Oh boy. Expect some hotly held convictions in this discussion.

Kohl’s has been working with a huge BI firm for years, sharpening up inventory flows and improving in-stocks. That said, eliminating the chief merchant position reminds me of Borders eliminating the CIO position … and we all know how well that worked.

Good God, this trend boggles my mind.

We seem to forget that we sell PRODUCTS and the selection of those products is an art form, not a science.

Science is great for figuring out the “how many” and maybe the “where and when and how much to buy” … but the “what?” Pure art — and the art is getting lost.

Merchandising remains a core role within the softlines and hardlines categories. Added SMART data that is used by a chief merchant accelerates her/his understanding of what merchandise is working within her/his chain, as well as its success in competitors chains.

Building in analytics to support those better, faster decision frees up time to work through and conceptualize the next set of innovations, as well as the development of people on the merchandising team. Gone are the days of listening to the malarkey of a chief merchant who may say, “We’ll never put purple in the line. We dictate fashion, and that’s what the customer will wear.” Keep the sharp chief merchants.

Advances in technology and analytics provide the chief merchant with better tools to make decisions up front and throughout the season — analytics do not replace but augment the role.

Omnichannel simply shifts the merchandising starting logic from product to customer but does not negate the importance of having the right range of assortments and styles at the right stores or online. The combination of analytics and customer focus provide an expanded yet more demanding canvas for the chief merchant to guide the company’s growth.

And no, marketing does not replace merchandising. True that the evolution of the marketing function in retail capitalizes on the connected consumer, social media and the increasing digitization of the shopping experience. Yet this does not spell the end of chief merchants, but their evolving relationships and role inside of retail organizations. The chief merchant is not going away.

I generally hate sports analogies, but this one seems appropriate. In Major League Baseball there seem to be two camps of managers: the old crusty, play what your gut tells you is right manager who rarely glances at the stacks of stats regarding how left-handed players whose names begin with a vowel perform on Wednesdays on the road when the humidity is exactly 9.6 points lower than the field temperature, and a younger set of data-driven managers who seem permanently grafted to a deck of printouts. Both styles of managers win games and both lose games. I think the same thing applies to merchants. There is no question that there should be closer links between what have been the traditionally functionally separate disciplines of merchandising and supply chain. At the same time data should inform but not necessarily decide. I remember once going into a well known chain in Florida in January. I saw a clerk building a mass display of canned egg nog. Intrigued, I said to him, “I wouldn’t think canned egg nog… Read more »

The traditional roles of retail leadership are changing because the customer expects more and different from retailers. While prescriptive analytics drive huge benefits with improved recommendations, the strategy and vision of how the engine should translate customer insights into action continues to be a vital element for success. The strategy of merchandising is key. Understanding the trends, foreseeing the opportunities and establishing objectives and strategies that include omnichannel as well as advanced analytics is not removed from the equation. Kohl’s move could be interpreted as recognizing the hand and glove of marketing and merchandising. Target’s move could be interpreted as a recognition of the importance of advanced supply chain strategies and execution. Walmart is and should always be observed as an anomaly in retail. With nearly half a trillion dollars in sales, their needs are not the same as other retailers. The role of chief merchant is key to retail success. How the strategies and tactics are internalized will largely depend on the available talent within the organization and available experience in the market. There… Read more »

In fairness to Kohl’s, the chief merchant has also had marketing responsibility. (First Jay Baker, then Kevin Mansell … and my standard “full disclosure” is that I worked at Kohl’s from 1982 to 2006.) This is not the same as suggesting that the head merchant is somehow “reporting” to marketing, but it does imply that the two functions are joined at the hip.

To the broader question, merchandising continues to be both art and science. There is probably more need for “analytics” today (just as in Major League Baseball) given the complexity of data, omnichannel and logistics — but there is always room for gut instinct, recognizing trends and exploiting key items.

I was speaking to a merchant just yesterday and one of the key things she mentioned was that not one software product addresses her needs for data analysis when it comes to assortment planning. If it’s just a matter of analytics and Big Data, why isn’t there?

Different retail brands don’t buy the same things and for the same customers! Let’s say you run the numbers and show a high sell-through for a certain item. Do you buy it again? What if only 20 percent of those purchases were made by your top customers? Who should you be buying for?

There is a lot more to merchandising than just numbers, but that’s just my 2 cents.

Of course data analysis and algorithms change the game for top merchants.

Some decisions, like forecasting order quantities, sizes and colors of a garment, or the depth and timing of markdowns, may well lend themselves to data modeling, machine learning and automation.

But it takes a human being—a team, really—to define merchandising strategy and tell the machines what their objectives should be.

So my response is an unqualified “Yes.” The Chief Merchant is needed more than ever to lead this mission-critical process. That requires insight into product, consumer and fashion trends as well as promotion marketing, supply chain and financial analytics.

Relatively few individuals possess the rare combination of left-brain and right-brain talents needed to excel in this role.

Omnichannel? Come on, do we need to stick that phrase in everywhere? I agree with James, having lots of data doesn’t eliminate the need to analyze that data; on the contrary, it makes the need even greater.

Analytics is the problem! There’s WAY too much data scouring going on now vs understanding the customer and understanding how to be AHEAD of the customer. I guess if you’re nothing but a warehouse, it’s okay to let the numbers lead, but if you’re in any kind of fashion business (fashion meaning “rapid product change”), you’ve got to have great gut instinct and no fear. You have to be able to “feel” what’s right and pounce on it.

