Barbara Thau

Embattled retailers seem to be replacing flesh-and-blood merchants with data algorithms.

J.C. Penney just ousted its chief merchant John Tighe, and will instead “empower” Tighe’s once-direct reports with real-time customer data to make more “dynamic buying decisions,” said Marvin Ellison, the department store’s CEO, in a statement.

J.C. Penney’s elimination of the chief merchant role echoes Macy’s move in August to cut its buying staff, while investing in data analytics.

The chief merchant has long played a critical role in retailers’ ranks, overseeing the thousands of products that are featured in the nation’s big chains. But as retailers struggle to boost sales and profits amid weak shopper traffic, they’re increasingly looking to data analytics to solve a range of chronic woes, from out of stock shelves to inventory that doesn’t sell.

Taking a page from e-commerce merchants (most profoundly Amazon, whose proprietary algorithms are unrivaled), retailers are looking to monetize the mounds of data generated in recent years from shoppers’ digital and physical footsteps, such as loyalty card purchases, e-commerce buys and social media chatter. They’re tapping technology tools that are now available to analyze that data, as well as “born-in-the-web” practices, while plucking talent from digital businesses.

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