Last week, we issued the Q1 2017 installment of our quarterly newsletter, InDemand, which highlights new thought leadership, articles about customer successes and key developments impacting the retail industry. In case you missed it, below is a brief recap of what was included in this latest issue:
- New Thought Leadership: How to Improve In-Season Planning
Despite efforts by retailers to build and execute bulletproof pre-season merchandise plans, the market is variable and customers are fickle. In a new JustEnough byline, we discuss how exception management, supported by a variety of business intelligence tools and reporting mechanisms, can help organizations better navigate and react to variances in the plan. Read more here.
- New Customer: Cole Haan
Cole Haan has 120 stores in the U.S. and another 80 in Japan that are serviced by a newly established global Planning & Allocation department. Cole Haan sought more modern solutions to support its planning team and take the place of a failed planning system that forced the company to revert back to the use Excel. Cole Haan selected JustEnough Allocation and Merchandise Financial Planning for their ease of use and advanced functionality. Solution design is currently underway for Allocation, which expected to go live before the 2017 holiday season. The Merchandise Financial Planning deployment is slated for late 2017. Capgemini, a JustEnough partner, will perform the implementations.
- Implementation Success: Tommy Bahama
Tommy Bahama selected JustEnough Merchandise Financial Planning, Allocation and Assortment Planning for their ability to manage by exception, leverage inventory throughout the supply chain, as well as deliver planning and process consistency across all product divisions and channels. Tommy Bahama embarked on a phased solution rollout with JustEnough, beginning with Merchandise Financial Planning on a cloud-based model. The JustEnough team worked closely with the retailer on solution design and an implementation timeline. After a smooth, non-disruptive and on-time installation, Tommy Bahama went live with the solution in early March 2017.
- JustEnough In The News: The Record
The winter 2016 issue of The Record, the best of enterprise technology on the Microsoft platform, featured a JustEnough byline on creating customer-centric assortments, as well as a sidebar highlighting the success outdoor retailer Katmandu has realized using JustEnough technology to support its 160 brick-and-mortar stores and e-commerce business. Access the winter 2016 issue of The Record here.
- Research Reports
InDemand featured two new JustEnough-sponsored research report, including RIS News’ “Retail IQ: Driving Revenue and Increased Engagement With Advanced Promotions Management” report, which featured a Q&A with JustEnough’s Dan Pahomi on page 6; and Boston Retail Partners’ “2016 Merchandise Planning Benchmark Survey,” an annual survey that explores the current state of retail planning. View these reports, as well as access other JustEnough-sponsored research, here.
- Industry Recognition: Supply & Demand Chain Executive’s 2017 Pros to Know
Keith Whaley, JustEnough’s Vice President of Retail Strategy, was named in Supply & Demand Chain Executive’s prestigious 2017 Provider Pros to Know list. Keith was selected from a pool of more than 300 applicants for his expertise in supporting omni-channel inventory planning and management across multi-tiered supply chains at some of the world’s biggest brands that leverage JustEnough. Read the press release here, and be sure to check out Keith’s blog post.
Click here to access the Q1 2017 issue of InDemand. Previous editions can be found here. Contact us today to learn more about JustEnough’s integrated, end-to-end suite of planning solutions support many of the world’s leading retailers.
Unified commerce is a concept on the mind of most of today’s retail executives. It’s a step beyond omni-channel, endeavoring to serve consumers when, where and however they prefer to make a purchase by taking systems once siloed based on different channels and merging them onto a single data set.
According to a recent IHL study published in RIS News, 86% of software spending in retail organizations is going toward the five pillars of unified commerce: store systems, merchandising/supply chain, business intelligence/analytics, sales and marketing, and e-commerce systems. Advanced organizations understand these functions must be aligned to compete in today’s dynamic and swiftly changing retail environment.
