Developing a strategy and roadmap for unified Merchandise Planning and Allocation is now essential for success
New York, NY (PRWEB) November 04, 2014
7thonline, Inc., a leading provider of cross-channel demand planning solutions to the wholesale and retail industries, today announced Boston Retail Partners (BRP) has released its 3rd Annual Merchandise Planning & Allocation Benchmark Survey of over 500 retailers across North America. The study, co-sponsored by 7thonline, provides new insights into the current state, future plans, and best practices for retail merchandise planning and allocation—a critical foundation for retailers to achieve a “unified commerce” strategy.
BRP defines unified commerce as the elimination of individual channel silos to offer a holistic customer experience across all customer touch-points by leveraging a single commerce platform. BRP asserts that apparel, footwear, and accessories retailers have enormous opportunities in unified commerce, but adoption of mature technology and processes are required to capture those opportunities. While retailers are making progress in adopting technology, there is significant room for improvement, notably in cross-channel demand planning. Of all retailers surveyed, 89 percent undertake a formal process for merchandise and financial planning, which is up slightly from last year’s survey. However, 69 percent of retailers still maintain separate channel-specific inventory. Further, 68 percent of all retailers still rely on Excel or a homegrown tool to support complex planning processes, and only 25 percent of retailers use even basic business intelligence (BI) solutions for cross-channel merchandise planning. The industry recognizes the opportunity to adopt solutions that help optimize inventory and deliver a unified commerce experience: 69 percent of retailers are planning improvements in their cross-channel planning capabilities in the next three years.
The key to unlock unified commerce opportunities is adoption of processes and systems that are designed to support a truly cross-channel strategy. BRP’s survey finds that:
-- Effective assortment planning requires cross-channel data aggregation. Data silos prevent retailers from delivering a single brand experience. Sixty-four percent of retailers today still maintain separate channel assortments, and 34 percent of retailers cite channel data silos as their biggest pain point in achieving unified commerce.
-- Retailers must create unified demand forecasts. Only 8 percent of retailers are executing on a unified channel forecast, and 69 percent of retailers still maintain separate channel-specific inventory. Further, 24 percent of retailers have attempted to create unified forecasts but are not satisfied with the effectiveness of their processes and systems.
-- Best practices dictate employment of a comprehensive cross-channel merchandise planning, assortment planning, and store allocation platform. While retailers are attempting to integrate planning across channels, progress with mainstream systems is falling flat. Cross-channel integration has been attempted by 46 percent of retailers, but 35 percent of all retailers are not satisfied with performance. Specifically, 47 percent of retailers rate their current systems as “ineffective” or “difficult to manage” for cross channel assortment planning. Most of these systems are designed for a single channel and do not accommodate the unique planning requirements of eCommerce or wholesale channels.
-- Retailers have tremendous opportunity to unlock efficiencies with advanced BI solutions. Only 25 percent of retailers have a basic BI capability for cross-channel planning and allocation, compared to 79 percent using BI tools for single-channel planning. Further, 97 percent of data feeding BI systems relies on historical sales data, not current performance data or forecasts. This is a particular challenge leading to missed sales opportunities for fast-moving merchandise sectors such as apparel, footwear, and accessories.
-- Investments for improvement are planned. Top merchandise planning priorities for retailers are to enhance assortments (67 percent of respondents citing as a top priority), improve analytics (61 percent of respondents), and enhance merchandise allocation (50 percent of respondents). According to BRP, these figures evidence a growing appetite among retailers to rely upon technological efficiencies instead of increasing headcount.
“Unified commerce with real-time retailing is undeniably the new imperative,” asserted Ken Morris, Principal at Boston Retail Partners. “While technology has significantly advanced to support the unified commerce model of retail, full industry adoption of best-of-breed processes has yet to become a reality. Replacing legacy systems and realigning processes to support true cross-channel merchandise planning is critical. As acumen surrounding cross-channel initiatives continues to grow, retailers will find themselves in an opportune position to realize measurable benefits. Developing a strategy and roadmap for unified Merchandise Planning and Allocation is now essential for success.”
“As retailers move to satisfy today’s mobile-savvy, trend-sensitive consumers, they face a mounting challenge to optimize inventory and meet local demand across distribution channels,” said Max Ma, CEO of 7thonline. “Retailers can mitigate financial risk with solutions that deliver the ability to track merchandise performance and in-season trends across all channels. Migrating away from Excel-based and home-grown planning tools, or solutions designed only for a single channel, 7thonline customers gain complete demand visibility to support data-driven buying and markdown decisions, and to identify selling opportunities and inventory risks earlier.”
To learn more about how the apparel, footwear, and accessories industry is driving greater cross-channel visibility and allocation flexibility, click here to register for the joint BRP-7thonline webinar, “What’s in Stock for Fashion? New Boston Retail Partners Study Reveals Best Practices & Opportunities in Cross-channel Merchandise Planning & Allocation.” A free copy of the survey report is also available to registrants.
About Boston Retail Partners
Boston Retail Partners (BRP) is an independent retail management consulting firm dedicated to providing superior service and enduring value to our clients. BRP combines its consultants' deep retail business knowledge and cross-functional capabilities to deliver superior design and implementation of strategy, technology, and process solutions. The firm's unique combination of industry focus, knowledge-based approach, and rapid, end-to-end solution deployment helps clients to achieve their business potential. For more information on BRP, visit http://www.bostonretailpartners.com.
7thonline is a leading provider of cross-channel merchandise and assortment management solutions to the Apparel, Footwear, and Accessories industries. Deployed in the cloud or as enterprise software, 7thonline solutions enable more effective planning, demand forecasting, and inventory optimization for fast-growing, omni-channel, leading brands. With embedded business intelligence and rich analytics, the company’s solutions offer complete demand visibility and planning capabilities for wholesale, retail, and e-commerce—enabling increased sales, reduced markdowns, improved margins, and enhanced profitability. Customers include Calvin Klein, G-III Apparel Group, GRI Retail Group (Hong Kong), Michael Kors, Nautica, Oakley, Patagonia, PVH, Under Armour and VF, among others. 7thonline is headquartered in New York, NY and has offices in China. To learn more, visit http://www.7thonline.com, read our blog at http://www.retailplanningblog.com, and follow us on Twitter at http://twitter.com/7thonlineInc.