The lack of merchant leads today is what’s giving retail its boring flavor. Same-same does not equate to a great business. Risk taking does.

I actually think we’ll see a lot of agreement here. My company writes analytical software to drive Test & Learn retailing, and roughly 40% of those tests relate to merchandising. So believe me, I’m as committed as anyone to the power of using data in merchandising decisions. That said, clearly some merchandising decisions—largely, to quote Paula, around the “what”—need to be made with a feel for the business that goes beyond the data.

In addition, the big problem with Big Data is red herrings…so many supposed insights are not causal. Data and analytics are only useful when they tell you what truly works and what doesn’t, to drive sales and profit. The key is: how do you apply the right data to the right decisions, and no more? That is the question with which the Chief Merchant needs to wrestle for merchandising (… and the Chief Marketing Officer for marketing… and the CFO for all investments!).

Is it critical that retailers develop smart ways to learn from the data they can gather? Absolutely.

One big danger with data science is that it is essentially and inherently conservative. What can be derived through data tends to reward the safe and dull and discourage true market innovation that will drive consumer demand.

This means relying too much on data is a certain way to kill any retailer (or any business).

Success (all business success) requires a balance of conservatism with taking smart risks (that won’t all work out—but taking the risks is critical).

I’d recommend reading “The Fires” by Joe Flood for an interesting and unusual look at the risks of data. Flood documents NYFD choices driven by Rand Corp big data analysis… And shows how those choices led to untold citizen deaths, huge property damage, and the creation of slums where thriving neighborhoods had been.

The traditional roles of retail leadership are changing because the customer expects more and different from retailers. While prescriptive analytics drives huge benefits with improved recommendations, the strategy and vision of how the engine should translate customer insights into action continues to be a vital element for success. The strategy of merchandising is key, understanding the trends, foreseeing the opportunities and establishing objectives and strategies that include omnichannel as well as advanced analytics is not removed from the equation. Khol’s move could be interpreted as recognizing the hand and glove of marketing and merchandising. Target’s move could be interpreted as a recognition of the importance of advanced supply chain strategies and execution. Walmart is and should always be observed as a anomaly in retail. With nearly half a trillion dollars in sales, their needs are not the same as other retailers. The role of chief merchant is key to retail success, how the strategies and tactics are internalized will largely depend on the available talent within the organization and available experience in the market. There… Read more »

Merchandising is both an art and a science. Data is solely the science. Analyzing and interpreting the data is more of an art. And this does not even include the merchandising art of choosing the right products needed at the right time, and in the right places. There is also the art of managing the financial aspects of merchandising—pricing, margin, markdowns, open-to-buy, promotional costs, visual merchandising costs, etc.

The chief merchant role is not going away, it is just evolving with the new realities of customer shopping.

This is an amazingly hot topic right now, even in my own household. My wife is a retail merchant and I run a retail predictive analytics software company focused on merchandising and planning. After we both read this article, her comment to me was “It’s interesting to see how intertwined our jobs are—your company is building software to help merchants while at the same time eliminating our jobs!” She made this comment in jest, but based on how the questions in this article get posed, this is often times a common sentiment. Like poor John Henry and his shovel getting replaced by a drill machine. This couldn’t be further from the truth in terms of retail and merchandising. In this discussion it seems as though there are multiple issues at play with causality being incorrectly assigned. In the examples provided (Kohl’s, Target, Walmart), I agree with earlier comments that there are likely a number of reasons why each organization made their decisions. But it seems an illogical leap to state that analytics and machine learning… Read more »

Years ago I was a conference where the speaker said there are two ways to merchandise and develop new products. The number crunching data type who can gain a slight competitive advantage, and the creative type who can significantly move the needle when they make a hit. I think chief merchant is the same way, you need someone who can move the needle significantly to go with the data analytics.

There is ABSOLUTELY still a need for the position in retail. Sorry for the all caps, but this question simply fuels the fears of the “old guard” that data/analytics will replace them. It will not. It will enhance and supplement their experience.

Here’s a simple equation that sums it up:

Data + Gut > Gut = Better Decision Making

So when analytics is combined with experience/gut, we get better decisions.

Partnership and collaboration between the analytics group and the merchants (and other parts of the organization) leads to better results. We will continue to need human input to address context and ensure that the recommended prescriptive action still makes sense in business terms.

Their role is most certainly changing, but the chief merchants will remain a critical part of the retail executive management team.

Data is tracked behavior. Therefore it is history. History helps with supply chain and on comp projections. Science has come a long way to become indispensable. But predictive analytics on color, texture, fit, and fashion? Not so much.

But the future? That’s the domain of Retail Royalty. Merchant princes or princesses are old school AND they are the future. Look at how some pure plays run by tech geeks have to bring a garmento on board to sustain the brand.

Among the troubles of today’s stores is a sea of similarity. With abundant hyperbole in all things digital, its easily understood that brand runners allowed data to distort the view of the customer in order to protect performance in post Great Recession years.

Macy’s rollup of hometown stores into a national chain and the resultant thud proves the value of merchants who posess a discrete and sensitive knowledge of their customer on a store by store basis and what will surprise and delight her. No easy task. Certainly not cheap.

That’s why we say, “retail ain’t for sissies!”

The data is the true key here. Retailers still are not maximizing their use of data, regardless of its position in omnichannel marketing, analytics, or any other use. This is a great example of where retailers are forgetting their basics in order to split responsibilities, thinking that “siloing” their management and organizations will bring a solution to their retail issues…it will not and retailers need to look beyond this.