The Wisdom of Crowds: Localization Roundup!

Judging from the great insights that flooded in on the heels of our Retail Wire discussion on Monday, retail localization is in its infancy.  In that piece we addressed the historical tension between centralized and localized buying, the perceived benefits of both strategies and recent attempts at localizing assortments through centralized buying structures.  Here are some highlights. (Warning, only major retail geeks should press on)!

Richard Seesel cautioned against returning to the days of yesteryear when it comes to localization, particularly considering today’s razor-slim margins (great call-out).  He also argued for retailers to rely more heavily on their vendors for localized data insights.

 David Zahn called out the need for collaboration between vendors and retailers and he said that “the best is yet to come” in localization.  I agree wholeheartedly!

 Paula Rosenblum stated that the apparel industry’s focus on Asian sourcing has shaved off cost; however, it’s also slows down reaction time. She also expressed doubts regarding  the impact of Macy’s My Macy’s localization initiative (a sentiment echoed in several emails that I’ve received since).

Shilpa Rao argued for a focus on trip segmentation, not just customer segmentation (and clearly retailers are trying to move in that direction with all of the talk about "missions," "occasions" and "life stages"!)

Bill Emerson praised Bed Bath and Beyond’s localization efforts and how the retailer has managed to execute localization by changing only 5% of its assortments and by featuring the variances prominently via end caps and feature areas.  Lee Peterson thinks that Forever 21's approach of placing small quantity buys and planning for quick turnover can have similarly beneficial results without taking buying down to the store level.

Don Delzell posited that it usually isn’t that much less efficient for vendors to make smaller quantities in order to accommodate localized assortments since efficiencies should have already been realized (the quantities would  have already been forecasted and priced accordingly).

Chris Ramey laid it on the line, implying that localization is essentially lip service from retailers since buyers are more invested in protecting their silos and floor space than executing localization (and therefore risking their real estate).

James Tenser statement that “average assortments yield average performance” to me sums up the pro-localization argument pretty succinctly!

Ted Hurlbut peeled the onion a bit . . . to him, localization remains more of qualitative pursuit and, since economies of scale are required in order to achieve competitive price points, and qualitative measurement happens with non-localized assortments, the jury is out on the benefits of localization (at least for the foreseeable future).

Thanks all for a lively discussion, pro and con!

Want to keep the conversation going?  Burning to weigh in?  Leave a comment!