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Caroline Proctor

  28 Apr 2015 • By Caroline Proctor in Opinions

  

The Final Installment in Our Merchandise Planning and Allocation Series

This is the final article in our series based on a research report JustEnough recently sponsored with Boston Retail Partners into the current state of the industry around Merchandise Planning and Allocation. In this article we’ll review the conclusions and key takeaways from the study.

Here is the final installment:

The 2014 Merchandise Planning & Allocation Benchmark Survey confirms that retailers understand the necessity of a unified commerce model, and are working to improve planning processes to support this retail environment. The data also reveals that a majority of retailers recognize the importance of standardized planning, and thus have introduced formal processes within their organizations.

Progress towards unified processes

  • 69% are planning to expand their unified commerce capabilities within three years
  • More than 45% have integrated business processes and systems across channels
  • 26% offer real-time visibility across channels with another 65% offering “some” visibility of in-store/online inventory

However, many have yet to implement the measures necessary to support the demands of a unified approach across all channels. Key best practices are showing a lack of process alignment to support unified commerce initiatives, which present several opportunities for improvement.

Unified process opportunities

  • 69% of retailers still maintain separate inventory across channels
  • Only 8% have a working cross-channel forecasting method
  • 46% have no plans to offer the ability for a store transfer where the customer orders an item in store A and store B ships the order to store A where the customer picks up the order

One of the most encouraging developments within the last 12 months is the increased focus on incorporating social media data, including customer preferences, affinities and trends, within the merchandise planning processes.

Social media analytics progress

  • 39% use social media to facilitate planning within product development, up from 6% last year
  • More than 50% plan to expand their social media analytics capabilities within three years

In addition, while assortment accuracy is cited as a top priority, there are opportunities within business intelligence that are currently being overlooked when planning and allocating inventory.

Opportunities within data analysis

  • Only 33% currently utilize CRM data to feed business intelligence tools
  • 41% do not capture customer feedback from social media
  • 73% have only basic analytical and reporting capabilities

Consumers expect a fast and efficient selling and delivery process, where the physical and digital selling channels converge to provide a cohesive shopping experience. These unified commerce shopping concepts continue to grow significantly, requiring retailers to put more functional capabilities in place than ever before. With a multitude of emerging tools and techniques available to support and expand business, it is an exciting time to be a retailer.


Caroline Proctor

  23 Apr 2015 • By Caroline Proctor in Industry News

  

Loyalty Programs Failing Consumers, Capgemini Finds

Apparel Magazine recently published an interesting article about Capgemini's findings from a global report on loyalty programs in the digital age. Capgemini is a JustEnough partner and the article features Sephora, a JustEnough customer. Contact us to learn more about how JustEnough can leverage customer loyalty information to improve product assortments, allocation and promotional planning and execution.

A global report "Fixing the Cracks: Reinventing Loyalty Programs for the Digital Age" by Capgemini Consulting reveals that loyalty programs have not evolved with the digital age and are failing to engage consumers. The report lifts the lid on why active participation rates in loyalty programs are often low and why 89 percent of social media opinions on loyalty programs are negative.

Capgemini researched the loyalty programs of 160 global companies across 7 sectors including Retail, Banking, Consumer Products, Telecom, Airlines, Hotel Chains and Consumer Electronics. In addition, Capgemini also conducted a scan of 40,000 consumer conversations on social media to gauge customer sentiment towards loyalty programs.

The research revealed that most loyalty programs follow a basic transactional philosophy where rewards are based on purchase. Only a small minority of programs recognize and reward consumers for engaging and interacting with the brand in other meaningful ways. Furthermore, most loyalty programs lack personalization and fail to offer cross-channel redemption services.  The negative social media sentiment on loyalty programs stemmed mainly from the lack of reward relevance, rigid reward structures, user experience issues with online channels, and poor customer service quality levels.

