comply with relevant data protection regulations. This involves implementing appropriate security measures. By prioritizing data privacy and security, retailers build trust with suppliers and customers, fostering a supportive environment for data freedom initiatives.

Hypertrade is a Neutral Data Platform that enables.

• retailers to share their share their sales and shoppers’ data seamlessly with suppliers.
• retail suppliers to aggregate multi-retailers data set to achieve 360 market and shopper insights

‍Promotion plays a vital role in the Retail business due to the high competition among the brands and Retail Stores. While the dramatic cost increases influence the business to spend more time on the promotion evaluation.

In this article, we would like to introduce the method of promotion evaluation to be your choice.

In the Retail Process, the step is started from  

• Retail store drives the commercial offers, and promotion is one of them
• Shoppers’ response to the commercial offers with the traffic and spending
• Then sales are generated  
• If supplier A drives sales higher than the category, then Supplier A gains the market share.

The promotion evaluation will be articulated around this Retail Process.

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1. Financial Results

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This is the main KPI for every business. The measurement could be made for both Promo SKU only and at Brands or Category Level to see the impact of the promotion SKU on the total of my business.

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When we run an analysis, it should be done at the item and brand levels.

Below is the item “Great Value Biscuit Chocolate 90g” promotion result. This item could generate extra sales $5,000 per week with the investment at $1,500 per week. Therefore the ROI in sales is at 2.33 time.  

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The main objective of evaluating this promo SKU is to determine its profitability. We need to check further if this promo item could help generate more traffic and spending for other items.

Below is the result at the brand level for the “Great Value” brand. It shows that the promotion of the item Great Value Biscuit Chocolate 90g helps to increase Great Value sales and bring great results of ROI.

In some cases, we found out that Brands get cannibalism effect, so finally, total brand sales might not increase.  

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2. Competition Result

This measurement is to ensure our performances win over the competition. The evaluation will be at the SKU and Brand level, the same as the financial evaluation.

Why do we need to measure it?

In the Retail Business, it is a ton of seasonality and events. It means you can grow sales significantly without doing any promotions. So we want to ensure the promotion makes us grow higher than the competitors.

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Below performance at the brand level of “Great Value“ can be interpreted as follows.

• Promotion helps brands increase by 1% of market share.
• Great Value shows the effectiveness of the marketing effort compared to the Market Share they get.

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3. Shopper Result

Three levels depend on the data you have and how deeply you want to explore.

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At the Basic Level.,

What can we read?

Understanding the cause of sales increased either from Traffic (Number of Baskets) or Spending (Value per Basket).

It is to measure if the result is achieved as per the target and the mechanic we design.

‍At the Advance Level.,

What can we read?

Penetration increases means this promotion could help us to be more attractive among the shoppers who walk around in the stores. While the Wallet share dropped means this promotion helps us penetrate in the big spending basket.

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At the Professional level,

What can we read?

Penetration increases means this promotion could help us to be more attractive among the shoppers who walkaround in the stores. While the Wallet share dropped means this promotion helps us penetrate in the big

This promotion helps my brands to be in the Brand list of my Shoppers, which means Shoppers buy my brands and still purchase other brands. In terms of brand switching, we lose Shopper to competitors rather than gain from them.

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That help save 100’s of working hours and win Shoppers’ hearts

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Time and automation…the 2 resources that are often lacking in many retail organizations and that prevent teams to do as much as they wished to delight their shoppers. In this paper, we look at 2components of marketers’ jobs: Category Planning and Promotion Planning.IN these components, we are looking at 3 areas where automation helps save literally hundreds of hours: Diagnostics, Score Cards, and History; and what decisions these automated methods help take

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Category Planning

# 1. Automated Category Diagnostics

Take the best decisions to activate your Category on Assortment, Price, Promotion and Distribution in minutes!

A complete category diagnostic usually delivers the causes of the sales variations and what should be done to improve the performance. It should at least cover the performances of assortment, distribution, prices, and promotion impact. Delivering such a diagnostic, from data collection to crunching and analyzing, can take tens of hours per category. At worst, the diagnostics is not done due to the lack of time and wrong decisions can be taken. The pain Hypertrade addresses here again is time and data accessibility. With Hypertrade, you can automatically create a diagnostic in less than 2 minutes.

