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.