Key findings of the study reveal that loyalty programs are not evolving at the same pace as the digital age:

  • Just 11 percent of loyalty programs offer personalized rewards based on a customer's purchase history or location data
  • 79 percent of loyalty programs use the mobile channel, and yet only 24 percent allow redemption through it
  • 97 percent of loyalty programs are based primarily on purchases made by consumers
  • Only 16 percent of loyalty programs reward customers for activities such as taking online surveys, rating and reviewing establishments or referring friends to the program. Only 14 percent employ gamification mechanisms to reward customers.

Loyalty programs need to focus on driving customer engagement

The report recommends that loyalty programs be seen within the larger context of a marketing strategy that is focused on driving customer engagement. Organizations need to look at each step of the loyalty program, from design to evolution, through the prism of engagement.

Mark Taylor, global lead for customer experience transformation at Capgemini Consulting said, "Brands need to revisit their approach to loyalty. For us, the key is to integrate the loyalty program into the overarching customer experience and to reward engagement as well as the simple transaction. Additionally, since relevance is the highest form of customer intimacy, offering advanced levels of customization and tailored experiences will enrich loyalty programs and further encourage customer engagement."

According to the research, fewer than one in ten loyalty programs (9 percent) offer point redemption across all channels. To be commercially successful, programs must engage customers across every customer touch point.

Seamless purchase experience at Sephora

The study cites Sephora's "Beauty Insider" loyalty program which matches loyalty accounts with Sephora's mobile app, as well as the Apple Passbook mobile wallet. This allows Sephora to provide a seamless purchase experience, where customers can track their purchases, view offers, and redeem reward points on the go via their mobile devices. The strategy has worked, with Sephora's Passbook users purchasing twice as much and twice as frequently as the average Sephora customer.

To deploy successful, customer-engagement focused loyalty programs, Capgemini believes the following strategies should be employed: 

  • Integrate loyalty programs with the overall customer experience
  • Deliver personalized customer experiences
  • Conduct "Social Listening" to understand customer needs
  • Reward members for social media engagement and advocacy
  • Use gamification techniques to drive deeper participation
  • Provide value beyond traditional rewards

Caroline Proctor

  23 Apr 2015 • By Caroline Proctor in Industry News

  

Online Retailers Opening Storefronts Shows New Cycle In Retail

Integrated Solutions for Retailers recently published this interesting article about how online retailers are realizing the benefits of having a brick and mortar presence and that the number of online retailers rushing to establish a physical presence in a storefront is growing. With a physical storefront, online retailers are exposed to a new audience that may not be aware of their online presence, and also provides a more hands-on experience, since customers can touch and try on products, or receive an in-store demonstration of their features.

Check out the full article.

In February 2014, Forbes ran a piece entitled “Year of Reckoning for Brick and Mortar Retailers” about the shift in the shopping mentality of the American consumer. For years, Forbes said, it was as simple as establishing a storefront near housing developments or establishing properties. In these central locations, retailers would flourish, particularly with the popularity of the shopping mall. The retail landscape has changed significantly in the last twenty years as technology has advanced in all facets of a consumer's life. In the 1980's, the shopping mall was more than a retail destination, it was a hub of an individual's social and community experience. With the invention of the internet, shopping started slowly shifting online, and existed beyond the microcosm of the mall or strip mall. 1994 saw the arrival of Amazon and in 1995, auction retailer eBay. Seeing the rising popularity on online shopping, and wanting to keep their existing customer base meant brick and mortar retailers needed to rethink their marketing process and get digital. Retail analysts seeing the changing tide in consumer behavior declared online shopping was the future. Now in 2015, retailing has reached a new point, however, where retailers that once existed solely online are moving into a brick and mortar model.

The online shopping experience offers benefits to both consumers and retailers. Retailers are able to market via email and other digital channels, maintain a large inventory, and aren't hampered by a commercial real estate market for choosing a viable storefront with a good walk score and centrally located to their target consumer. Customers are able to enjoy a streamlined shopping experience with one click, without needing to visit a store in inclement weather or during a busy week. Online shopping also allows purchases to be delivered right to a consumer's door for free or a nominal fee. Online retailers have also seen the benefits of having a brick and mortar presence though, and the number of online retailers rushing to establish a physical presence in a storefront is growing. With a physical storefront, online retailers are exposed to a new audience that may not be aware of their online presence, and also offer a more hands-on experience, since customers can touch and try on products, or receive an in-store demonstration of their features.