Over the next few weeks, we’ll dive deeper into the findings of the 2017 Unified Commerce Landscape report, which correlated sales growth against 15 various commerce strategies being used by more than 90 retailers across the U.S. and U.K. When asked about their priorities, the research found that retailers of all levels of success are focusing on three key areas in 2017: improving customer loyalty, creating a seamless shopping experience and creating a “wow” experience at the store.
The key difference between retailers that demonstrated strong sales growth and those that didn’t is the balance between those three above-mentioned priorities. Retail “winners,” as the report describes them, are thinking about these areas simultaneously and in a more balanced way. IT spend is another indication – retailers that are willing to make investments in systems to improve the overall customer experience tend to be those that are on the more successful end of the spectrum. Among general merchandise retailers, there is another area of consideration this year: providing actionable analytics to store associates to help them make better decisions at the point of customer interaction.
If we look closer at the impact IT spend has on sales growth, the report indicated that retail winners across all segments spent nearly 70% more on IT as a percentage of revenue in 2016 compared to their less-successful counterparts. IHL also pointed to differences when it comes to planning for budget growth: retail winners across all segments are increasing their total IT spend at a rate of 87% faster than the laggards. Among food, drug, convenience and mass merchant retailers, that figure jumps to a whopping 107%. Finally, retail winners across all segments are hiking up their store-level IT spend at a rate of 133% faster than the laggards.
Next time, we’ll explore the systems that constitute the building blocks of unified commerce. In the meantime, read the full report here, and contact JustEnough today to learn more about our integrated, end-to-end suite of planning solutions support many of the world’s leading retailers.
Consumers are more empowered than ever to find exactly what they want, when they want it – all of which can wreak havoc on the bottom line if an organization isn’t prepared to make in-season planning adjustments.
Exception management, supported by a variety of business intelligence tools and reporting mechanisms, allows retailers to better navigate and react to variances in the plan. It is becoming highly sophisticated as businesses gain greater access to modern planning technologies and ever-more granular information about their customers’ lifestyles, buying behaviors and product preferences at the location level.
In a recent article, I discussed six strategies to help retailers better manage variances in their plan throughout a season and therefore avoid the costly pitfalls of having too much or too little stock on hand. Below is a summary of these six points:
- Holding inventory back. Retailers can circumvent variances in the plan by holding back a percentage of inventory in the DC from the start, while pushing the rest out to their stores and online channels.
- Prepacking. Store-level forecasts have an important role to play when optimizing prepack purchases. Of equal importance is determining the correct balance of prepacked and “loose” units in each planned receipt – the right combination offers greater flexibility when filling in missing sizes, colors, etc. as needed.
- Regular replenishment maintenance. Regular review of stock position for top-selling items throughout the season is crucial. In scenarios where stock outages are likely – or even unavoidable – retailers can strategically limit replenishment to protect stores with the greatest selling potential.
- Store-to-store transfers. Store-to-store transfers can be a very effective means of rebalancing inventory to meet shifting trends for items with sufficient profit margin. The key to this approach is weighing the proximity of stores with need against additional freight costs.
- Expanding product footprint. If slow-selling inventory, retailers may consider expanding the item’s footprint into locations that initially seemed to have less selling potential. Effectively doing so requires a thorough review of sales data, as well as customer insights, social media feeds and feedback from store managers to determine where inventory is most likely to drive up sales and profits.
- Vendor push/pull tactics. Businesses that realize a particular item is not selling fast enough and will result in markdowns at the end of the season may be able to partner with vendors to hold or even cancel subsequent deliveries at their facilities versus shipping as originally planned. Conversely, if demand for a particular item is higher than anticipated, retailers that identify this issue early on may want to consider changing the method of delivery or requesting an earlier ship date.
Technology is the underpinning to an advanced workflow that alerts retailers as soon as possible to exceptions in their merchandise plan. Read the full article here, and find out how JustEnough’s demand-driven suite of solutions offer the flexibility required to make in-season planning adjustments.
Earlier this week, I was honored to be named to Supply & Demand Chain Executives’ 2017 Provider Pros to Know list. This annual awards program recognizes individuals from software firms and providers, consultancies or academia who have helped their supply chain clients or the supply chain community at large overcome significant business challenges.
