This is the last 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.
I hope you enjoyed this series of articles. 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.
Here is the final part:
The right technology tools
As mentioned earlier, a combination of appropriate tools and systems are necessary to fully support the omni-channel environment. Absent the right technology – with the processes and organization to support it – omni-channel strategies fail to achieve maximum efficiency and benefit for retailers. Best practices dictate the use of a full suite of planning tools working as an integrated system. This year’s survey results reveal that while retailers realize that their current systems are inadequate and that there is a need for better tools, the situation cannot be remedied overnight. Retailers realize there is still significant opportunity to enhance their planning capabilities from a technological perspective.
Fully integrated solutions have not gained vast acceptance into the systems landscape at most retail organizations. Leveraging robust tools that allow for unified management of transactions across all channels will become increasingly vital for retailers who seek to succeed in an omni-channel environment.
A fully integrated omni-channel environment requires a solid technological foundation. As the survey shows, retailers are starting to appreciate the urgency behind system improvements. However, transitioning from legacy systems and spreadsheets continues to be a challenge. The inability to fully embrace integrated systems will inhibit efforts to provide a truly omni-channel retail model. Those keeping pace with technological developments will find themselves at a definite competitive advantage until the rest of the industry is able to catch up.
Unfortunately, spreadsheets are still prevalent in the planning process, especially in assortment planning where 42% of the respondents utilize a spreadsheet (Exhibit 13). It is also interesting that a number of retailers use a combination of applications for their planning requirements.
Exhibit 13: Application type
Many retailers indicate their planning applications are lacking effectiveness (Exhibit 14). It is interesting to note that the effectiveness of applications seems to follow the application type. Vendor or homegrown apps are more effective than spreadsheets. Overall, retailers are not happy with their applications, which leads to the massive planning application upgrades/replacements planned for the next two years.
Exhibit 14: Application effectiveness
Retailers face many issues with planning systems. As mentioned earlier, many systems were replaced in time for Y2K and may be out of date. Many systems don’t have the capabilities needed to effectively plan in this ever-evolving retail environment. Some retailers are dealing with budgetary issues as the retail industry has struggled in the last few years. Others may have good intentions to upgrade their systems to accommodate an omni-channel environment, but struggle with what to do and how to do it. This is certainly a challenging time to be a retailer, however, there is a realization in the industry that changes need to be made to update the planning process, and that is certainly the first step towards success.
Savvy retailers know they have a problem with their current planning systems – they are ineffective and out-of-date – and most are beginning to take action. The good news is that there are some very good tools available to address these outdated systems, but technology is only part of the solution.
To successfully meet the needs of an omni-channel world, the people and processes involved to support it are just as critical to address, and the systems must integrate analytics with operational processes and solutions. The imperative is to address these issues before disenchanting today’s ever more demanding customer.
Standing still is not an option – what are you going to do?
You can read the complete BRP 2015 Annual Merchandising Planning Report here.