Global economic stress, workforce shortages, lingering inflation, supply chain hiccups and demands for greater omnichannel capabilities continue to challenge retailers and brands while also impacting consumer behavior. Today’s consumers are price-point wary and want more bang for their buck. They’re savvy shoppers who expect their favorite brands to deliver exceptional shopping experiences online and in-stores.

As a result, the retail value chain is being upended. Traditional wholesaling, merchandising and marketing tactics simply no longer work. And pouring through spreadsheets at a Monday morning meeting doesn’t cut it. 

But there are solutions. To stay competitive, retailers and brands are partnering with tech companies to deploy visualization and assortment optimization tools while also rethinking their wholesale processes. And with consumers, brands are using various tech tools along with new approaches in how they merchandise assortments.

For their part, industry experts at NuORDER by Lightspeed, a leading business-to-business e-commerce platform, believe that successful retailing in today’s market requires executing mindful merchandising and thoughtful curation to drive sales, profits and lifetime customer value. Success also requires having a read on the entire retail landscape. Because NuORDER works with over 3,000 retailers and brands including Nordstrom, Saks Fifth Avenue, Net-A-Porter and Selfridges, its partners have access to data-driven trends in the market, which helps inform their merchandising decisions.

But what role does mindfulness actually play in merchandising?

Heath Wells, co-founder of NuORDER by Lightspeed, says today’s retail leaders need to be mindful of every aspect of the modern value chain. From demands for greater sustainability and ethical sourcing to macroeconomic challenges and seismic shifts in consumer behavior, merchants need to be mindful, nimble and flexible.

One of the trickiest areas, though, is unlocking the mindset of consumers in this post-pandemic period. 

“Consumers are savvier than ever given the sheer optionality at their disposal across categories,” said Katie Thomas, who leads the Kearney Consumer Institute (KCI), an internal think tank at Kearney, the global strategy and management consultant firm. “One of the stickiest behaviors coming out of the pandemic is consumers’ penchant for price shopping online. This ability to easily search and compare makes curation both tricker and even more necessary.”

Thomas said “American consumers are used to products being available on the store floor,” and therefore “newer or ‘mindful merchandising’ tactics sometimes include merchandise that is housed elsewhere – either in the back or at a separate location.” Moreover, Thomas said that retailers need to know that “this can cause friction at an important part of the buying process – purchase. It’s important that brands consider this when evaluating simplified merchandising or experiential tactics.”

For example, according to NuORDER’s data, a retailer’s high sellers are usually the more basic colors but if the store doesn’t have eye-catching options to drive window appeal, then a customer will not feel compelled to buy. 

“When I worked in retail, we would style the front window with a ‘cool’, unusual or eye-catching product that had a point of view,” said Wells. “This would draw in shoppers who would ultimately buy the more common style or color with less ‘window appeal’. It was the cool product that would drive the rest of the assortment and conversely, it would be super hard for a showroom salesperson or store merchandiser to spruce up a drab wall with only black, gray and white shoes – even though they are the highest selling colors.” 

Thomas said today’s consumers across generations, including Gen Z, “continue to prefer to both discover and purchase products in-store, wanting to engage with the product and see the color, fabric and fit. Simplified merchandising allows consumers to better visualize and engage with the products and can be further enhanced by in-store technologies that provide more details.”

Wells points to what we know about humans synthesizing information visually, noting that “consumers are visual shoppers, and thus, merchandising is a visual process. This begs the question: ‘What is keeping us from planning these important assortments visually as well?’’

“What is somewhat shocking, is how little the assortment process has changed,” said Wells. “A process that is completely vital to retail success is overlooked.”

Put simply, while retailers today have the critical data to understand consumers’ preferences, what is missing is the visualization of the data in a digestible and usable way. “Most are mainly looking at sell-through data to build better assortments, but this can be a trap because sell-through data is often only served at the macro level, without taking into consideration how a product was merchandised,” said Wells. “How each product performed is dependent on how it was assorted.” 

And while mindful merchandising is fueled by data, it takes leveraging the data in the right way to be effective. Wells said he’s “seen zero technology to tackle the visualization of retail merchandising and curation. Pairing data and insights with planning isn’t successful when it’s one or the other – it has to be both.” 

“Technology and process optimization has been applied to many other areas in retail,” said Wells, referencing e-commerce and email marketing as examples, “but the core functions to deliver the best assortment are a highly antiquated combination of spreadsheets and a messy patchwork of physical samples, which are not an ideal way to visualize the assortment. Technology is the path to updating and optimizing processes to delivering the best.” 

