This is the last installment of a four-part blog highlighting the findings of a survey conducted by Boston Retail Partners identifying the top merchandise planning priorities for 2016. This JustEnough-sponsored report found that 63% of retailers plan to upgrade or replace their merchandise planning systems by 2018, recognizing that their current planning systems are not well equipped to remain competitive in today’s omni-channel environment. Even with the right tools in place, retailers still see significant value in knowing and understanding what consumers want to buy and many plan to improve their capabilities to move towards more customer-centric planning strategies.
Outlined below are the last four remaining priorities focused on demand planning and forecasting.
Markdown reduction is once again a top priority with 36% of retailers indicating this is a key issue for them. Failing to understand what customers want, when they want it and how much they’re willing to pay for it, leads to markdowns of excess inventory and reduced profit margin. Both art and science are required to minimize margin hits while also reducing the risk of overages and obsolete merchandise. Profit follows margin and markdowns eat huge amounts of margin in retail.
Improve Product Availability
In order to remain relevant in today’s marketplace, improving product availability has become a significant priority – especially for hard goods retailers, with 71% stating this as a top priority. Overall, improved product availability is a priority for 19% of retailers. The reason hard goods retailers find this more critical is the advent of large online retailers, such as Amazon, whose business models feature extensive, endless aisle inventory.
Many of these retailers are increasingly using systems to gain visibility into a vendor’s inventory. This can increase assortment options and help them compete better with large online retailers and make products available at the right place and time without over investing in inventory.
Improve Demand Forecast Accuracy
19% of retailers surveyed place improved demand forecast accuracy as a priority for 2016. Not surprisingly, as retailers move to omni-channel strategies, forecast accuracy is more critical as retailers need to cover sales across various channels and ship initial inventory to the right locations. The systems and software available today are more sophisticated and can help retailers gain more accurate forecasts with analytics and advanced forecasting systems. Integrating these forecasts into all levels of planning and execution helps to drive higher margins and better in-stock positions.
Improve Demand Planning Capabilities
The traditional top-down planning process is no longer one that can fully support today’s retailer. Retailers are moving towards bottoms-up approach to demand planning based on scientifically and mathematically derived forecasts. This bottoms-up approach takes into account trends and data including weather conditions, social media responses and geo-spatial technology. For 40% of retailers this is a formal planning process and for 19% improving demand planning capabilities is a top priority.
JustEnough Can Help You Improve Demand Planning and Forecast Accuracy
JustEnough´s Demand Management solutions enable you to improve your demand forecasting and inventory planning, significantly reducing working capital requirements. With JustEnough solutions, you will be able to formalize your supply chain process, make demand central to planning, focus on balancing service levels and inventory and postpone committing inventory.
JustEnough’s Demand Forecasting accurately calculates the true demand for your product and the exact amounts you should be replenishing to avoid overstocks, stock outs, product obsolescence and lost sales. In addition, the solution enables you to minimize inventory and gain quicker inventory turns with increased customer service levels. Increased planner productivity with exception-based reviewing and automated plans provide increased forecast accuracy. Contact us to learn more about how we can help you improve your demand planning capabilities.
The Top 10 Merchandise Planning Priorities for 2016:
- Improve Analytics – 58%
- Reduce Markdowns – 36%
- Better Integrate Assortments and Space Planning – 36%
- Enhance Merchandise Planning – 33%
- Enhance Assortments – 22%
- Decrease Merchandising Decision Lead Times – 22%
- Improve Execution Response Time – 22%
- Improve Product Availability – 19%
- Improve Demand Forecast Accuracy – 19%