Prescription eyewear and sunglasses retailer Warby Parker was founded in 2010, and five years later the company has four retail stores and eight showrooms. The company is currently looking into building its own POS (Point of Sale) system, and will open its first Miami, Florida store this month. Speaking to INC upon opening their flagship store in New York City, founder Neil Blumenthal says, “We believe the future of retail is at the intersection of e-commerce and bricks-and-mortar.” He also cited Warby Parker's famous “try on at home” offer as one reason they went retail, saying that customers would ask to come try on glasses at Warby Parker's headquarters, which at that time was a city apartment. The retailer then offered pop-up stores and a showroom, before finally offering a flagship store. Warby Parker is a prime example of the benefits of a brick and mortar approach for retailers.

Subscription box company BirchBox opened their first retail location in Manhattan not far from Warby Parker's, letting customers put together custom boxes of beauty samples, browse of all BirchBox's offerings, and receive personalized recommendations. BaubleBar, an online jewelry retailer, has been open for only three years, but is now experimenting with a pop-up shop in Manhattan as well, in a move a Business Insider writer called a retail store “women desperately need,” because the retailer offers fashionable yet affordable jewelery to women age 20 and up. Even Amazon isn't shying away from the trend, and instead opened its first brick-and-mortar store at Purdue University in February. The campus store lets college students order rented textbooks then pick them up in-store, and also serves as a pick-up/drop-off location for returns and orders. Amazon is still exploring new retail location options as well, showing that while online shopping was once the wave of the future, the focus has shifted to be both online and offline for retailers who want to maximize their profits and reach, as well as offer consumer service.


Caroline Proctor

  21 Apr 2015 • By Caroline Proctor in Opinions

  

Unified Commerce Demands the Right Tools

This is the fifth article in our series based on a research report JustEnough recently sponsored with Boston Retail Partners into the current state of the industry around Merchandise Planning and Allocation. In this article we’ll delve into the technologies needed to enable unified commerce.

Here is part five:

A combination of appropriate tools and systems are necessary to fully support the unified commerce model. Absent the right technology, unified commerce strategies lack teeth and fail to achieve maximum efficiency and benefit for retailers. Best practices dictate employment of a full suite of merchandise planning, assortment planning, and store allocation systems working in conjunction with each other. This year’s survey results reveal that while there is movement in the right direction, there is still significant opportunity for retailers to evolve from a technological perspective.

Fully integrated solutions have not gained vast acceptance into the systems landscape at most retail organizations. Surprisingly, 38% of participating retailers reported currently using a spreadsheet for planning and allocation . This illustrates that despite rapid technological developments of best-in-breed capabilities and similar to the findings of the 2nd Annual Merchandise Planning & Allocation Survey, a large number of retailers have been slow to adopt integrated solutions. Leveraging robust tools that allow for management of transactions across all channels will become increasingly vital for retailers who seek to remain viable in a unified commerce environment.

Surprisingly, 38% of participating retailers reported currently using a spreadsheet for planning and allocation

The satisfaction level of retailers with their current systems environment also reveals further room for technological improvement. Although the satisfaction that retailers feel for planning applications is up from last year’s survey, the results are still neutral to negative. When asked to rate the effectiveness of their tools, 45% stated satisfaction with their merchandise planning tool, 21% with their assortment planning tool and only 15% with their space planning tool.

This dissatisfaction is not going unnoticed. Retailers are cognizant of the need for enhanced systems, with a majority planning to either upgrade or replace their assortment planning (65%) and merchandise planning (60%) systems within the next 1-3 years. Space planning enhancements will not be as strong of a focus for organizations.

