NOTE: Raymark is now part of the Mi9 Retail team. Read the press release here.
Next Generation Planning
Industry Perspective in RIS News, March 2011
Q1: As we know, retailers cut way back on inventory during the recession. As the economy improves and inventories rise, how can retailers effectively forecast to avoid stock outs while minimizing mark-downs?What makes one retailer successful while a similar one struggles? Why do customers gravitate towards certain stores and never frequent others? These are the dilemmas many retailers are attempting to solve as each of them strives towards the same goals – attaining customers’ attention and retaining their loyalty. Retailers know they need ‘it’; they simply aren’t sure what ‘it’ really is.
A: Following the effects of the recession and changing consumer behavior, many traditional forecasting methods are out-dated. To stay competitive, retailers must re-write the forecasting rule-book. Accuracy, detail and timing become the essential tools of successful forecasting. Planners must consider a blend of data spanning before, during and after the recession. They must drill down to store level, going beyond breadth and depth, to consider color/size preferences, becoming attuned to the needs of the customer. This data should be used to re-evaluate store distribution of orders as close as possible to receipt time. By adopting an integrated planning tool such as Raymark’s Xpert-Planner™, retailers can view financials, carry out assortment, and complete case pack, color/size optimization and store ranking in one flow, improving accuracy and efficiency.
Q2: Planning & forecasting is only as good as the data going into the plan. With the advancements in BI, how can retailers better utilize and embed the purchase data they collect to more accurately plan and forecast?
A: Advancements in BI technology will have a significant impact on assortment planning. BI tools = now enable retailers to analyze a greater range of information more quickly and efficiently. BI tools are also more flexible with the functionality to carry out differential and incremental updates, drawing on defined data and eliminating slow processing times previously caused by full system updates. By implementing a multi-dimensional, integrated planning system, rather than the two dimensional forecasting tools of the past, assortment planners have the ability to extract more detailed, accurate BI data from the store- level up. Retailers can now gain insight into customer desires, shopping patterns, lifestyles, climates and trends enabling planners to make well informed accurate decisions that will attract customers in an increasingly competitive environment.
Q3: What are the three most immediate benefits from implementing a new generation planning system?
A: New generation solutions are more sophisticated, ergonomic tools than their predecessors benefitting retailers by making it possible to view multiple pieces of information simultaneously and effectively. By using a fully integrated planning solution retailers can benefit from reduced risk of inaccuracies because data is transferred within one system eliminating human error or system incompatibilities. Secondly, the depth of information that can be sourced and the speed at which it can be obtained allows retailers to access up to date information from store level in a much shorter time frame. Thirdly, the planning process becomes more efficient fuelled by effective, relevant data. The result is an intelligent planning process which will lead to cost-savings across the business.
Q4: Localizing assortments has been very popular of late. How can planning systems more effectively enable retailers to meet localized demand?
A:To effectively meet demand retailers need the capability to analyze trends at both a local and global level. New generation tools like those offered in Raymark’s Xpert-Series™ can be utilized to quickly and efficiently filter data to provide planners with real-time, relevant information which can highlight changes in demand or consumer behavior allowing them to react quickly. An effective planning system for today’s retail environment must have the flexibility and capacity to apply methodologies for differing locations and their individual economies in order to accurately fulfill localized needs. Planning systems must be integrated to ensure that each localized sub-plan feeds into a master plan to provide a global view and ensure that all channels can be managed effectively.