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.
Black Friday sales confirmed that, above all, discounts drive consumers to open their wallets. A new study by the National Retail Federation published in Fortune found that shoppers spent $289.19 on average over the four-day weekend compared to $299.60 over the same period last year. The NRF estimates that 108.5 million people in the U.S. shopped online and 99.1 million visited brick-and-mortar stores on Black Friday and the days that followed.
The article also points out that discounting for the Black Friday rush started earlier this year (right after Halloween). Market Track analysis the week before predicted that deals would be deeper to drive up traffic – likely because top retailers like Walmart said they would fight hard on price. Best Buy and Macy’s Black Friday deals were 5 percentage points greater this year versus last, while Walmart’s were 4 points higher. Even luxury retailer Neiman Marcus was uncharacteristically aggressive in marketing its promotions this year.
The NRF survey also found that 36.2% of consumers indicated all their purchases were on sale, and two-thirds confirmed what they bought was discounted. BTIG analysts suggested that Black Friday shoppers responded solely to promotions – especially at lower- and middle-tier retailers. This aligns with pre-holiday predictions that discount stores, in particular, would thrive this holiday season given how well they did the weeks leading up to Thanksgiving. Foursquare, a location tracking company, believes that the number of visits to dollar stores this year will exceed that last two holiday seasons for two reasons: for one, customers are less interested in traditional Black Friday sales, and secondly, Americans are increasingly shopping at deep-discount retailers year-round. This corresponds with the rise of dollar stores across the country, which have increased by 45% within the last 10 years, according to Nielson data. Additionally, research firm NPD Group found that discount shoppers account for two-thirds of all customers.
It’s a fact that deep-discount retailers are the clear 2016 Black Friday winners and are likely to garner the majority of all sales this holiday season. Contact us today to learn how JustEnough helps dollar stores, like the 99 Cents Only, navigate the season and beyond with best-in-class, full integrated and easy-to-use retail planning solutions – from accurate demand forecasts to optimize assortment planning to allocation and replenishment.
Holiday shopping splurges are not uncommon, according to a new study conducted by Prosper Insights & Analytics for the NRF. Last year, four in 10 consumers spent at least $50 more than they originally budged for, and one in eight spent more than $200 than they planned to.
Although 43% of shoppers said they’re planning to be more conservative in their spending this holiday season, 90% could be convinced to extend their spending budgets by $25 for the right reasons – 51% of which said a really good sale or promotion was the main driver. Generation X shoppers are the most likely to give into a good deal at 55%. As such, the article expects that deals and discounts will be leveraged by retailers throughout the year to drive sales.
The second-most cited reason shoppers gave as to why they’d spend an extra $25 on holiday shopping is if they found the perfect gift for someone they originally hadn’t planned to buy for (34%). Millennials are more likely than their older counterparts to do so, and one in five in this generation said they’d open their wallets for something that’s hard to come by. More than one-quarter (27%) of consumers said they’d spend more if they found something they wanted for themselves. The article suggests retailers provide gift list ideas and reminders, as well as offer “limited-time” or unique items, to capitalize on shoppers who are motivated by these reasons to bend their budgets.
Free shipping with no minimum thresholds would get 27% of consumers to spend a bit more than they planned to. In fact, women (31%) are much more likely than men (22%) to do so. An easy return policy could entice 15% of shoppers 65 years of age and older to go over their holiday budgets. Finally, 17% of consumers said they’d be willing to spend an extra $25 if they needed supplies for a last-minute holiday party.
The article also mentions the rise of personal shopping and subscription services in recent years, which points to a growing desire among consumers for extra help and advice on finding what they need. Ten percent of shoppers said they could be convinced to purchase a higher-quality product than what they initially intended to buy, and others admit that a knowledgeable sales person could influence their decision to purchase something that wasn’t originally on their list.
Read the full article here, and contact JustEnough today to learn how our Price & Markdown Planning and Promotion Management solutions help retailers maximize sales and increase traffic by making it easy to set multiple price and markdown structures with complete visibility into inventory, revenue and margin impacts.
