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30 Jun 2017
JDA Survey Finds Understanding Consumer Behavior Is the Missing Link in Manufacturers' and Retailers' Path to Omni-channel Success


The JDA Voice of the Category Manager Survey reveals that investing in big data and predictive analytics is of strategic and competitive significance for category management professionals in the next five years

In today’s highly competitive, omni-channel market, companies are realizing the path to success hinges on their ability to understand consumer behavior. Retailers and manufacturers can unlock significant competitive advantage by leveraging consumer insights to make category decisions and create localized merchandising assortments. The JDA Voice of the Category Manager survey, conducted by JDA Software Group, Inc., reveals findings from nearly 100 professionals responsible for category management and merchandising activity in North America. The report revealed that most companies lack the ability to mine and leverage important customer data, and are therefore failing to meet evolving shopping demands. As such, respondents indicated that their number one investment priority in the next five years is big data and predictive analytics (41 percent), followed by investment in customer-driven data science (37 percent).

“The fact that manufacturers and retailers plan to prioritize investment in big data and predictive analytics over the next five years is a true testament to the transformational impact that the modern shopper is having on these sectors,” said Todd McCourtie, senior director, solution strategy at JDA. “Companies are realizing that the path to success in today’s omni-channel market is to analyze and react to consumers’ preferences and behaviors; ultimately truly understanding how, why, and in which manner they wish to shop. Data-driven technologies can help companies make more informed localized merchandising decisions that, in turn, enhance the shopping experience for the customer and improve the brand’s bottom line.”


Driving consumer insights with data and analytics

Currently, companies have access to volumes of essential data about their customers’ shopping preferences and behaviors. Where companies fall short is in their ability to derive actionable insights from this mountain of consumer data. While respondents on average stated that they are somewhat successful in mining consumer data to generate usable insights (82 percent), less than one-fifth (17 percent) feel they are highly successful in their ability to leverage the data to derive actionable insights.

In fact, when asked to identify which processes respondents felt they lacked the most proficiency in, nearly 70 percent indicated that they are most behind on leveraging predictive analytics for improved pricing and merchandising—two capabilities that are of paramount importance for sustained success in today’s customer-centric world. Additionally, nearly 60 percent of respondents claimed that they are also behind in leveraging geographic and socio-economic data for targeted promotions and offers.

For manufacturing and retail survey respondents looking to improve merchandising, pricing and promotional efforts, the top two behaviors they’d like to gain additional insight into were the modern shopper’s path to purchase (67 percent) and price sensitivity (53 percent).


Localizing assortments to reach the modern shopper

The modern shopper has transformed the ways retailers and manufacturers operate and maintain profitability, as shoppers expect merchandise assortments to meet their needs from the first attempt. Survey respondents cited personalization and localization (68 percent) and increased development of digital technologies (62 percent) as the top two priorities they plan to implement within the next year to reach modern shoppers. Omni-channel retailing also remains a high priority, with nearly 60 percent of respondents citing it as one of their top two priorities. Effective assortment localization is dependent on a company’s ability to identify the key product attributes that drive local preferences and demand in each category. The survey found that companies are best able to evaluate the success of their localization efforts by measuring an increase in sales (37 percent), increased visibility into stores (21 percent) and improved inventory levels (21 percent).

Key investment priorities

With increased focus on localized assortments, technology investments are top of mind for both manufacturers and retailers. Unsurprisingly, the top two priorities driving the need for new technology solutions are automation as a means to do more with less, and consumer insights as a tool to support increased localization, dynamic pricing and improved merchandising.

Interestingly, from an investment perspective, respondents had varied opinions on which mobile technologies would be most beneficial to their business:

  • 26 percent indicated augmented reality technology that provides shoppers with personalized information while shopping;
  • 25 percent deemed the ability for customers to leverage beacon technology (Internet of Things) via mobile device for increased self-education on products;
  • 21 percent identified in-store mapping for easy self-navigation around stores; and
  • 19 percent believe location-based mobile coupons would be most beneficial.

Manufacturer vs. retailer point of view

Less than half of manufacturers and retailers feel they are successful in their ability to mine data to generate usable insights, though respondents from both sectors agree that there is more to be done when it comes to better understanding and addressing the needs of the modern shopper, and both groups have identified areas for improvement. For example, the majority of manufacturers surveyed (83 percent) see themselves lagging when it comes to leveraging predictive analytics for improved pricing and merchandising, whereas retailers report feeling behind on analyzing big data to recognize consumer preferences and demand trends (59 percent). Both sectors agree that their ability to leverage geographic and socio-economic data for targeted promotions/offers could be improved, with 60 percent of manufacturers and 59 percent of retailers citing this as a weak spot. Further, both retailers and manufacturers cited path to purchase and price sensitivity as the top two behaviors they would like more insight into surrounding the modern shopper.

Additional interest in beacon technology and augmented reality was reported by respondents, though neither sector is planning to prioritize investment in these technologies in the next five years. 


“Retailers and manufacturers that want to stay on top will need to be able to implement personalized localization at scale and with speed. While this will require some organization-wide changes to policies and procedures, as well as the adoption of technology solutions to help automate processes, it is a necessary evolution for those responsible for merchandising decisions. The success of a company’s merchandising strategy, both today and in the future, hinges on how companies leverage these data-driven insights to better serve the modern shopper’s ever-changing needs,” concluded McCourtie.


Survey Methodology
JDA Software Group, Inc. conducted this survey in April 2017 with nearly 100 professionals responsible for category management and merchandising activity in North America.

About JDA Software Group, Inc.
JDA Software is the leading provider of seamless supply chain planning and execution solutions for retailers, manufacturers, logistics providers and wholesale distributors.  Our unmatched solution portfolio enables our clients to reduce costs, increase profitability and improve visibility so they can deliver on customer promises every time.   More than 4,000 global customers run JDA, including 73 of the top 100 retailers, 71 of the top 100 consumer goods companies, and 13 of the top 16 3PLs.  With JDA, you can plan to deliver.


Last update 2 Feb 2018
PMI remains elevated at start of 2018
   Source: Investec Manufacturing PMI Ireland  -  IHS Markit

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