Hyperlocal Retailing: Shifting Focus to Customer Behavior-Based Hierarchies

Hyperlocal Retailing: Shifting Focus to Customer Behavior-Based Hierarchies

March 17, 2023 | By HIVERY

Retailers and CPG manufacturers are constantly searching for new ways to optimize their operations and better cater to their customers. One such approach gaining traction is the concept of Hyperlocal retailing, which leverages advanced AI technology and store-level data to deliver customer-centric assortments. According to a recent research report by Gartner (Retailers Must Drive Customer-Centric Merchandising With an AI Core, Robert Hetu), AI is a key enabler to help retailers to shift into merchandising processes that move away from the product and toward customer behavior hierarchies. Retailers need to transition from product-centric to customer behavior-centric hierarchies to discover better, more latent assortment strategies that genuinely impact how shoppers shop.

In this insight, we'll explore how harnessing behavior-based hierarchies, or "store-level data," is essential for assortment optimization and its transformative effect on the retail industry.

The Shift to Customer Behavior-Based Hierarchies

This shift requires AI technology to analyze individual shoppers at the store level. This allows us to discover new latent shopper behaviors that can inform demand prediction and optimize assortment, pricing, and space in a superior way at the store level or at any store cluster count required. By adopting this approach, retailers can achieve customer centricity and better cater to their customers' needs.

The Power of Algorithmic Retailing

Algorithmic retailing is the application of big data through advanced analytics to understand better and meet customer expectations in an increasingly complex and detailed multichannel retail environment.

Assortment Optimization with AI

Assortment optimization leverages AI to determine which items should be stocked, substituted, or deleted at each store and across channels to maximize sales, margin, inventory, and customer satisfaction goals. This optimization ensures that retailers present profitable and productive assortments that satisfy customers. Using data sources such as multichannel transactions, product attributes (e.g., SKU level), store attributes (i.e., fixtures), and third-party data service providers (i.e., Walmart's RetailLink, Nielsen, IRI), AI-driven solutions like HIVERY Curate can provide superior merchandise-aware recommendations that cater to each store's unique requirements.

The Concept of Hyperlocal Retailing

At HIVERY, we use big data combined with small data (store-level) to meet these expectations through what we call Hyperlocal retailing. By doing so, we're able to give everyday shoppers a data "voice power" to capture their preferences and make them visible to retailers, informing category and merchandising strategies.

We firmly believe in the power of hyperlocal retailing, which combines AI with store-level data to gain a deep understanding of each store's unique customers, needs, and preferences. Moving away from product-based hierarchies to customer-behavior-based hierarchies, we can tailor our clients' product offerings and space to cater to their specific requirements, regardless of their store-cluster count.


Hyperlocal retailing is a powerful approach that undercovers behavior-based hierarchies using store-level data with algorithmic analysis. It allows retailers and CPG manufacturers to optimize their assortments based on customer behavior, delivering a more personalized and satisfying shopping experience. By embracing this new way of thinking about assortment optimization, retailers can stay ahead of the competition and ensure long-term success in the ever-evolving retail landscape.

Ultimately, consumers vote in stores with their wallets. At HIVERY, we believe that leveraging data in the right way with AI models that understand rules and constraints is the future and that Data has a better idea™.

Talk to our expert, learn more, and request a demo of HIVERY Curate to discover how hyperlocal retailing can revolutionize your retail operations and help you better serve your customers. With the power of AI and store-level data, you can transform your assortment strategies and create a truly personalized and satisfying shopping experience for your customers, ensuring your long-term success in the competitive retail industry.

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