As shoppers expect more connected retail experiences, businesses must take the appropriate steps to ensure their backend processes can deliver. Getting demand planning right can be challenging, but these four steps, along with the right technology, can transform your approach.
- Take a Deep Dive into Demand Analysis
The first step any organization must take in the demand planning process is determining what demand is projected to be — and that begins with the quality of your data. A clean data set yields the best, most accurate results so take the time to weed out any irrelevant, inappropriate or expired data. Doing so will put you ahead of the crowd. Nearly three-quarters (71%) of retailers lack a proper demand planning process, according to Boston Retail Partners’ 2016 Merchandise Planning Survey. Another 38% say they maintain brick-and-mortar inventory apart from stock for other channels.Using a retail inventory system gives merchants a holistic view of their stock across channels, enabling businesses to more accurately plan for demand across the board instead of channel by channel, which can become costly. When leveraged alongside a thorough analysis of sales history data, retailers can begin to understand the factors and variables that influence demand, from transportation reliability and access, to supply chain visibility. Is demand seasonal or steady? These factors make all the difference and affect how you should approach demand planning.
- Data Trumps Instinct
Gone are the days when your instinct was good enough to plan for demand. Today’s tools, such as a retail inventory system, are far superior in accounting for all of the factors that can influence demand, especially when multiple channels are involved. Leverage the wealth of data these systems contain to create an actionable forecast and manage costs.
- Track Your Progress
With demand planning, you can’t just “set it and forget it.” With regular review, retail organizations can reduce their forecast error, improving service delivery and keeping costs and inventory holdings closer to optimal levels. Be sure that stakeholders are contributing to the forecast on a regular basis: for example, the marketing team should be uploading information on planned promotions while the sales division should update customer details. By keeping tabs on your forecast and including up-to-the-minute changes in your retail inventory system, you can work towards the ideal planning outlook.
- Review and Adjust
Regular review of your demand planning strategy and progress will be useful in keeping the plan on track. Set recurring meetings with all appropriate stakeholders, including supply chain, sales and operations planning, and finance. Use the reporting data from your retail inventory system to determine what, if any, changes are required to improve the forecast.Accurate demand planning for your retail ecosystem will help any retail organization effectively execute its omnichannel strategy. By ensuring that the right products are available through the right channels at any given time, retailers can both manage their costs and satisfy customers. Retail inventory systems are an indispensable tool for creating a planning forecast to succeed in a multichannel world.