Ushering a New Era: Next-Gen Retail Solutions

By Jason Hosking, co-founder and CEO, HIVERY

It is imperative for the CPG industry to be far more dynamic and responsive than it currently is. The experiences over the pandemic have dramatically highlighted this need—with huge spikes in demand and supply chain challenges leaving many shelves empty, and consumers bewildered. Currently, the industry is set up to update what goes on shelves once a year, maybe twice—from strategy to planning and then execution.

Aligning assortment merchandising strategies with consumer purchase behavior and responding to change in a timely manner has been the holy grain and focus of the retail category management industry for many years. At the same time, traditional merchandising solutions have remained relatively unchanged since the 1980s, putting more pressure on the natural human decision-making process. These current processes and solutions rely on outdated industry conventions, human constructs and assumptions.

With rapidly changing consumer expectations combined with ever-complex global supply chains, hybrid shopping models and a complex global environment, bricks and mortar retail needs to step up to the challenge. Part of the solution lies in the use of data. We’ve always believed that ‘data has a better idea’. It's been our philosophy from the start. We are part of a wave of next-generation analytics solutions that are set to change the way CPGs and Retailers collaborate. These analytics enable us to accurately simulate different demand signals and their impacts. They are much more fluid and "conversational" in nature, thus allowing us to identify the best action to take to achieve our objectives.

Next-generation solutions, often seen as prescriptive analytics, are powered by machine learning and are more goal-focused, rather than process-focused. The NextGen merchandising solutions aim to make category management more effective by using the wealth of datasets that is available today with sophisticated machine learning algorithms to drive merchandising decisions to a level of precision not possible with current offerings. These NextGen solutions are essentially augmenting assortment strategies and market actions with transparency. More importantly, they are simple to use. You do not need a data science team to run the numbers for you, you just need to pose the right questions and simulate it. This is what humans are good at.

We are moving from an era of merchandising solutions that were good at "planning” but static to one that is dynamic and augmenting our strategic understanding— providing a new level of competitive advantage. This is where we, as an industry, are heading.