A fully integrated unified commerce environment requires a solid technological foundation. As the survey shows, retailers are starting to appreciate the urgency behind systems improvements.  Nonetheless, transitioning from legacy systems and spreadsheets continues to be a challenge. Inability to fully embrace integrated systems will inhibit efforts to provide a truly unified commerce retail model. Those keeping pace with technological developments will find themselves at a definite competitive advantage until the rest of the industry is able to catch up.


Caroline Proctor

  16 Apr 2015 • By Caroline Proctor in Industry News

  

March Retail Sales Spring Back

Retail sales in March showed marked improvement over the previous months as consumer spending thawed right along with the weather. The National Retail Federation today reported that sales excluding autos, gas and restaurants increased 0.5 percent seasonally adjusted over February and a solid 3.5 percent unadjusted year-over-year.

"March's sales report is a welcome improvement after severe winter weather weighed on retail sales for the last several months," said NRF Chief Economist Jack Kleinhenz. "Both the composition and the magnitude of March’s rebound show that consumers are dipping back into their discretionary budgets and spending on both hard and soft goods; several business lines in March show signs of improvements.

March's sales report is a welcome improvement after severe winter weather weighed on retail sales for the last several months

"An early Easter also played into the seasonal figures and provided some lift in retailers' sales; though consumers will continue to spend on a selective and price-sensitive basis, we expect a stronger second quarter with steady improvements in job and income growth," continued Kleinhenz.

The U.S. Department of Commerce today reported that sales in March, which includes autos, gas and restaurants, increased 0.9 percent seasonally adjusted month-to-month and 1.3 percent unadjusted year-over-year.

Additional insights from March's retail sales report found:

  • Furniture and home furnishing store sales increased 1.4 percent seasonally adjusted over the previous month and 4.1 percent unadjusted year-over-year.
  • Electronics stores sales decreased 0.5 percent seasonally adjusted over the previous month and 2.7 unadjusted year-over-year.
  • Building materials, supplies and garden equipment store sales increased 2.1 percent month-to-month and 8.6 percent unadjusted year-over-year.
  • Clothing and clothing accessories stores sales increased 1.2 percent seasonally adjusted month-to-month and 3.3 percent unadjusted year-over-year.
  • Non-store retail sales decreased 0.1 percent seasonally adjusted over February and increased 6.6 percent unadjusted year-over-year.

Caroline Proctor

  14 Apr 2015 • By Caroline Proctor in Opinions

  

Social Media Isn’t Just for Teenagers

This is the fourth article in our series based on a research report JustEnough recently sponsored with Boston Retail Partners into the current state of the industry around Merchandise Planning and Allocation.

Here is part four:

Social media has drastically altered our mode of communication in the last ten years. In its most basic form, social media provides a venue in which retailers can directly communicate with their universal customer base. Extending beyond initiating dialogue, it can also be an extremely powerful tool for  collecting and using customer feedback to affect merchandise planning and allocation decisions. While this approach is still in its infancy for many retailers, the survey indicates a significant growth in the use of social media for merchandise planning purposes.

For the most part, the retailers surveyed are focusing their social media efforts on the mainstream  digital outlets of Facebook, Twitter and Pinterest. The importance of escalating digital media pursuits is being recognized though, with more than half of retailers planning to expand their social media and ecommerce groups within the next year. Conversely, using social media for analytics will take a little longer with only 25% of retailers targeting this area within the next year and 33% planning to expand their social media analytical abilities within 1-3 years. Retailers are clearly placing emphasis on content output and brand development rather than on the gathering, analysis and utilization of social media input.

33%

planning to expand their social media analytical abilities within 1-3 years

As the survey results indicate, retailers are just scratching the surface when it comes to leveraging social media content. The current use of social media data is limited, with only 39% using it for product development and only 35% using for promotional planning. However, this is up significantly from last year’s survey with a 550% increased use of social media for product development and a 190% increased use for promotional planning.

Only 8% of retailers incorporate social media data (including preferences, affinities, and trends) into business intelligence (BI) tools to utilize within the planning process.

