The “good old days” of mom and pop retailing have faded to a pleasant, sepia-toned reminiscence. In that magical time, early in the last century, understanding customers’ needs seemed easy. Shop owner-operators knew their customers by name and their preferences by heart. Merchandising wasn’t very scientific, but it was personal and, in its way, intimate. The growth of mass markets led over time to industry consolidation and the emergence of truly national and global retailers. By the 1980s and 1990s we were experiencing an explosion of consumer product choices and media outlets. Retail chains grew larger and more operationally intricate, even as cable television and the Internet caused audiences to splinter. Retailers and manufacturers adapted by adding technologies to their arsenal. By the 1990s, retailers were hiring consultants to build econometric models representing consumer demand and provide advice on pricing, promotion and assortment to optimize their categories. By the turn of the century, these techniques were packaged into software tools designed to enable demand modeling, forecasting and optimization on a repeatable and scalable basis. Retailers reaped significant rewards from categorycentric merchandising optimization, with the ability to better meet consumer demand and achieve their business objectives.
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