Letting merchants drive product attribution is a time-honored retail industry practice. However, merchant-driven attributes are primarily objective, inconsistent, and lack depth. However, for retailers, merchant descriptions of a product could set off a series of challenges beginning from item set-up, site search, demand forecasting, and merchandise planning. A customer-centered product taxonomy that describes the merchandise in the language that shoppers use will help overcome these challenges.
Speaking in customers' language rather than that of merchants has hugely beneficial ramifications across the entire retail value chain. Through visual, artificial intelligence-driven tagging and a carefully designed taxonomy, a product with two to three attributes can immediately unlock its sales potential to become a product with 10-15 attributes. Besides, when done correctly, product attribution instantly drives better site search, filters and facets, product recommendations, and demand forecasting. On-site conversion goes from an industry average of 2.5 percent to 4 percent to 5 percent and higher.
Significantly, demand forecasting using the language of customer-driven attributes enhances the ability to sell at full margins. This increases the ability to sell to customers what they are looking for right now and decreases the need to mark that inventory down later.
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