The glittering goal of store-specific assortments and planograms beckon retailers and I wonder: can retailers over-optimize? When I see retail technology roadmaps and capacity planning, there seems to be a real danger that the corporate office may be equipping itself with expensive technology to build plans that the stores cannot (or will not) execute. Those incredibly precise assortment and space plans may be perfect. But what does it matter if they are not executed to the same level of precision in the stores?
Did you ever play SIMCity 2000? As the city builder, you may have really wanted to build a tech-centered economy with a high standard of living. So you’d build schools, universities, research centers, and increase taxes on polluting factories. But if you didn’t have a way to manage solid waste or traffic, your SIM’s would move away. Then your city would be bankrupt. Game Over. You had to progress your city at an “equal” pace. Focus too much on producing energy and crime would escalate. If you focus on housing; jobs became tight. Focus on trade and healthcare declined.
Retail is like that.
Advancing assortment and space optimization can build masterful plans for stores to meet customer demand. But if the plans are not executed, what was the investment for? That’s what we mean when we say “can retailers over-optimize?”
Retailers want to use assortment and space optimization to achieve benefits in customer loyalty and inventory productivity. Each day new solutions enter the market to meet those goals. But store leaders and the people in the stores who set and maintain those plans have to be on the same journey.
Make sure your assortment and space investments have an equal focus on providing tools and resources for your stores to execute your micro-targeted plans. Otherwise after all your investment: Game Over.