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 which uncovered strategies that retailers can focus on to enable effective planning in today’s omni-channel world.
We will continue to look into the elements the survey found that retailers can focus on to enable effective planning in an omni-channel world. Please contact us, if you would like to learn more about how JustEnough solutions are helping leading retailers to successfully plan for their omni-channel operations.
Improving analytics is the top planning priority for retailers (Exhibit 10). Retailers continue to focus on analytics, as it was a top priority from last year’s survey as well.
Exhibit 10: Top planning priorities
Analytics serve as an important tool in assisting retailers to find and interpret meaningful patterns in customer and inventory data to support decision-making. Insight into customer demand, price sensitivity, reaction to promotions, demographics and more are key to drive merchandise plans and actions that maximize profitability. This is especially critical in an omni-channel environment, as understanding the preferences of disparate customer groups across different channels becomes more complicated.
Analytics provide visibility into sales performance by channel, assortment, and item, making it extremely valuable for strategic decisions. As omni-channel integration and planning become the norm, the analysis required to support strategic decisions becomes more complex and data intensive. It is becoming essential for retailers to broaden their analytical capabilities to effectively address these complicated quantitative decisions. For example, at the convergence of social media and advanced analytics are emerging tools such as scrapers that collect and analyze website activity to help identify trends and missed opportunities.
Despite readily available data, retailers are still often challenged to successfully understand and utilize analytics. Among most organizations, the ability to leverage analytics to improve business performance lags intent. This gap can be attributed to various environmental factors that are currently prevalent among retail businesses.
The ability to execute upon advanced analytical capabilities is limited primarily by tools, data and internal skills. The tools utilized by many retailers lack the consistent capability to answer today’s critical, forward looking business questions efficiently with supporting data, transparency and trust in the results. Many organizations also deploy measures without a comprehensive enterprise analytics strategy, resulting in both under-utilization of capabilities and an absence of the requisite knowledge of existing tools and data to ensure their efficient use.
Implementation of a successful omni-channel approach undeniably requires organizational alignment across all business segments, and analytics are not exempt. A large number of today’s organizations have capabilities and processes that are inconsistent across functions. Without organizational alignment, it is difficult to maximize the benefits that big data can bring to omni-channel performance. Three-quarters of the respondents currently utilize advanced analytics in merchandise planning while only 20% utilize it within omni-channel planning (Exhibit 11).
Exhibit 11: Advanced analytics use
You can read the complete BRP 2015 Annual Merchandising Planning Report here.