Unified commerce is a concept on the mind of most of today’s retail executives. It’s a step beyond omni-channel, endeavoring to serve consumers when, where and however they prefer to make a purchase by taking systems once siloed based on different channels and merging them onto a single data set.
According to a recent IHL study published in RIS News, 86% of software spending in retail organizations is going toward the five pillars of unified commerce: store systems, merchandising/supply chain, business intelligence/analytics, sales and marketing, and e-commerce systems. Advanced organizations understand these functions must be aligned to compete in today’s dynamic and swiftly changing retail environment.
Over the next few weeks, we’ll dive deeper into the findings of the 2017 Unified Commerce Landscape report, which correlated sales growth against 15 various commerce strategies being used by more than 90 retailers across the U.S. and U.K. When asked about their priorities, the research found that retailers of all levels of success are focusing on three key areas in 2017: improving customer loyalty, creating a seamless shopping experience and creating a “wow” experience at the store.
The key difference between retailers that demonstrated strong sales growth and those that didn’t is the balance between those three above-mentioned priorities. Retail “winners,” as the report describes them, are thinking about these areas simultaneously and in a more balanced way. IT spend is another indication – retailers that are willing to make investments in systems to improve the overall customer experience tend to be those that are on the more successful end of the spectrum. Among general merchandise retailers, there is another area of consideration this year: providing actionable analytics to store associates to help them make better decisions at the point of customer interaction.
If we look closer at the impact IT spend has on sales growth, the report indicated that retail winners across all segments spent nearly 70% more on IT as a percentage of revenue in 2016 compared to their less-successful counterparts. IHL also pointed to differences when it comes to planning for budget growth: retail winners across all segments are increasing their total IT spend at a rate of 87% faster than the laggards. Among food, drug, convenience and mass merchant retailers, that figure jumps to a whopping 107%. Finally, retail winners across all segments are hiking up their store-level IT spend at a rate of 133% faster than the laggards.
Next time, we’ll explore the systems that constitute the building blocks of unified commerce. In the meantime, read the full report here, and contact JustEnough today to learn more about our integrated, end-to-end suite of planning solutions support many of the world’s leading retailers.
Consumers are more empowered than ever to find exactly what they want, when they want it – all of which can wreak havoc on the bottom line if an organization isn’t prepared to make in-season planning adjustments.
Exception management, supported by a variety of business intelligence tools and reporting mechanisms, allows retailers to better navigate and react to variances in the plan. It is becoming highly sophisticated as businesses gain greater access to modern planning technologies and ever-more granular information about their customers’ lifestyles, buying behaviors and product preferences at the location level.
In a recent article, I discussed six strategies to help retailers better manage variances in their plan throughout a season and therefore avoid the costly pitfalls of having too much or too little stock on hand. Below is a summary of these six points:
- Holding inventory back. Retailers can circumvent variances in the plan by holding back a percentage of inventory in the DC from the start, while pushing the rest out to their stores and online channels.
- Prepacking. Store-level forecasts have an important role to play when optimizing prepack purchases. Of equal importance is determining the correct balance of prepacked and “loose” units in each planned receipt – the right combination offers greater flexibility when filling in missing sizes, colors, etc. as needed.
- Regular replenishment maintenance. Regular review of stock position for top-selling items throughout the season is crucial. In scenarios where stock outages are likely – or even unavoidable – retailers can strategically limit replenishment to protect stores with the greatest selling potential.
- Store-to-store transfers. Store-to-store transfers can be a very effective means of rebalancing inventory to meet shifting trends for items with sufficient profit margin. The key to this approach is weighing the proximity of stores with need against additional freight costs.
- Expanding product footprint. If slow-selling inventory, retailers may consider expanding the item’s footprint into locations that initially seemed to have less selling potential. Effectively doing so requires a thorough review of sales data, as well as customer insights, social media feeds and feedback from store managers to determine where inventory is most likely to drive up sales and profits.
- Vendor push/pull tactics. Businesses that realize a particular item is not selling fast enough and will result in markdowns at the end of the season may be able to partner with vendors to hold or even cancel subsequent deliveries at their facilities versus shipping as originally planned. Conversely, if demand for a particular item is higher than anticipated, retailers that identify this issue early on may want to consider changing the method of delivery or requesting an earlier ship date.
Technology is the underpinning to an advanced workflow that alerts retailers as soon as possible to exceptions in their merchandise plan. Read the full article here, and find out how JustEnough’s demand-driven suite of solutions offer the flexibility required to make in-season planning adjustments.
Earlier this week, I was honored to be named to Supply & Demand Chain Executives’ 2017 Provider Pros to Know list. This annual awards program recognizes individuals from software firms and providers, consultancies or academia who have helped their supply chain clients or the supply chain community at large overcome significant business challenges.
Supply & Demand Chain Executive asked each nominee about the key challenges facing their customers and their supply chains in the year ahead – and how we are working to address them. In this week’s blog post, I thought I would share my response to this question by exploring several pain points many retailers are facing:
- The ability to capture accurate POS data by channel. Retailers now offer their customers many POS options. It’s critical they capture accurate information regarding where sales are made and where demand is fulfilled in order to optimally position inventory in the future.
- Gaining real-time inventory visibility from the purchase order to the DC to each individual selling channel. Moving from channel-specific inventory to shared inventory across channels enables retailers to react to variability in regards to where demand is coming from. However, it requires complete visibility into inventory at every level of the supply chain in order to efficiently fulfill demand.
- Adapting to a shift in modeling. Traditionally, modelling has focused on structured product and location hierarchies. But, it’s beginning to shift toward a focus on customer-preferences and product attributes. This calls for the capture of very granular, non-hierarchical data points – which must be available to the merchandise planning team in a way that is consumable.
- Creating a flexible supply chain configuration. Supply chains typically have been linear and fairly straightforward to set up. Nowadays, they must be nimble and provide a way for inventory to move forward, backward and sideways to be properly positioned. Configuring modern supply chains requires the use of complex rules that enable inventory to flow faster through them. Retailers can no longer wait for inventory to arrive at their DCs before being dispersed to stores – they need the ability to pre-allocate inventory from the point of purchase orders in order to reduce lead time. Cross-docking and pre-packs are additional techniques that retailers can use to facilitate supply chain time compression.
- Better anticipating demand. Today’s retailers must do more than simply monitoring demand and buying and pushing out inventory. Competing in today’s dynamic business environment requires insight into near-future demand, which drives multi-channel inventory execution to meet planned demand. Consuming information regarding customer shopping preference and buying behavior helps to better anticipate demand and supports the ability to project the movement of inventory to the appropriate channels.
To address these challenges, the JustEnough team and I work directly with our retail customers to understand how to best implement our fully integrated, end-to-end suite of omni-channel demand management solutions, as well as integrate with their existing systems. Our solutions are designed to make it easier for users to position their systems and processes to handle a flexible supply chain configuration.
Read our press release here, as well as the full list of Supply & Demand Chain Executive 2017 Provider Pros to Know here. Contact us today to learn how some of the world’s leading brands leverage JustEnough to streamline their business processes, make better decisions and achieve results that have a positive impact on the bottom line.