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.