Many retailers are looking to make omni-channel technology investments next year, according to new research from RSR. The annual benchmark on omni-channel strategies found that while the term “omni-channel” has applied to the retail industry for less than 10 years, many of the solutions that help retailers present a unified face to customers are becoming outdated. In addition, the way retailers define omni-channel and what it means for their business is evolving.
In 2017, the top three omni-channel areas retailers plan to invest in are:
- Enterprise-Wide Inventory Visibility: 37% of retailers endeavor to make a change to their system and/or process, 19% of which are planning net-new projects. RSR believes retailers have some ways to go to maintain inventory visibility – due, in part, to ship-from-store and other cross-channel efforts to save the sale at any cost. The article suggests retailers take a step back and evaluate what inventory visibility actually means to them considering that key internal stakeholders – merchandisers and store employees, for example – often have their own interpretation. In addition, the term “enterprise-wide” does little to describe what level of visibility is actually needed, how “real-time” it needs to be, or how frequent as this can vary from company to company.
- Distributed Order Management: 46% of retailers say they are planning a change to their system and/or process, 14% of which are embarking on net-new projects. Retailers may hesitate to engage in a distributed order management overhaul as the often-lengthy and complicated implementation can shine a spotlight on major process issues. However, retailers that bite the bullet and let the implementation play out as it should will be best-positioned to take advantage of newer distributed order management advancements, especially if store capabilities that drive ship-from-store and other cross-channel save-the-sale activities are included.
- Enterprise Content Management: 42% of retailers are planning to make a change to their system and/or process; 17% of which have budgeted for net-new projects. This area within the omni-channel sphere is the most digital in nature. Today’s content management systems incorporate both product and marketing needs and may continue to evolve to include capabilities like managing user-generated content.
Aside from these three omni-channel areas, retailers will also be looking to improve their Enterprise Cross-Channel Analytics. Thirty-two percent indicate they are planning a change to their current system and/or process – the majority of which at 25% have budged for net-new projects. RSR predicts this boils down to purchasing enterprise analytics that provide cross-channel visibility. The ability to tie digital insights to larger business decisions is key to succeeding with omni-channel shoppers.
Read RSR’s full omni-channel retailing analysis here, and contact us today to learn how JustEnough Software’s fully integrated suite of planning solutions help leading retailers compete in today’s ever-more complex omni-channel environment.
There’s no doubt that the retail sector has been undergoing rapid transformation – fueled by the rise of e-commerce and mobile shopping, as well as post-Great Recession changes in consumer purchasing behavior. What has emerged, according to an article published in The Huffington Post, are remarkably agile and flexible retailers that are growing and profiting despite a still-volatile marketplace.
Recent Census Bureau news shows that the change to the retail industry is not simply isolated to how and when consumers shop: In fact, there has been shift in regards to what they are purchasing. Although median incomes in the U.S. jumped an astonishing 5.2% in 2015 and core retail sales following the Great Recession had recovered by 2010, overall retail spending levels have not yet matched those pre-2008. Not unexpectedly, there has been an overall decline in sales at brick-and-mortar stores – specifically among general merchandisers (i.e., department store and discount retailers), as well as electronics and home furniture retailers. Only the food and beverage services sector (restaurants and bars) are realizing growth in this area.
According to the Census Bureau data, there are two clear trends impacting the retail industry today:
- A significant portion of goods sold at brick-and-mortar stores have shifted online, where e-commerce comprises almost 10% and is on the rise
- Customers tend to dine out when they are in brick-and-mortar locations, which is reflective of the increase in food services sales
The article points to businesses that are exhibiting the creativity and agility needed to thrive despite this shift. Gap and Macy’s, for example, are downsizing their store counts and putting more emphasis on the online shopping experience. Barnes & Noble is capitalizing on the growth of food sales by expanding its dine-in services in an effort to drive up traffic, and Amazon is opening brick-and-mortar bookstores in select markets to add to its incredibly successful online shopping model.
Although consumer spending behaviors have changed, there will always be a need for goods and services. Retailers that focus on understanding what motivates their customers to open their wallets, make data-driven decisions and can swiftly adapt to further change will be those that succeed.
Read the full article here, and contact us to learn why the world’s leading brands rely on JustEnough’s highly scalable, flexible and easy-to-use suite of retail planning solutions to keep pace with ever-more demanding shoppers and the rise of new selling channels.