How has the process for merchandise planning evolved over the last couple of years?
The biggest challenge facing retailers is the need to adapt to the changing market conditions and, specifically, how customers are interacting with them. Companies have realised that consumers want to engage with them in different ways, across multiple channels, so they’ve got to be able to evolve their merchandise planning accordingly – from what was a fairly stagnant planning process into a much more flexible one.
Omnichannel planning processes are nothing new to most retailers, but the Covid-19 pandemic rapidly accelerated the pace at which it needed to take place. A lot of companies, I suspect, thought they could take their time with this transition over the next few years, but they very suddenly had to change their processes overnight because of how the pandemic changed consumer expectations and buying behaviour.
In this landscape, what are the key challenges facing retailers in merchandise planning?
Retailers need visibility and flexibility, but that’s difficult to achieve when there are so many disparate systems involved in merchandise planning. They need to refer to a single plan across all areas of their business, so that when there is a change, every department is able to see it at the same time and react to it in harmony. There’s no point in the sales and marketing departments being aware of certain changes if the supply chain department is in the dark. It’s just going to end up as a car crash. Collaboration has always been the panacea for a better and smoother planning process, but now it’s an absolute necessity because the rate of change means things will grind to a halt without it – and visibility is an essential enabler of that.
Why is it important that retailers address these challenges sooner rather than later?
Already in the last few years we’ve seen a series of winners and losers. Retailers that saw the need to react to the closures in the stores and strengthen their digital footprints were able to keep their margins and turnover high. Now they’re seeing that their stronger digital footprint can support their physical stores, rather than replace them, and enable the omnichannel experience that customers desire. And now that consumers have this endless choice of how to buy, they are looking at who has the best-quality and most sustainable product. Retailers have to manage all of that with their supply chain, and those with visibility across their merchandise planning processes can react faster to changing needs, and will therefore retain and grow market share.
What advice would you provide to retailers that are looking to evolve their end-to-end merchandise planning process?
If you want to offer your customers a flexible experience, you need a flexible planning process. If you haven’t got technology that can improve your overall efficiency and speed to react to how customers want to interact with you, you’re going to be one of the losers rather than one of the winners. This is where Board’s decision-making platform for retail comes in. By unifying strategic, financial and operational plans, Board empowers retailers, including M&S, Max Mara, Reiss, and Kering Group, to adapt and evolve vital plans at speed. By turning data into insights, we help the world’s most innovative retailers supercharge their merchandise, assortment and replenishment capabilities.
Just like the retailers who support their customers, at Board we also make sure we’re there to support our retail customers. Companies that use Board’s retail planning technology can create the most sustainable product at the right price, enabling them to consistently optimise margins while still giving their customers exactly what they want. Showing that technology can absolutely affect the quality of your retail offer for your customers while maintaining your margins, is now within the reach of every single retailer today. Investing in one single connected retail plan, rather than lots of separate systems, is how to thrive in the years ahead.
For more information, visit board.com/retail
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