Retail planning is a complex mix of internal needs and external factors that both need to be balanced appropriately. If you can find this balance, it can make everyday business easier. For example, department stores and suppliers can find themselves no longer at odds over things like promotions and discount pricing.
How can you align your planning for increased cohesion? Here are some important strategies for retail planning.
Exploring the Four W’s
The four W’s: what to sell, where to sell, when to sell and who to sell it to. Understanding and applying these to sales is critical as they’re needed to balance positive customer experience, inventory and consumer demand.
To identify your W’s, you need three things in place:
- A product strategy.
- A cross-channel strategy.
- A customer strategy.
Just one of these isn’t enough as there are drawbacks to solely relying on one. For example, if you’re a retail organisation that has a merchandising campaign based only on product strategy, you’ll probably see sales in online products or brick-and-mortar sales - but not in both.
Retailers can also be good at both product and cross-channel strategy, but fall down when it comes to their customers. Without an effective customer strategy, your products might fail to resonate and this can harm your overall brand identity.
Having a good setup of these three strategies helps to streamline the overall chain of marketing, supply and demand.
We mentioned in the introduction that sometimes retailers and suppliers can war over promotions. The retailer might want to offer discounts but the supplier doesn’t. To help, product pricing needs to be optimsed, combining product inventory, sales channel and customer data to create a retail strategy that should also take into account external factors.
By identifying the four W’s, you can effectively increase the customer centricity of your retail planning, helping to ease the alignment between what a customer wants and how a retailer provides it.
Reinforcing Planning with Integrated Technology
Technology is the main weapon of choice for today’s retail specialists and it spans many areas, from supply chains to marketing. A key tool for retailers is integrated planning and forecasting technology. Software like this can enable advanced decision-making, based on the use of real-time data and algorithmic modelling.
Today, spreadsheets or non-integrated legacy technology are the enemies of speed and flexibility - two things modern retail planning needs to survive. Connected Planning software like Anaplan has scenario planning capabilities far beyond, and without the limitations of spreadsheets.
For example, by using a Connected Planning platform, the American food production company Del Monte was able to see significant results. They narrowed their supply chain and financial planning process from two weeks to two days.
To improve your retail planning, seek out platforms that are universal, real-time, cloud-based and enable you to be proactive and align the processes we've discussed.
Improving the Alignment of Retail and Supply Chain
The cost of raw materials is rising and yet consumers still want cheap products. Price fluctuations of commodities influence the prices of retail items. This means that to create effective retail planning strategies, you need to align your business with suppliers and the supply chain..
With a clearer view of the supply chain - accessibility of products and the true value of materials, you can effectively adjust your prices and orders to remain profitable. This can’t be done without real-time data and transparency - which requires connected planning technology to achieve.
Maintaining Customer-Centric FULFILMENT Channels
Managing inventory for online and physical stores can be a challenge, especially if there isn’t clear visibility of inventory and order numbers. There’s an increased demand for online orders, both those packaged and sent and those picked up in stores. This means the success of retailers depends on mastering both cross-channel selling and customer-centricity.
You need to focus on how the customer buys and reinforce those processes. If there’s no alignment between different types of sales, friction is going to occur. For example, it was shown that BOPUS (‘Buy Online, Pick-up in Store’) was the most valuable aspect for the retail shopping experience for four in 10 customers. And big retailers see this.
The American superstore giant Wal-Mart allows same-day store pickups and places inventory at stores closer to workers to save time. This helps soothe pain points for online shoppers and also create more alignment between online and brick-and-mortar sales, creating a truly omnichannel approach.
Balancing Market Volatility and Merchandise
Imagine you’re a retailer of technical winter clothing, for hiking, mountain climbing and snow sports. Due to the changes in weather and climate, for half the year you may experience much lower sales than the other. Similarly, if the temperature is warmer than normal during winter, how do you deal for the amount of unsold merchandise you have on your shelves?
External market influences such as climate, geography and the overall state of the economy are things you need to consider and incorporate into your retail planning strategies.
If you have the available data, use it to forecast for lulls in demand. If you see a period of thin consumer interest, make sure your stock orders represent that. It’s much easier to see a smaller profit in comparison to the last quarter, rather than a loss.
Market volatility is one key reason you need to remain agile within your industry. If you’re looking to create agile retail planning strategies, why not use our cheat sheet?
Try Our Retail Planning Cheat Sheet
This helpful resource will help you get to grips with demand planning for retail, covering in-depth what we’ve discussed in this blog. It goes over customer-centricity, inventory best practices and the use of integrated planning technology.
Click the link below to explore.