A new report by Boston Retail Partners examines how retailers allocate resources and how they can more effectively place the consumer at the center of the buying experience.
"The Annual Merchandise Planning & Allocation Benchmarking Survey" explores ways that retailers can create a more fluid shopping experience across channels. Boston Retail Partners argues that retailers should adopt software programs more sophisticated than spreadsheets to meet the complex demands of planning.
"One of the more surprising results was the relatively low adoption rates of leveraging social media in planning," said Robert Cuthbertson, senior manager at Boston Retail Partners.
"While sales results, supply chain management and trends will continue to primarily dictate the customer wants and needs, new avenues of gaining insights and understanding consumer behavior should not be ignored," he said.
"Understandably though, social media data mining is still in its relative infancy and, as result, retailers are likely to be cautious. However, there is a wealth of information readily available to help facilitate the process of understanding sales drivers and possible new products."
The report builds upon survey responses from more than 500 top North American retailers administered in September through October, 2013. A broad range of retailers from tier 1, 2 and 3 categories based on GDP revenue were surveyed, with more than half falling into the $500 million to $2.5 billion range.
Planning ahead
The report begins by breaking down the current state of planning. BRP found that retailers over-dedicate resources and time to merchandise planning, while under-dedicating resources to areas such as space planning and multichannel planning.
Fifty percent of respondents said that they use spreadsheets for assortment planning, and 31 percent use spreadsheets for merchandise planning. Although there are more sophisticated ways to facilitate planning, many respondents said that these programs proved challenging.
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Space planning was deemed to have the most onerous software programs. Boston Retail Partners believes that this is because of the intricacy of product information that changes frequently.
The report suggests adopting time-phased demand-planning tools for a smoother multichannel consumer experience.
Seventy percent of retailers expressed satisfaction with their allocations departments, which indicates that the unified commerce experience has a firm foundation.
Head-t0-head
Seventy-two percent of respondents said that they will expand omnichannel capabilities in the next one to two years to eliminate channel silos.
Following omnichannel, retailers said that they intend to focus on ecommerce, social media and social media analytics.
Forty-six percent of respondents claimed to have real-time inventory visibility across channels, while 50 percent said they have some. Retailers with spotty visibility will inevitably confront issues when trying to meet consumer demand.
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The next stage of unity concerns buying decisions. Boston Retail Partners explains that consolidating purchasing decisions improves the customer experience.
Social media continually acts as a crucible for the articulation of emerging trends and many retailers are beginning to use social media in their planning decisions.
The report concludes with a nuanced argument of the implications unified commerce has for the various kinds of retailers.
"Focusing planning on areas outside of merchandising can definitely have a dramatic impact on a retailer," Mr. Cuthbertson said. "Planning the details of the supply chain can help develop efficiencies that will improve speed to market with new styles and cost savings.
"Planning regional and store performance can minimize unnecessary markdowns and service the customer," he said.
"By including new advances in the realm of predictive analytics to help micro-merchandise to the location, retailers are making great strides in identifying and planning for products that are more relevant to their customers now than ever before."
Final Take
Joe McCarthy, editorial assistant on Luxury Daily, New York