My friend Ian Jindal who is the editor at Internet Retailing wrote an interesting article about the concept of ‘purchandising’. In many way it mirrors Alvin Toffler’s concept of ‘prosumption’ where the consumer takes a more active role in the production of a product or service (examples being using automatic teller machines (ATMs) rather than being served at the window of a bank, organising transfers from an online bank account, or direct-dialing the number on a telephone rather than getting the operator to connect you). It also takes in concepts like consumer insights and better supply-chain management:
“Purchandising” would be the practice of improving the specification and procurement of products and services so that they better match the needs, desires, interests and aspirations of customers (thereby reducing the marketing and promotional demands to convert customers’ interest into cash). This is different to ‘normal procurement’ since it would be based upon insight to customers’ behaviour, a high level of collaboration and ultimately co-creation.
All of this seems to stem from the need for retailers to be more efficient and competitive together with an unparalleled amount of data that online shopping can provide. Every customer journey can be recorded and analysed for insight. It is also about risk reduction in the purchasing process.
So for instance I have been looking for a black acrylic or cotton ribbed roll-neck on a number of sites and have been unable to find one. If there were enough people making that search, it could indicated unsatisfied pent up demand. On the other hand if you have lots of black crew neck jumpers which are not getting searched for or being part of someone’s web journey then you know that stock needs to be liquidated quickly.
Where the concept is less likely to help is when there is a steep surge in a particular product (like the special ingredient in a Delia Smith or Jamie Oliver recipe announced on their TV show the night before). So in some respects it is more of a defensive move, like a hedge in commodities trading.