Supply & Demand Chain Executive asked each nominee about the key challenges facing their customers and their supply chains in the year ahead – and how we are working to address them. In this week’s blog post, I thought I would share my response to this question by exploring several pain points many retailers are facing:
- The ability to capture accurate POS data by channel. Retailers now offer their customers many POS options. It’s critical they capture accurate information regarding where sales are made and where demand is fulfilled in order to optimally position inventory in the future.
- Gaining real-time inventory visibility from the purchase order to the DC to each individual selling channel. Moving from channel-specific inventory to shared inventory across channels enables retailers to react to variability in regards to where demand is coming from. However, it requires complete visibility into inventory at every level of the supply chain in order to efficiently fulfill demand.
- Adapting to a shift in modeling. Traditionally, modelling has focused on structured product and location hierarchies. But, it’s beginning to shift toward a focus on customer-preferences and product attributes. This calls for the capture of very granular, non-hierarchical data points – which must be available to the merchandise planning team in a way that is consumable.
- Creating a flexible supply chain configuration. Supply chains typically have been linear and fairly straightforward to set up. Nowadays, they must be nimble and provide a way for inventory to move forward, backward and sideways to be properly positioned. Configuring modern supply chains requires the use of complex rules that enable inventory to flow faster through them. Retailers can no longer wait for inventory to arrive at their DCs before being dispersed to stores – they need the ability to pre-allocate inventory from the point of purchase orders in order to reduce lead time. Cross-docking and pre-packs are additional techniques that retailers can use to facilitate supply chain time compression.
- Better anticipating demand. Today’s retailers must do more than simply monitoring demand and buying and pushing out inventory. Competing in today’s dynamic business environment requires insight into near-future demand, which drives multi-channel inventory execution to meet planned demand. Consuming information regarding customer shopping preference and buying behavior helps to better anticipate demand and supports the ability to project the movement of inventory to the appropriate channels.
To address these challenges, the JustEnough team and I work directly with our retail customers to understand how to best implement our fully integrated, end-to-end suite of omni-channel demand management solutions, as well as integrate with their existing systems. Our solutions are designed to make it easier for users to position their systems and processes to handle a flexible supply chain configuration.
Read our press release here, as well as the full list of Supply & Demand Chain Executive 2017 Provider Pros to Know here. Contact us today to learn how some of the world’s leading brands leverage JustEnough to streamline their business processes, make better decisions and achieve results that have a positive impact on the bottom line.
Retailers are using promotions in increasingly creative ways to drive purchases and encourage repeat traffic without eroding profits and margins. In a recent JustEnough-sponsored report by RIS News called Retail IQ: Driving Revenue and Increased Engagement With Advanced Promotions Management, findings show that retailers must consider the price, timing, consumer target, merchandising strategy and store location when staging promotions. Technology can help: promotions management software and analytics tools provide better insights by cross-referencing historic, demographic and other data across multiple sources.
The report acknowledges that retailers are taking advantage of wider availability of better, more accurate and affordable data. Nowadays, retailers of any size can gather a lot of information about their customers online with very little effort. Such data can be fed into modern optimization tools, which project how much lift a promotion will provide to entice shoppers without destroying margins.
I answered a couple of questions for this RIS News report regarding centralized promotions management. Traditionally, promotions were planned by different teams depending on the channel, which could result in conflicting messages for the consumer and subpar campaign outcomes. Retailers are realizing the need to centralize these activities across channels, geographies and internal departments. That’s where a centralized promotion planning and execution system supported by a dedicated, best-in-class solution comes into play. Although many retailers want to adopt a centralized promotions management approach, they are attempting to do so using Excel, merchandising, pricing and ERP systems – which often lack in sophistication and the ability to capture the level of detail needed to optimize promotions.
