DEFINITION of 'Scientific Retailing'
The use of technology by retailers in order to make decisions regarding product placement, selection and inventory levels. Scientific retailing typically involves the use of computers and software in order to track consumer purchases and reactions to different promotions and pricing. This type of retail strategy can lead to centralized operations, in which the home office makes decisions regarding store layout and products offered, to cede more control to individual stores in order to take advantage of local consumer behavior and demographics.
BREAKING DOWN 'Scientific Retailing'
Employing a scientific retailing strategy by a company replaces the more traditional "gut instinct" that used to direct decision making. For example, a nationwide clothing chain using scientific retailing may notice that consumers in one part of a city are purchasing t-shirts, while across the same town consumers are purchasing golf shirts. By analyzing data and allowing individual stores to promote what consumers are buying instead of forcing each store to sell prescribed items, the chain may see higher sales and more repeat customers.