The new EKN 2016 Assortment Management and Optimization report offers valuable insights about the state of assortment planning. Sponsored by JustEnough Software, the report is based on findings from a survey of about 50 North American retailers. In my last few posts, I touched on the most pressing challenges retailers face in optimizing their assortment planning processes, as well as areas they plan to invest in and capabilities they use or plan to use to realize these goals.
Today, I am going to spotlight the merchandise planning solutions retailers have already adopted and those they are currently upgrading, according to the report. Even among large, well-established brands, the use of legacy applications and spreadsheets to manage key merchandising functions is a fairly common practice. Retailers can address many legacy and traditional planning, assortment and allocation-related integration gaps by adopting a unified and integrated workflow-based platform guided by four strategic pillars: customer science, digital user interface and experience, integrated workflow and functional collaboration.
Visual merchandising, category management and space planning top the list for upgrades for nearly half of the retailers surveyed. More than 40% said they are currently making much-needed upgrades to their ERP-based or best-of-breed demand forecasting, distribution center replenishment and assortment optimization systems as a means to align location-specific financial and profitability plans with assortments that catch the eye of discerning shoppers.
While almost half the retailers surveyed indicate they possess updated systems for allocation, store replenishment, item master, analytics and space management, in reality, there are often large integration gaps between planning and execution applications and related workflows. Additionally, retailers are in the process of overhauling their pricing, promotions, markdown and planogram management technologies due to the fact that a large concentration of legacy or homegrown applications are close to or have reached end-of-life.
The EKN 2016 Assortment Management and Optimization report also found that 62% of retailers deployed their merchandising systems using a licensed on-premise model; however, one-third have adopted SaaS applications and managed-services models. SaaS applications have caught on for their flexible pricing terms and ease of scalability and future upgrades, while managed services offer an alternative for organizations with limited IT resources.
Read the full report here, and keep an eye out for next week's blog post highlighting the recommendations it makes to help retailers improve assortment planning and execution.