Supply, Demand, And The Art Of Merchandising

Demand-forecasting software promises merchandise-buying accuracy. Is there any room for art and intuition?

Successful retailing is having the right product in the right place at the right price at the right time. Why then, do supply and demand, the central forces of our free economy, befuddle even the best of retail merchandisers? In response to that question, merchandisers blame the lack of a crystal ball. But while merchandising solutions providers don't claim to have that kind of power, they do believe their solutions can lend help. Generally speaking, they also feel there's a lack of awareness among merchants that scientific demand forecasting and assortment planning solutions are out there – or a lack of retailer interest in using them. But while the days of a merchandise manager doing business with the aid of his coveted black book are all but gone, many merchandise management solutions providers say retailers aren't using science to its full potential. Most profess the virtues of a blend of intuition and intelligence.

Granularity is a buzzword that many merchandising solutions providers are using to describe their attempts to get the retailer closer to customer demand at the store level. "In terms of replenishment, we've seen a fair number of retailers adopt statistically based solutions that allow them to do lots of modeling," says Jim Dixon, president at Applied Intelligence Solutions, LLC (AIS). Dixon is a proponent of science and statistical modeling as the merchandiser's primary tools.