Don’t Just Satisfy Customers; Anticipate Their Every Desire!
One of our retail clients told me: “No one rewards you for merely satisfying customer demand. These days, you need to be three steps ahead . . . You must embed superior retail planing to anticipate their whims and desires!” “Finger in the air” techniques used to do the trick. In the old days, merchants created assortments. Planners allocated inventory. Marketers priced and promoted the merchandise. They used a lot of spreadsheets and intuition but little applied statistics.
Fast-forward a few years to today, and retailers need to up their game. They face increased competition from marketplaces such as Amazon and insights-driven online pure-play competitors — not least brands selling directly to consumers.
Forrester started looking at integrated, cross-channel retail planning systems, way back in 2014. We published the “Vendor Landscape: Retail Planning Systems 2017.” There’s a more detailed analysis of top vendors in the retail planning space in “The Forrester Wave™: Retail Planning, Q3 2017.”
“Digital” Contracted Product Lifecycles
Companies such as Zara publish collections every two weeks rather than working to a traditional seasonal cadence. This approach delivers great results, but for most companies, lacking superior planning, it risks increased forecasting, manufacturing, and logistics complexity. Our research aims to help other companies match Zara’s flexibility and to use data-driven insight to reduce logistical complexity.
Continuous Planning Has Replaced Seasonality
As the planning execution cycle contracts, the roles of “merchant,” “planner,” and “marketer” become less distinct. They use the same underlying model of demand to make continuous planning and execution decisions. We explored this trend in the “Retail Moves From Seasonal To Continuous Planning” report. Nike streamlined the process as part of its direct-to-consumer initiative. It acquired the continuous planning and execution engine Celect to drive superior agility and responsiveness.
Intelligent Technologies Will Help To Better Anticipate Demand
To compete with the choice and low cost of online markets like Amazon, retailers carry wider assortments. They diligently extend their supply chains to find the most competitive global sources of supply, yet customers still expect prompt local availability in their local stores and fulfillment centers.
Retailers have the odds against them as they gamble on what to buy, where to sell it, and what pricing and promotions are best. They need to load the dice in their favor by harnessing some new technologies. In this report, “Prepare For Blockchain In Your Supply Chain,” we analyzed how blockchain can transform your supply chain into a supply network.
More brands and retailers will acquire applications embedding machine learning and artificial intelligence to help them anticipate demand across extended assortments of short-lifecycle merchandise.
The Future Of Retail Planning Solutions
We continue our research into retail planning. Look out for our upcoming Now Tech on retail planning solutions later this quarter, as well as the follow-up report, “The Forrester Wave™: Retail Planning, Q1 2020.”
Want to learn more about our take on the future of retail planning? Please schedule an inquiry with me.