• Customer experience (CX) is the most important factor that impacts consumer loyalty.
  • CX has evolved from focusing on the point of sale to connecting with customers in the discovery and evaluation phase (DX). 
  • This shift takes retailers from product-centric, to customer-centric.
  • Retail data analytics can help retailers understand customer behavior and engagement with their brand, ultimately providing a more personalized customer-centric shopping experience. 
  • Customer-centricity can drive benefits, including full-price sell-through, inventory optimization, margin optimization, customer profitability, and customer loyalty. 


What Is the Customer Experience? 


It’s no secret that the customer experience (CX) is the most crucial element impacting customer loyalty.  

According to Deloitte, companies that provide a great customer experience are up to 60% more profitable. [1]  But, where should a brand or retailer start thinking about the customer experience in the merchandising process?

In order to properly answer this question, we need to examine the evolution of the customer experience.


The Evolution of the Customer Experience in Retail 


Customer experience initially focused on the point of sale and beyond. This makes sense, as the commerce function is the closest to the customer and, therefore, the easiest to influence.  

This focus brought omnichannel experiences like “click and collect.” Call centers moved from traditional 1-800-YOURBRAND and email to expanded digital channels, including chat, SMS, and social. Customers enjoyed more engaging retail experiences in-store and online.  

The next focus area was connecting with customers during the discovery and evaluation phase – before the sale.  

This part of the customer-centricity curve is the digital experience (DX). In retail, digital experience involves using consumer data to create a personalized shopping experience.  

Of course, retailers must collect all of this information to get closer to their customers and understand how they behave, and why. 


Shifting From Product-Centric to Customer-Centric 


Customer-centric merchandising is the next chapter in the experience story.  Customers want to buy what they want, when they want it, and on channels or in ways that make the most sense to them. 

To merchandise to your best customers and drive actual profit, retailers must shift from focusing solely on what makes them money (a product-centric approach), to who makes them money (a customer-centric approach).


Stay Ahead of the Curve


Deloitte highlights that while many retail functions, such as marketing, have focused on the customer for years, it has yet to be fully embraced within merchandising, which is traditionally considered the heart of retail. 

It states that, “The biggest need to address evolving customer demands at scale and pace is to establish responsibility and authority for the customer within merchandising and integrate it with customer-focused efforts throughout the retail organization. Even well-intentioned customer-centricity will be doomed to underperform if it fails to transform the end-to-end value chain.” [2]

Retailers who utilize technology and data to truly understand their customers will be able to apply these insights throughout the entire merchandising journey – before the customers are even aware of the products that will be coming. 


Benefits of a Customer-Centric vs Product-Centric Approach 


Getting closer to your customers at all stages in the product life cycle and beyond will drive huge benefits. 

What is important to one customer may look different to another. By utilizing data-driven customer insights, you can provide each customer with a personalized experience across their individual customer journey.

Retail technology helps you consolidate this data and access insights so your team understands how customers behave and how they want to engage with you.   

Let’s take a look at some specific impact areas: 

Full-Price Sell-Through: 

    1. Customers spend less time shopping than ever before, so make sure they always find what they’re looking for quickly by putting them at the center of your assortment planning strategy.
    2. Increasing full-price sell-through is one of the easiest ways to drive revenue and protect against markdowns. Customers who know they can find what they’re looking for are significantly more likely to pay full price versus running the risk of missing out on your latest collection. 

Inventory Optimization

    1. Taking a more customer-centric approach to inventory allocation that considers customer behavior, geographies, and channels means you will carry less inventory. 
    2. With retail technology, you have the ability to scale this activity across your entire business, allowing you to take surgical action and increase profit by ensuring you have the right products in stock. 

Margin Maximization

    1. Enhance your margins by ensuring you set the right first price, negating the need for costly markdown activity. You should also utilize data to determine the optimal discount or promotional opportunities based on customer behavior. 
    2. Drive sales and revenue by ensuring customers find what they want and pay full price. By combining this with the ability to control inventory, marketing, and other operational expenses, you will ultimately drive those costs down.

Customer Profitability

    1. Identify your most profitable customers and take a customer-centric approach to your assortment and pricing strategies with this cohort. 
    2. By understanding who is actually profitable, you can focus your time and resources on creating personalized experiences that keep your best customers coming back for more. 

Customer Loyalty

    1. Consistency breeds loyalty.  Be a brand that customers can rely on to find what they need, and they will come back – and tell all their friends.  
    2. Moreover, by creating personalized experiences that put the customer at the center of your strategy, you can increase the lifetime value of your best customer segments. 




Once you understand the importance of taking a customer-centric approach to retail, the next step is to infuse data-driven insights into your strategic merchandising decisions, from assortment to pricing and promotion to product exposure. Keeping the customer front of mind in each of these steps will put you ahead of the competition. 

Discover how customer-centric your business is with our Customer-Centrcity Self-Assessment, and see how you compare to similar retailers who participated in our Key Report Insights. 

At EDITED, we combine internal business data and contextualize it with market data to give softline retailers the insights they need to drive customer-centricity. Find out how our AI-powered retail intelligence tool can help your business better connect with customers at every stage.