Additionally, a better promotions management process is required; automation alone will only allow retailers to be inefficient faster. What’s needed is a process that allows retailers to get to market faster and eliminates any barriers along the way. Once that happens, retailers can start generating more targeted and relevant promotions that result in more accurate data to analyze, which can be difficult to do when data is gathered from disparate sources.
I also talked a bit about how some retailers are eliminating loyalty card programs in favor of other tools for customer data collection. This is because as loyalty programs expanded, their use has become limited and they no longer are a point of competitive differentiation for retailers. Beyond such programs, there are multiple ways of collecting customer data. In fact, most retailers leverage more than one method, which include virtual loyalty cards using credit card data, email sign ups, mobile app downloads and social media.
Finally, I answered a question about using Facebook for promotions. While the prospect of targeting promotions down to the individual customer level via Facebook was initially met with a lot of excitement, it proved to be too much work without much ROI. The social media platform is an excellent way to engage a large audience and drive brand awareness, but it falls short when it comes to individual promotional campaigns.
To read the full report, click here. Contact us today to learn how the JustEnough Promotions Management solution makes it easy to plan multi-channel promotions that drive sales and improve margins.
What does the future hold for retailers looking to improve omni-channel inventory planning? In this final installment of a series of blog posts that highlighted findings from the JustEnough-sponsored
2016 Merchandise Planning Benchmark Survey,
we’ll dive into the three key areas retailers are turning their attention to: store clustering, dynamic re-allocation and customer-optimized inventory. Before doing so, we should state that retailers in today’s push for a “channel-less” world are seeking ways to better integrate data into their merchandise-planning processes, data analytics increasingly challenging as the number of sources of customer information grows.
- Store Clustering:Understanding and managing demand is no easy feat when the customer journey crosses channels. However, retailers can improve forecast accuracy and assortments by leveraging tools that help identify patterns and cluster stores based on key attributes like geography, climate and size demographics. According to the survey, only 24% of retailers are doing this today, but that figure will jump to 74% over the next five years.
- Dynamic Re-Allocation:Although an integrated cross-channel merchandise-planning process lowers the effects of misallocating product, moving inventory across channels or between stores is still a costly endeavor. But a modern dynamic re-allocation approach involves enterprise-wide visibility and accessibility, which provide retailers with the information they need to re-allocate inventory where it is most likely to sell. Although only 15% of retailers are applying such re-allocation techniques, 66% plan to do so within five years.
- Customer-Optimized Inventory:A combination of customer demand and forecast data, CRM and transaction history can help retailers anticipate where customers will most likely purchase inventory. Integrating customers’ history into the planning process helps retailers satisfy shopper needs while forming a deeper relationship with them. The survey tells us that only 9% of retailers are currently practicing customer-optimized inventory strategies; however, 75% of retailers plan to do so over the next five years.
One area that is still under evaluation when it comes to unified commerce environment is social media-based planning. While social platforms are undeniably excellent listening tools, there is still some uncertainly as to how it fits into a retailer’s business model. One significant challenge is how to effectively quantify social media data to inform product decisions – i.e., how does a “like” or comment translate into anticipated sales? The survey indicates that only 6% of retailers today are leveraging social media in the planning process, and roughly half are looking to leverage it within the next five years.
In conclusion, the 2016 Merchandise Planning Benchmark Survey shows that most retailers are still struggling to optimize their omni-channel planning strategies. Be sure to check out the full report here, and contact JustEnough today to learn how we our end-to-end suite of omni-channel demand management solutions support some of today’s most premier retailers.
Creating an omni-channel inventory strategy gives retailers an opportunity to tear down organizational silos and leverage synergies across the business. In my last post, we looked at ways retailers can overcome obstacles standing in the way of optimized merchandise-planning effectiveness, which comes down to two key challenges according to the JustEnough-sponsored 2016 Merchandise Planning Benchmark Survey: the need for advanced analytics and reducing technology constraints.