Recent research finds that implementing technology for this purpose is of high interest for leaders in the industry. Companies have acted enthusiastically about onboarding technology that will help to achieve business goals with executives in the consumer product space making strategic decisions based on advancements in technology.  

A recent study conducted by IBM’s Institute for Business Value in 2023, which polled 3,000 retail and consumer product CEOs, found that a majority of businesses are concentrating on the customer experience and are viewing technology as a major benefit to gaining profits. Modernizing technology ranks as one of the top priorities for consumer products businesses with 51 percent of respondents stating that modernizing technology is one of the most influential external forces of consumer product enterprises. 

“It’s leveraging the right data to inform product and merchandising that reflects your customers’ needs,” Wells said, adding that there’s a need for tools to work together. “Companies need a system in place that helps merchandising teams better assort, work together and visualize complex assortments across all stores. You don’t want your data and visuals living in separate tools or spaces that require reconciliation or back-and-forth admin. This really inhibits your team’s ability to build compelling assortments.”

These capabilities are also useful for companies who are wholesaling, which has emerged as a vital component of brands’ strategies as they redirect from direct-to-consumer. This shift has proven to be highly advantageous, as wholesale has surpassed growth expectations, experiencing a remarkable four-fold increase since 2020. Wholesale strategy priorities have returned to numbers seen pre-pandemic, with a relatively even split between selling more into a brand’s existing retail base (now 45 percent versus 40 percent in 2020) and sourcing new retailers (47 percent now versus 46 percent in 2020). Additionally, current interest in direct to consumer (DTC) has gone down slightly to 8 percent, compared to 13 percent seen in 2020.

The appeal of wholesale lies in its ability to provide brands with a superior return on investment, a stable and reliable source of profits, and a valuable tool for expanding into new regions.

A recent State of B2B Commerce report by NuORDER reveals compelling insights into the reasons why brands are investing in wholesale. A significant majority of respondents (57 percent) cite the ability of larger orders to scale revenue as a key motivating factor, while 56 percent of brands acknowledge the role of retailers in marketing their brand. The report also points out that retailers are aiming to reduce inventory levels by the end of 2024. Consequently, brands are encouraged to concentrate on refining their merchandise assortment to prioritize products with high sell-through rates.

Wells said this industry-wide shift is driven by the understanding that wholesalers can contribute to better outcomes by collaborating closely with retail partners and improving merchandising practices. But it is crucial for brands to consistently innovate and update their strategies, a factor often overlooked in wholesale operations. Deploying the right technology is also key. Wells said by coupling mindful merchandising strategies with a robust wholesale-driven omnichannel approach and powered by his company’s Assortments platform, brands can drive conversions and bolster margins.

One brand that has put NuORDER’s unique method of mindful merchandising in place is Brunello Cucinelli – who before onboarding was using Excel to merchandise stores. NuORDER’s solution allows the fashion brand to write “smarter buys” using filters and various fields (by door, category and delivery) within the tool that allows customized assortments that can later be analyzed by a team. Since utilizing the solution, Brunello Cucinelli reports more accurate roll-ups, improved processes, and the ability to analyze orders more quickly, give feedback and collaborate on expanding to more stores. 

Similarly, in partnership with Bloomingdale’s, NuORDER implicated an assortment planning tool for the creation of a store concept called Bloomies. The smaller store model required the retailer’s team to create highly elevated assortments mixed with luxury designers and emerging labels which they were able to complete successfully offering the right curations to the right locations. 

In conclusion, embracing mindful merchandising, leveraging technology for data-driven decision-making, and optimizing wholesale strategies are critical steps for retailers and brands to thrive in today’s challenging retail landscape. By staying attuned to consumer demands, adopting innovative solutions, and refining merchandise assortments, retailers can enhance the customer experience, drive sales, and achieve sustainable success in the evolving retail industry.

NuORDER by Lightspeed Launches ‘Assortments For Brands’

The same assortment planning technology used by retailers like Nordstrom, Selfridges and Saks Fifth Avenue is now available to brands to help revolutionize the industries traditional merchandising process.

NuORDER by Lightspeed, the business-to-business commerce platform, is releasing a new Assortments technology to disrupt the traditional merchandising process as brands know it.  

