3 Biggest Requirements for Successful Retail Planning
The following transcript was created using a combination of automated and human transcription. Please check the audio version before quoting from the transcript.
Mary Vasile: Hi, everyone. Welcome to Three Minutes in the Loop, the bite-size video series where you can stock up on the latest supply chain insights, strategies, and news in the time it takes to get your caffeine fix. I’m your host, Mary Vasile, and today we’re covering the biggest requirements for successful retail planning. Our special guest is Brett Bever, Global Product Management Director at ToolsGroup. Brett, welcome to Three Minutes in the Loop.
Brett Bever: Pleasure to be here, Mary.
Mary: Good to have you. Retailers are operating in an increasingly competitive environment. Not only are customer behaviors and buying patterns evolving, but consumers now have more choices than ever before, so what advice do you have for retailers who want to get a leg up on the competition?
Brett: A retailer failing to plan the right way is planning to fail.
For example, if you’re still using spreadsheets instead of using digital technology in an online collaborative portal, you’re in for a world of frustration:
- Inability to plan around supply constraints
- Inability to analyze store sales data
- Difficulty planning for future demand
- Unbalanced inventory costs
Retailers who are thriving today can plan around those constraints and get the right inventory mix based on what’s available, and what they can sell at the highest margins.
Mary: I’d like to pick up on one of the frustrations that you mentioned, which is controlling inventory costs. How should retailers address their inventory challenges because that has a direct impact on product availability and service levels
Brett: You’re absolutely right, Mary. The right inventory mix, and effectively allocating that inventory across locations to drive the highest margin are crucial to retail success.
More retail brands are using inventory optimization, strategic promotions, and dynamic allocation to push demand for the SKUs with the most availability and drive the highest margins.
I like to say that the best ability is availability. As supply disruptions continue to impact lead times, the buying decision for consumers is frequently going to come down to whether a retailer actually has stock to sell.
While this can be of less importance for brand owners with no immediate competition for specific products, it is critical for general merchandise, especially goods retailers, to ensure that they have modeled the supplier substitutions into the global supply chains and budgeted for appropriate inventory levels across redundant supply chain channels.
Next, is a focus on fulfillment. As another component to availability, the convenience factor of optimal order fulfillment is an increasing priority when consumers make a buying decision.
Opportunities exist today to challenge Amazon when it comes to online orders and thinking about stores more like hyper-local fulfillment centers for the buy-online/ship-to-home-type orders that can be key to changing purchasing patterns in a retailer’s favor.
To accomplish this, companies must ensure fulfillment demand is the driving force for inventory optimization at the store level, and not strictly sales demand.
Mary Vasile: All right, so you heard it here, retailers. Invest in digital planning, leverage inventory optimization and focus on order fulfillment to maintain product availability. Thank you for providing those insights for our viewers, Brett, and thank you for joining us today.
Brett Bever: Yep. My pleasure.
Mary Vasile: Thank you for watching. Now you’re in the loop. See you next time.