Though motives behind the decision to utilize social media data vary by retailer, it is important to note the growing availability of tools that facilitate data mining of social media in the retail marketplace. With the integration of social login and e-commerce sites, retailers have been granted access to large quantities of customer information. For instance, upon logging on to a Website using social media credentials, customers consent to instantly provide retailers with demographics, preferences,  product/brand likes and many other details about themselves. This customer insight results in large quantities of relevant data ripe for retailer reference. This data can help align demand, sell-through merchandise, localize assortments, and establish pricing and promotions.

While the number of retailers using social media data for planning rose significantly from last year to this year’s survey, we see few retailers planning to invest in this area within the next three. In our discussions with retailers within the industry, we have found that there is still education needed on the benefits of mining social media data and the solutions available to enable this.

Retailers can gain significant insight into the minds of the consumer by fully making use of the tools and reporting functionalities that are accessible today. Using reporting capabilities, much like market basket analysis, retailers can start identifying new trends and opportunities, as well as further support or reinforce current ones. As data connections and correlations are developed, the process can be further refined to help support predictive analytics based on a socially engaged customer base.


Caroline Proctor

  07 Apr 2015 • By Caroline Proctor in Opinions

  

Unified Commerce Eliminates Channel Silos Delivering a Holistic Retail Experience

This is the third article in our series based on a research report JustEnough recently sponsored with Boston Retail Partners into the current state of the industry around Merchandise Planning and Allocation. In this article we’ll explore components necessary to create a strong foundation for implementing a unified commerce strategy.

Here is part three:

To keep up with best-of-breed competitors, most organizations are working towards offering a seamless customer experience across all sales channels. However, the survey results further confirm BRP’s industry observations that because this is such a large undertaking, most retailers are still in the process of implementing a complete unified commerce solution. According to the survey, 69% of retailers are planning on expanding their unified commerce capabilities within the next three years.

69%

are planning to expand their unified commerce capabilities within three years

One area of progress in offering the customer a single brand experience is the decrease in separate channel assortments offered by retailers. 28% of retailers have made the step to offering the same assortment across all channels within the organization.

Separate Channel Asortments

bl-separate-channel-assortments-graph
 
 
In the meantime, while retailers are working towards a unified commerce platform, they are dealing with the pain of working with different and separate silos of data to try to offer their customers a holistic shopping experience across any channel. One-third of retailers indicated that different silos of data are the biggest pain point within the organization.

There are several components necessary to create a strong foundation for implementation of a unified commerce strategy. The survey touched on six of the most vital elements, including:

  • Unified planning
  • Flexible allocations
  • Real-time inventory visibility
  • Inventory accuracy
  • Expanded coordination with vendors
  • Modified internal incentives

A retailer’s success is dependent upon their ability to implement robust capabilities in these arenas. Creating a unified plan is paramount to executing on a unified commerce strategy, and many retailers still have a long way to go. Surprisingly, only 8% of respondents have a working cross-channel forecasting method, 24% implemented but still need improvement and the remaining 49% plan to implement in the next 3 years. Once fully operational, retailers can leverage inventory across channels to decrease overall investment and improve inventory turn, margin and gross margin return on investment (GMROI).

34%

find that different sources or silos of data are the biggest pain point

Flexible allocations grant a retailer the ability to use real-time inventory information to determine the locational need for goods. Today’s best-of-breed solutions promote the transfer of inventory where it is needed when it is needed, serving as an important foundation to the unified commerce process. Despite the existence of technology to support flexible allocations, the retailers surveyed are still fairly siloed with 42% allocating to a single channel.

Real-time inventory visibility across the enterprise is another key piece to implementing a unified commerce strategy. Though most retailers can presently account for goods in the distribution center (DC), precise tracking of in-store inventory presents a bigger challenge. Unified commerce requires retail stores to know exactly where an item is located in order to meet customer demands for real-time fulfillment across all channels.

The majority of respondents indicated having some cross-channel inventory visibility, but only 26% have reached real-time visibility. We expect to see these numbers grow drastically as more retailers begin to fully adopt unified commerce best practices.