The technology, adapted from multi-brand assortment builds created exclusively for retail partners, including Saks Fifth Avenue, Nordstrom, Bloomingdale’s and Macy’s, among others, will enable brands who own and operate their own retail stores to visualize, merchandise and plan pre-book appointments all in one collaborative online environment. 

Notably, NuORDER Assortments addresses the ongoing use of antiquated processes that many brands still use today including manually populating and updating multiple Excel spreadsheets, which are time-consuming and lead to less-than-optimal results and allocation of inventory. 

The rollout of the technology comes as industry leaders prioritize upgrading merchandising processes. According to a 2021 report by McKinsey, 58 percent of fashion executives said that assortment planning is the major area for the expanded usage of data analytics. Similarly, in 2022, the company found that 61 percent of fashion executives say that end-to-end process management systems will be the most important investments between 2021 to 2025. McKinsey’s research also found that applying integrated digital solutions to merchandising has the potential for up to 50 percent faster time to bring products to the market with an 8 percent rise in full-price sell-through and a 20 percent decline in manufacturing costs. 

Through its Assortments solution, NuORDER will help streamline the process with expectations of a 55 percent reduction in time spent on fixing errors, a 40 percent reduction in time spent on sizing and a 60 percent reduction in time spent on manual data entry. 

Advanced visualization capabilities enables users to conduct more effective visual style-out sessions to identify merchandising gaps and avoid duplication, drill down to view localized assortments by store and region and optimize inventory allocation using built distribution. On the platform brands can slice-and-dice the data by any product attribute to make more informed decisions, view and compare planned spend against budgets and share and edit assortments in real time for better communication and collaboration across internal teams. 

Here, Heath Wells, co-founder of NuORDER by Lightspeed, discusses the challenges retailers and brands face and how the company’s collaborative solution improves merchandising efficiencies.

Fairchild Studio: What challenges do brands operating and planning assortments for their own stores face today?

Heath Wells: The majority of fashion and footwear retailers plan assortments using antiquated combinations of spreadsheets and product samples. Buying and unit allocation is mostly done through non-visual tools that are not collaborative. Despite this, a retailer needs to pick merchandise that works together, and every store and channel needs to offer curated products. Each store needs a “point of view” that captures the interest, imagination, and needs of a target shopper.

This requires a collaborative tool that enables retailers to visualize their assortment by any data point, but teams are not able to efficiently and effectively collaborate working from analog and offline systems. This manual way of operating leads to a near-impossible task of optimizing the right assortment for each store and finding gaps to fix or fill.

Fairchild Studio: How have you seen the way brands and retailers approach merchandising change? 

H.W.: Unfortunately, there has been minimal change, retailers are still relying almost entirely on manual processes using spreadsheets and physical samples to plan a store’s assortment.

Initially, we built a visual assortment planning solution for major multi-brand retailers like Nordstrom, Saks Fifth Avenue, The Bay, Bloomingdale’s and Macy’s. Given the repeated success of our retail partnerships and the improvements they were able to make to their processes, the natural progression was to offer this same game-changing technology to brands who own and operate their own retail stores.

As we set out to build this new solution, we visited and spoke to many customers. They all are plagued with similar issues of operating mainly on spreadsheets. They all knew this was ineffective, but they lacked a tool to solve the problem.

Fairchild Studio: How does an assortment tool help overall business productivity? 

H.W.: Companies often run campaigns anchored around a few really eye-catching or splashy products that help drive interest, but imagine if you went on a site or in-store and those splashy products weren’t assorted with a strong point of view. Consumers often shop with an overall look in mind. In this case, they won’t have a chance to experience and shop the full brand story.ow on earth do we expect retailers to tell a full brand story in Excel? 

Marketing campaigns and PR buzz may revolve around products that aren’t offered in all stores, have limited availability or “sellability,” so if the assortment that supports these featured products isn’t planned in advance, these promotions end up in a silo. 

NuORDER Assortments connects siloed functions together in one place to make sure that what you promote is also what you sell. The product is displayed like an e-commerce website, so it’s easy for the marketing, merchandising and planning teams to have these conversations earlier. Strong assortments can then elevate brand equity.

Fairchild Studio: What would you say is the best evidence that NuORDER’s tools are working? 

H.W.: The best evidence is the feedback we get from brands, which always includes one or more of the following: More sales due to delivering the right products to the right stores (and customers). Increased margins. Better productivity among teammates. Stronger brand identity through merchandising. And utilizing data and analytics to create thoughtful assortments.