Today, we’ll take a closer look integration issues standing in the way of retailers that want to adopt an omni-channel inventory strategy approach. With technology now doing much of the heavy lifting in many capacities, retailers may need to eliminate redundant roles and functions by consolidating disparate groups into a single unified team. Specifically, the integration of planning systems across channels gives planners better visibility and insights that can translate into better recommendations with respect to price, promotion and inventory. But according to the survey, many organizations struggle from a cultural standpoint: it can be difficult to get internal stakeholders to consider the enterprise as a whole, versus the needs of individual teams or departments. In fact, most retailers that have taken steps to integrate their planning processes, organizations and systems indicate there is room for improvement.
While more retailers have implemented these initiatives compared to last year, the areas that need improvement have increased at a higher rate – i.e., better cross-channel integration of assortment plans and merchandise financial plans. This is likely because many businesses simply take a “just get something done” approach instead of considering the impact on the culture and all of the processes that need to evolve.
Part of breaking down planning silos includes disrupting the traditional alignment of planning teams. Historically, such teams have aligned around product categories by channel. However, this does not work with the omni-channel model of retail in which sales are planned across the enterprise. In order to achieve the synergies of omni-channel retail, planning teams must be re-aligned and in some cases consolidated to create a more proactive and nimble organization.
Next week, we’ll talk more about what the future holds for retailers that are focused on improving omni-channel planning. The Boston Retail Partners survey can be found here. Contact JustEnough today to learn more about our end-to-end suite of omni-channel demand management solutions.
In my last post, I highlighted findings from a section within Boston Retail Partner's 2016 Merchandise Planning Benchmark Survey that looked at what retailers are doing today to manage their omni-channel planning needs. The JustEnough Software-sponsored research revealed that retailers still predominantly plan selling channels separately, most recognize the opportunity for better cross-channel integration.
In today's post, we'll take a closer look at a section of the survey that analyzes what retailers can do to overcome obstacles standing in the way of optimized merchandise-planning effectiveness. It basically comes down to two key challenges: the need for advanced analytics and overcoming technology constraints.
In regards to advanced analytics, 44% of retailers said this continues to be a top planning priority. They understand that having visibility into the finer details of their business is crucial in their quest to satisfy customer demand, fulfill inventory and maximize revenue, and that analytics around sales performance by channel, by assortment and even down to the item level will facilitate more accurate planning and allocation decisions. However, the survey found that half of retailers currently leverage advanced analytics in merchandise planning, while a mere 12% use it for omni-channel planning.
Despite access to readily available data that could reveal much about customer preferences, future demand, reaction to promotions and the like, retailers often struggle to interpret and utilize analytics. The survey suggests that the ability to use data to improve business performance suffers due to a lack of cross-organizational alignment and inconsistent processes, which retailers must address in order to create a unified commerce environment.
As noted at the start of this post, technology continues to be a hindrance for many retailers. Specifically, 21% of survey respondents cite disparate systems and process challenges, respectively, as their top obstacles. Solutions that address customer touch points typically get more attention because of the perceived immediate impact they’ll have; as such, it can be difficult to find the budget needed for back-end planning solutions. And, reengineering processes and getting internal buy-in required to support new system capabilities is a major undertaking. Regardless, the majority are not satisfied with their existing applications and plan to undergo upgrades and replacements over the next two years.
Although retailers realize there are huge gains to be made to improve their omni-channel planning environment, the survey indicates that fully integrated solutions have yet to make their way into the systems landscape at most organizations. Technology that allows for unified management of transactions across all channels will become more and more critical for retailers in the years ahead.
In next week’s blog post, we’ll talk more in-depth about the integration issues retailers are dealing with as it relates to pursuing an omni-channel inventory strategy. The Boston Retail Partners survey can be found here, and be sure to contact JustEnough today to learn more about our end-to-end suite of omni-channel demand management solutions.
Last week, we introduced findings from Boston Retail Partners’ 2016 Merchandise Planning Benchmark Survey, which ultimately found that planning teams within retail organizations are not prepared for unified commerce. In fact, the JustEnough-sponsored report, the research pointed out that a high majority (71%) of retailers have yet to create a formal omni-channel demand planning process. And, while 44% have integrated planning teams, 88% of those retailers indicated their teams could use improvement.