Inventory Visibility Across Channels

bl-inventory-visibility
 
 

Like real-time inventory visibility, increased inventory accuracy is fundamental to a unified commerce strategy. Today, retailers have a difficult time maintaining accurate inventory figures due to the infrequency of full cycle counts. The emergence of radio-frequency identification (RFID) technology is changing the retail landscape, bringing precision to inventory counts and eliminating the business disruptions caused by full cycle counts. In the coming years, we anticipate many retailers will join the likes of Inditex, Saks 5th Avenue, Chico’s and Neiman Marcus in deploying RFID technology.

Sharing the burden of inventory ownership with suppliers decreases inventory risk, frees up capital and allows retailers to offer customers extended choices via an “endless aisle.” Retailers are finding value in this practice, with 37% offering an order online/ship from vendor option and 41% a buy in store/ship from vendor. This practice will continue to grow, particularly as retailers actualize on the financial benefits derived from reduced inventory costs.

The last critical piece in the puzzle is the ability to compensate and effectively incentivize in-store retail employees. This is a challenge for even the most basic, single channel retailer. Throw in multiple channels of acquisition and fulfillment and the process becomes significantly more complex. In order for the unified commerce strategy to gain full support, employees must be incentivized to act in alignment with business strategy. With 49% of retailers giving credit where the sale originated and 31% where the sale was fulfilled, approaches need to be reevaluated to ensure full employee buy-in. This piece will be a challenge to solve, with retailers expected to go through many iterations before getting it right.

31%

credit the location fulfilling the sale for the customer


Caroline Proctor

  01 Apr 2015 • By Caroline Proctor in 

  

Despite Wintry Weather, Apparel Spending Picks Up in February

Judith Russell posted this article in the Sourcing Journal this week highlighting good news for apparel retailers.

Though total consumer spending had its smallest increase in seven months, apparel spending had its biggest monthly gain in almost two years.

According to data released on Monday by the Commerce Department, despite a month in which unseasonably cold and snowy wintry weather took a toll on store traffic and retail sales, personal consumption expenditures on apparel increased by 2.85% on a 12-month smoothed basis.

Spending on footwear slightly lagged that of apparel, rising by 2.2% in the month.

Women’s and girls’ apparel were the big winners, up 3.4% in the month, their sharpest collective increase since February 2013, making it the fastest growing segment for the twentieth straight month.

Men’s and boy’s apparel spending rose by 2.7%, rising faster than any month since May 2013. Children’s and infants’ apparel expenditures jumped by almost 2.9%.

Personal Consumption Expenditures

Personal Consumption Expenditures - Apparel


Caroline Proctor

  31 Mar 2015 • By Caroline Proctor in Opinions

  

The Current State of Merchandise Planning and Allocation

This is the second article in our series based on a research report JustEnough recently sponsored with Boston Retail Partners into the current state of the industry around Merchandise Planning and Allocation.

Here is part two:

The value added by employing formal planning processes is not going unnoticed in today’s retail market. Of the retailers surveyed, 89% undertake a formal merchandise and financial planning process, which is up slightly from 85% in last year’s survey.

Formal Planning Proccesses

bl-formal-planning-processes-graph
In addition, over half have formalized store planning, allocation and assortment planning processes. Advances in planning tools have certainly supported a wide range of merchandising and planning capabilities, and will increasingly continue to do so with the expansion of technological network developments in the retail environment.

Despite this, more than 60% of retailers still maintain separate assortments and separate inventories for different channels. Brick-and-mortar locations are still operating largely independently from e-commerce and vice versa. Further, collaboration with marketing initiatives is minimal, with only 32% of retailers managing marketing concurrently with planning.

64%

maintain a separate brick-and-mortar assortment

The significant business opportunity to leverage business intelligence came to light through the survey results. Respondents claimed they most commonly use basic reporting and analytics capabilities to obtain performance data. Only 25% are using business intelligence for cross channel planning, indicating the existence of a large improvement opportunity for retailers when analyzing their financial performance.

