The Latest in Retail Sourcing and Product Trends

It should be said that the best career analysts never die -- they just switch firms (and their research lives on in perpetuity). Such is the case of former Aberdeen -- and AMR -- analyst Paula Rosenblum who has the much deserved industry reputation as a top go-to-source for insight and analysis on retail technology and trends. Two years ago, when my consulting firm conducted an objective market research study and analysis of industry analyst firms for Aberdeen group -- I would caution everyone that the research information in the report is now dated -- Paula Rosenblum's name came up numerous times from practitioners and vendors as one of the reasons they respected Aberdeen so much at the time (that was also back in the Tim years).

Paula has now moved onto a new role as Senior Vice President at Retail Systems Alert Group, a research and advisory firm focused exclusively on the retail sector. Admittedly, Paula is a retail subject matter expert -- not a Spend Management one specifically. But you'd never know that reading her new report on sourcing and product trends in retail (free, but registration required). The report examined sourcing and product trends by looking at survey data from over 140 respondents. However, despite what some might term a "fact-based" approach -- my words, not Paula's -- the report succeeds not just for its research, but for the hard hitting analysis contained within.

Paula and I traded emails on the report and she mentioned that one of the most interesting nuggets that came out of her research is that "retailers with better sales (retail winners) more typically make their own trans-oceanic freight arrangements (a big thank you to Pierre Mitchell, who first made me aware of this, even anecdotally) ... In fact, thanks to Pierre in general, who taught me most everything I know on this subject, and to Tim Minahan, who taught me the rest." Clearly, Paula has learned from some of the masters in the space. But now she's coming up with her own insightful research.

Consider some of the following insights from the report. First, top performing retail organizations tend to sell a significantly higher percentage of private label merchandise. However, their overall gross margin is not declining, but increasing, as a result! I might add to Paula's analysis that a posterchild for this model is Target (who is famously tight-lipped about its Spend Management and merchandising strategies). Paula opined to me that this approach "means that retailers are actually getting over the 'markdown' drug. Gross margin improvements and an enhanced product mix are the byproduct of the move to private label or perhaps we can turn this around and say that a merchandise mix with a higher percentage of private label merchandise is a hallmark of retail winners."

I won't spoil the rest of the report. Without question, there are product development and Spend Management lessons in the study for companies across industries -- not just retail. Great work and insights, Paula.

Jason Busch

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