Sep 24 2021
6 minute read

Align marketing and merchandising with visibility into product performance

Does your marketing department promote any old product they please? Does your merchandising department influence what should be prioritised? Are there arguments about whether or not merchandising buys the right products, and whether or not marketing promotes the right ones? 

This article will show you how to align these departments through mutual visibility into individual product performance, and how to make them even more efficient with automation.

Retailer data in silos

Your CRM and your customer data are in the same place, yet product-level performance data is strewn about like that load of laundry you said you were going to do. 

You already have a lot of the pieces, but the puzzle hasn’t been put together yet:

  • Your category managers/merchandising teams have the category, brand, and product performance data about margins, return rates, cost of goods sold, revenue, and stock levels.
  • Your marketing team knows the spend of each campaign, ad set, and ad, the number of impressions the campaigns received, and the return on ad spend.
  • Your ad spend, number of impressions, CTR (click-through rate), and other marketing performance metrics for each product is kept gated in platforms like Google Analytics, Facebook, and Google Ads.

Misalignment causes problems

Have you experienced any of these situations? 

  1. The marketing team promotes discounted products instead of new arrivals, which jeopardises the margin and increases the length of stock turnover. 
  2. The merchandising team’s only solution to poor sales is to decrease the price, because they know many times the product was sold, but not the visibility of each product on offer.
  3. The merchandising team manually briefs the marketing team on which SKUs should be promoted, and the marketing team creates separate new campaigns for these SKUs. This is time consuming, inflexible, and delivers low ROI because new campaigns need to be reviewed and approved by the platform, and start with zero history.
  4. The marketing and merchandising teams do not have any important KPIs in common (e.g. profit). 

If any of these sound familiar, you can significantly increase the productivity of your company. Based on the hundreds of enterprise companies we call clients, we've found that the first step might be easier than you think, and can create a massive impact for your company.

How to align your marketing team with your merchandising team?

1). Connect the data streams

We start by simply stitching together data from our clients' marketing channels, which gives visibility into the ad spend and other product marketing metrics. Reports like this can be done within just a few clicks (allowing access to Meta Ads, Google Ads, and Google Analytics).

2). Learn from the data

Once both teams have visibility over their products, categories, spend, and the brand's overall marketing performance, a plethora of hidden opportunities are uncovered for business stakeholders. 

For instance, you gain visibility into the proportion of discounted products being promoted per channel, and into whether or not a particular channel is only promoting discounted products.

We often find that a client’s spend distribution isn't correlating with their ROAS (return on ad spend) or revenue. This insight offers merchandising teams visibility into the spend on their categories and brands, and drives strategic decisions like which categories to prioritise based on seasonality or stock volumes.

3). Adjust the workflows

By aligning your departments around an accessible source where all your data is available, the marketing team will know which products are a priority for the category managers (e.g. at risk of becoming deadstock) and can direct focus there. 

The easiest way to enable merchandising teams to influence which products are prioritised is to give them a spreadsheet where they can simply prioritise every product. Marketers can then automate the promotion of products important for the category managers and report the cost of promotion per SKU in real time. This saves marketers a lot of time creating and reporting campaigns.

Your merchandising team will know the precise visibility and marketing performance of each product they’re selling as well as the promotion cost to actually sell the product. They can use the knowledge about spend per SKU to assess how difficult it is to sell a given item, which can then drive merchandising decisions. The merchandising team can also automatically send signals to increase the promotion of certain products, rather than always relying on decreasing their price. 

Next steps

With this set-up, your management team could align the KPIs of both teams around overall profitability, keep interdepartmental cooperation running smoothly, and easily find new opportunities for growth.

ROI Hunter can help you set up everything you need to achieve this alignment. We can even set up a visibility dashboard for free for eligible clients, through our partnership with Facebook. For more information, please contact us.

Find out how ROI Hunter can add value to your business.
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