Analytics and artificial intelligence must be woven throughout retail demand management for retailers to continually improve their business processes.
Merchandise Financial Planning
- Merchandise Financial Planning is a high-level approach to setting an organization’s sales, margin, and inventory targets, without getting caught up in the lower-level details of the product hierarchy.
- MFP is an integral component of a demand management department where planners can manage an open-to-buy according to a defined calendar as well as plan multiple brands, channels, and currencies – all in one view.
- Without realistic and dynamic plans that can quickly adjusted to new data and market conditions, excessive material and labor waste is surely to occur.
- Often times, assortment planning is a tug-of-war between art and science. There’s the art, knowing your customers and being able to create a display that demands attention, and the science, looking at the assortment as a mix of numbers, algorithms, and statistics that guide decisions.
- Automate the process with assortment planning solutions that combine the art and science to give you the flexibility to get more in-depth assortments. Less data management and more rapid decision making.
Clustering and Profiling
- Continually introducing new items to market helps you keep up your competitive advantage. Predict the future demand for new products by using demand profiles.
- Create, manage, and evaluate demand profiles for historical products and then apply the profiles to new products to get an accurate picture of future demand.
- Take the guesswork out of allocating products to locations with allocation solutions that use rules to model performance criteria to determine the best placement of stock.
- Taking current stock, inbound stock, and need into account, these solutions quickly allocate inventory to locations to maximize selling potential.
- Pre-allocating stock increases warehouse efficiency by cross-dock of stock on arrival.
- Additionally, configurable allocation rules allow for managing different phases of the product lifecycle including new products, ongoing and pushing out stock for end-of-life products.
- Automate and create smarter forecasts that represent true demand and you’ll avoid poor forecasting outcomes like overstocks, product obsolescence and lost sales.
- For the most effective demand forecasting, you need true demand history, not just sales history.
- Identify periods of insufficient stock, which are then used to calculate lost sales. Get the full picture of what sales might have been had there been enough of the products in stock that your customers wanted.
Inventory Planning and Replenishment
- Inventory Planning ensures your products are in the right place at the right time. Not only that, inventory planning makes it easy to identify the inventory you need to focus on for higher profit margins and lower inventory carrying costs.
- Demand driven replenishment solutions produce a forward-looking, time-phased ordering plan that considers both the forecast of demand and the current inventory plan.
- Whether sourcing externally from overseas vendors or dispersing inventory among branches, create the most cost-effective ordering pattern to achieve your targeted service levels.
Promotion, Price, and Markdown Management
- By managing all types of promotions across all channels in a centralized system, you gain the capability to coordinate promotions across all departments that are involved in the process.
- Accurately plan future promotions, incorporate their impact into the overall retail planning process, and evaluate their effectiveness. The result is promotions that attract new and existing customers, increase revenues, and reduce inventory levels and marketing costs.
- Use price and markdown planning levers to drive store traffic, manage product lifecycles and maximize sales and margins.