It’s nearly impossible to predict with 100% certainty the amount of stock that’ll be needed for a particular sales period. This is a difficult problem to solve because demand forecasting that does not use advanced analytics is not very precise. Perhaps the greatest risk a retailer faces when using approximate demand...
Whether losing sales to out-of-stocks, or facing overstocking costs and markdowns, inefficient stock replenishment has a huge impact on a retailer's GMROI. Meeting sales demand has always been challenging, effective replenishment should mitigate issues that arise from poor planning and allocation. Modern consumer expectations of inventory availability and fast order fulfillment mean...
Open to buy optimizes inventory efficiency Inventory makes or breaks retailers. Buying too much ties up cash in unsold stock and keeps you from ordering product your stores need. Buying too little reduces sales — and the cash you need for more inventory. Open to buy (OTB) planning lets you control...
Challenges in Demand Forecasting Leading to Lost Market Share The most stubborn, expensive issues retailers face are due to poor demand forecasting. Retailers who rely on approximated demand disappoint customers, bleed profits, and lose market share to more tuned-in competitors. Tackling the challenges in demand forecasting, however, is not easy. Spreadsheets and gut...
Bad inventory is an expensive problem Worldwide, retailers are losing $1.75 Trillion annually as a result of bad inventory. Managing inventory becomes exponentially more complicated as a retailer grows; and often becomes an overwhelming challenge. This issue is so pervasive in the industry it is often accepted as the status quo. So, a retailer...
A good retail pricing strategy is integral - but is it enough? Setting an optimal product price can be a challenging task in today's dynamic and data-driven retail environment. Missing the mark when setting prices can have a drastic effect on sales and the overall profitability of a retail business. Granted,...
Why Should Retailers Care about Product Cannibalization? Product cannibalization is often portrayed in a negative context within the retail environment - and for good reason. In most cases, it results in lost sales, decreased revenue and even retail business closures. What makes it unique is that even with all of these...
Why should retailers care about their Order Fulfillment Process? Order fulfillment may seem like a fairly straightforward process and according to the generic "high-level" definition, it is. Unfortunately, this notion of simplicity makes it easy for retailers to overlook the underlying importance of order fulfillment and the significant impacts and benefits...
Why does IT spending in the retail industry matter? The retail industry has changed. The recent global pandemic has accelerated retail's deep dive into digital transformation, forcing many retailers to upgrade and replace their outdated legacy systems and processes. The pressure for transformation is coming from all sides, as consumers expect...
Future retail growth and profitability depend on sustainable supply chains Sustainable supply chains are more than a buzzword (or simply public relations greenwashing). If you're paying close attention to the industry, you'll realize that sustainability in supply chains is not just advisable, it is the key to survival (and profitability) for today’s...