4 deliverables to make the best decisions

1. Measured impact of each sales driver

In the example above, it is clearly visible that despite strong promotion sales and improvement in distribution, assortment and price changes had a negative impact on the sales performances.

❔What decision can be taken from there:

• Identify which of these 4 sales drivers need to be improved.

• Define which sales driver needs to be prioritized.

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2. Dive down to the SKU by Store

A simple click on any of these drivers gives access to the products and store details

At a glance, category managers and merchandisers can identify:

• Which promo products drove sales down?
• Which new promo products impacted sales and how much?
• Which promo products stopped being promoted and how did it impact sales?

❔What decisions can be taken from there: my promotion strategies

• Increase or decrease the number of promotions?
• Increase or decrease promotion items distribution?
• Select the promotion items we want to re-use in the future?
• Select the promotions items we don’t want to re-use in the future.

3. Measured impact on Retail Indicators

Category Indicators vary each time the sales change. They deliver critical insights on the category’s assortment efficiency and its structure. They can be accessed, with their evolution vs. the last period, immediately.

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❔What decision can be taken from there: range and assortment strategies

• Reduce or increase the number of skus.
• Reduce or increase the number of Brands.
• Reduce or increase the number of price-points.
• Reduce or increase the distribution of items across channels and stores.

4. Measured Shoppers Behaviors that generated the sales

Traffic, basket penetration, average purchased price and number of items by basket define sales performances, and their variation explains sales results. These insights are almost instantly available, onthe same page:

❔What decision can be taken from there: the shopper strategies I need to grow sales.

• Does my Activity plan need to focus on penetration?
• Does my Activity plan need to focus on a number of items?
• Does my Activity plan need to focus on value per item?

⏱️Estimated time saved by Diagnostics: 14 hours

# 2. Score Cards

Score Cards are an efficient, fast, and extremely powerful way to

• Measure key performances.
• Benchmark the competition.
• Identify what are the next priorities to improve performance.

Score cards measurements are usually established in a set of different perspectives:

• Performances vs. last period
• Performances vs. the category
• Performances vs. the competition / other brands in the category

With Hypertrade, you can automatically access your score cards in less than 2 minutes, including the priority actions. Here is your global Score Card Menu

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Then you Growth Origins and the Range Status

A simple visual display show when there is an improvement (green) or a challenge to address (red)A quick glance at the ongoing promotions’ performances and their evolution

Simply focus on the Brands and sub-categories that require attention.

Benchmark sales, promo and range performances in a blink and focus only on the areas that need your attention.

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Estimated time saved by score card: 6 hours

Promotion Planning

#Promo Calendar

We have seen with the Category Diagnostics and Score Cards how simple it is to measure:

• Our Promotion Performance
• Our promotion over or under exposure
• Our Competitors Promotion Activities

The decision we now face is to decide, whether we want to invest or disinvest:

• When this should be done?
• Where this should be done?

This is when the Promotion Calendar becomes very handy. In a single view, marketers can visualize each promo (their own and the competition), their dates, and performances.

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Clicking on any of these values, it becomes easier to look at performances items by items, sales by stores or even effectiveness.

❔What decision can be taken from there: how do I want to plan my next promo moves

• Confirm my decision to invest or reduce my investment in promo.
• Select the channels where I want to invest.
• Select the period during which I want to invest.

⏱️Estimated time saved by promo calendar: 8 hours

#Promo History

Talking about Calendar inevitably drives us to mention history. It’s typically quite difficult to keep the history of all promos that have been run, the scope under which they have been launched and their corresponding performances.

Here again, technology and Ariane come to the rescue by enabling users to access all promo products history in just a click.

The first step is to just select the Brand and see all the items that have been promoted during the selected time period.

The second step is, for any selected item, look at when it has been promoted, how many times, in whichchannel, and what was the selling price at which the best performances have been achieved.

❔What decision can be taken from there: Which Item to select for my next promo

⏱️Estimated time saved by item: 4 hours

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About Ariane

Ariane is a Category Management solution, published b y Hypertrade, available as a Platform or as a Plug-in in existing solutions such as Power BI. Developed by retailers for retail players, it integrates hundreds of retail-expert algorithms. Ariane is currently used by tens of companies in South East Asia, Middle East and Africa. Contact us to book a demo