The balance in staffing plans and right-sizing the ratio of buyers to planners seems to have been struck. Organizationally, only a low percentage of respondents are planning to increase staffing of buyers and/or planners. That being said, assortment accuracy remains a concern for retailers. When asked to identify their business priorities, 67% of respondents identified enhancing assortments as one of their top 3 priorities.

Not surprisingly because enhancing assortments is a top priority, 65% also plan to upgrade or replace their assortment planning application within three years. These figures evidence a desire on the part of retailers to get their product offerings right. Taken together, the strong focus on micro-merchandising paired with the desire for enhanced systems reveals a growing appetite to rely upon technological efficiencies instead of increasing headcount.

Top 3 Priorities

bl-top-priorities-graph

Caroline Proctor

  24 Mar 2015 • By Caroline Proctor in Opinions

  

Merchandise Planning and Allocation Provide Windows of Opportunity

JustEnough recently sponsored research by Boston Retail Partners into the current state of the industry around Merchandise Planning and Allocation and uncovered considerable windows of opportunity for retailers as they evolve to support unified commerce. Over this and the next several posts, I’ll be sharing the research findings and conclusions. I hope you enjoy this series of articles.

Here is part one:

Merchandise planning and allocation is the retail supply chain discipline to initially predict, and subsequently react to, changing consumer tastes and buying patterns. Merchandise planners and allocation specialists are responsible for both inventory budgets and determining the movement of merchandise to the stores. When done correctly, inventory moves, sales grow and profit margins reward. Get it wrong and the retailer sees markdowns, out of stocks, poor performance and an inventory bubble that needs to be digested through the selling cycle, consuming space, inventory dollars and profits. Even worse, while this is happening, retailers don’t have room or the budget to fill the racks with better-performing merchandise. Many selling seasons have been won or lost through planning and allocation decisions. The fact that many retailers now operate across multiple selling channels (online, in-store, mobile, etc.) further complicates these processes.

merchandising:

[mur-chuh n-dahy-zing]

noun

  1. the planning and promotion of sales by presenting a product to the right market at the proper time, by carrying organized, skillful advertising, using attractive displays, etc.
  2. the selection and display of goods in a retail outlet

As the challenges have grown, so have the technologies supporting retail merchandise specialists. Consumers expect a fast and efficient selling and delivery process, where the physical and digital selling channels converge to provide a cohesive shopping experience. These unified commerce shopping concepts have grown significantly, requiring retailers to put more functional capabilities in place than ever before. With dozens of emerging tools and techniques to support and expand business, it is an exciting time to be a retailer.

unified commerce:

The elimination of individual channel silos to offer a holistic customer experience across all customer touch points by leveraging a single commerce platform

Despite a significant growth in technological capabilities, adoption of a transparent cross-channel inventory has yet to become a reality at most retailers. While the desire is strong, replacing legacy systems, realigning processes, expanding associate visions and the incentives to do so have made the process challenging. Developing a strategy and roadmap for offering a real-time view of retail is now essential for success.

We believe business analytics will play a key role in this retail transformation. Evaluating and incorporating all available insights when inventory planning and allocation decisions are made greatly enhances the outcomes. For instance, merchants should be considering every data point available in the planning process, including: business intelligence, inventory movement, shopping behavior, customer relationship management (CRM), social media, clienteling data and customer demographics/segmentation.

Boston Retail Partners’ 2014 Merchandise Planning and Allocation Survey explores the current state of the industry and how technology is shaping retail capabilities, highlighting the priorities, processes, tools and strategies of today’s retailers. Further, it uncovers considerable windows of opportunity for retailers as they evolve into enhanced business models to support the growing need for unified commerce.

In the next article we’ll review the current state of merchandise planning and allocation.

Some of the best pratices identified in this year’s survey include:

  • 31% of retailers utilize a single inventory across channels
  • 26% of retailers have real-time visibility of in-store/online inventory
  • Nearly 50% of retailers have integrated business processes and systems across channels
  • 33% of retailers utilize CRM data to feed their business intelligence tools
  • Nearly 40% of retailers use social media to facilitate planning within product development

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