In this post, we’ll dive deeper into a section of the report that analyzes what retailers are doing today to manage their omni-channel merchandise planning needs. In terms of the formal planning processes retailers employ, the Boston Retail Partners survey concluding that advanced planning tools have enabled a better omni-channel retail model. Nearly 91% of retailers have a formalized merchandise planning process, and over half have formalized their store planning and allocation processes.
Yet, retailers still by and large plan selling channels separately, maintaining individual assortments and inventories for each. Regardless, most organizations recognize the opportunity for better cross-channel integration: while last year’s survey showed that 60% of respondents still planned their brick-and-mortar locations separately from other channels, that figure has decreased to 38% this year. Additionally, just 15% of retailers said they plan for e-commerce individually this year, versus 49% in 2015.
The report also found that cross-channel assortments remains an area of focus for most retailers. Less than one-fifth (18%) offer the same assortment across channels – despite universal acceptance that inventory availability across all channels is key to providing a truly unified shopping experience.
In regards to cross-channel inventory management, retailers are making progress: In 2014, 69% maintained separate inventories across channels, but by 2015 that figure had dropped to less than half (49%). In 2016, that figure has dropped even lower to 29%.
The use of advanced technology to facilitate better omni-channel retail planning continues to be a challenge, however. Spreadsheets remain in use, with 41% of retailers relying on them for store planning, 27% for assortment planning and localization and 26% for space planning – despite the fact that many retailers believe their planning solutions to be lacking in effectiveness and admit greater satisfaction with vendor or homegrown tools.
In next week’s blog post, we’ll talk more in-depth about the obstacles retailers are facing when it comes to creating an optimized omni-channel environment. In the meantime, the full set of Boston Retail Partners survey findings can be found here. Contact JustEnough today to learn more about how our innovative, end-to-end suite of omni-channel demand management solutions support many of the world’s most premier companies.
Despite ongoing efforts to create a seamless omni-channel environment, retailers’ planning organizations are not wholly ready for unified commerce, according to Boston Retail Partners’ 2016 Merchandise Planning Benchmark Survey.
Sponsored by JustEnough Software, the annual survey explores the current state of retail planning, identifying and analyzing retailers’ priorities for the coming year. It comes as no surprise that today’s retailers struggle with a host of business and IT issues as they strive for an efficient, successful omni-channel environment. Customers are increasingly demanding, armed with the ability to shop whenever, wherever and however they want with high expectations that what they are looking for will be available for the right price the moment they are ready to make a purchase.
Over the next couple of weeks, we’ll dive deeper in the survey findings, but below are the three most-commonly cited omni-channel planning challenges:
- The retailer’s organizational structure is not set up to support an omni-channel environment.
- Planning applications are ineffective and not integrated.
- The organization is ill-equipped to analyze the high volume of data required to optimize planning decision.
In fact, the research shows that 71% of retailers have yet to create a formal omni-channel demand planning process. Additionally, 38% of respondents plan brick-and-mortar as an individual channel, and while 44% have integrated planning teams, 88% of those retailers indicated they could use improvement.
When asked how to overcome the obstacles, just shy of half (44%) said improving analytics is a top priority. Twenty-one percent said disparate systems and process challenges are the biggest obstacles, and 41% are looking to upgrade their omni-channel demand planning systems within two years.
Finally, when asked about integration issues, while 63% of retailers have integrated their planning organizations across channels, three-quarters said they have work to do in that arena. Seventy percent said they have integrated planning business processes across channels in place, but of those 83% need improvement. Finally, just over half (53%) have integrated planning systems across channels, but 77% said they could be better.
Keep an eye out for next week’s blog post for a closer look at what retailers are doing today to manage customer expectations across all selling channels, according to the survey data. To access the Boston Retail Partners research, click here and be sure to contact JustEnough today to learn more about our fully integrated, end-to-end suite of omni-channel demand management solutions.