We're glad February is a short month. Too much snow, too few selling days, and an unexpected run on duct tape. So let's look ahead to March: melting snow, more selling days, and the arrival of basketball's NCAA March Madness tournament. That got us thinking . . . maybe retailers should dedicate the month of March to Merchandising Madness -- a time for CEOs, GMMs, and CIOs to exploit technologies that can improve merchandising strategies and gross margins. Forrester's research into this topic yields three margin-boosting ideas:

1) Mass customization. Our recent consumer data sends a very loud and surprising signal: More than 10 million people have already purchased a product that they customized online, and millions more say they want to design and purchase products like PCs, apparel, greeting cards, cars, jewelry, and even footwear online.

Brand innovators like Lands' End, Dell, Nike, and BMW are already tapping into this rich vein. Other retailers must ask: Do any of my product lines lend themselves to feature or fit customization? If so, assign some merchandisers and marketers to study the opportunity and use your Web site to gauge -- and then cash in on -- demand. And look to vendors like Archetype Solutions, Selectica, and Trilogy for the technology to make customization a reality.

2) Merchandise optimization. In an economy where price is too often king, who wouldn't like to see a 5% to 10% gross margin improvement? Now's the time to test merchandise optimization software from companies like ProfitLogic, i2 Technologies, and Manugistics. Retailers that embark on this path should expect internal resistance and vendor growing pains, but the upside -- as seen in the positive financials of J.C. Penney, Saks, and ShopKo -- provides all the argument you need to get started.

3) RFID. It's 11 p.m. Do you know where your merchandise is? As retailers large and small struggle to track goods through the supply chain, 2003 is the year leaders like Wal-Mart and Gap will move beyond pilots and start to deploy RFID to tighten up their supply chains. But as with any new technology, there's a hefty cost associated with installing systems, and the ROI is a ballpark figure. So what should retailers do? How do they deal with things like privacy, managing the flood of data generated by RFID, and picking the right standards? Get started by reading "Retailers' Top Five Questions About RFID," and put this emerging technology on your agenda for March Merchandising Madness.

So that's your March retail technology game plan. Let me know how it goes by writing to me at katedelhagen@forrester.com.


Kate Delhagen
Retail & CPG Research Director

P.S. Mark your calendars! Our annual Consumer Forum -- Creating A World-Class Multichannel Experience -- is set for September 21-23 in New York, N.Y.