Radhika Verma, 29, walks into a retail store and comes out after buying five more items than what was on her list. The next day, she walks into another store of the same retailer and walks out empty handed, without buying even a single item on her list. Let’s assume that this second store was close to her workplace and she was hoping to rely on it. Yet she didn’t get the service she got from the other store of the same retailer. Contrasting experience- why?
For most retailers nowadays, retail planning consists of two or more elements among Enterprise Planning, Category Management, Demand Planning, Allocation and Forecasting. But complete retail planning is a package of all these things. Retail systems cannot run smoothly and efficiently with one or more components of retail planning missing. Effective collaboration of planning solutions can help retailers reach their omni-channel retail goals with ease.
Elements of Retail Planning
Reliable Forecast: It all starts with a forecast that you can trust. Depending on history, trends and season, developing a view of what the future is going to look like every quarter or every year is the biggest challenge for retail planning. If the forecast goes haywire, no amount of planning, good products or sales staff capability can pull it through.
Right Plan: Everything is right when a right plan is in place. Store management, demand management, allocation and category management along with other aspects of retail planning would devise a unique and competent plan suitable for the retailer. If such a plan is up and running for a retailer, then all mechanisms of a retail chain are bound to work seamlessly. It is necessary to pick and use the solutions that suit you best depending on the size and type of business and products you handle.
Right Products: Driving business growth and earning customer loyalty does not come from stacking the shelves with random products or all bestselling products. The stock should be decided by customer needs and preferences. The products on the shelves of the store should be the right products. That is why product planning is an integral part of retail planning. Retail chains are spread across widely, the need and preference of one locality will vary from the other. It is important to have products that suit the localized and seasonal demands of every customer location.
Right Placement: Fresh arrivals of trendy jeans at the casuals section’s first row, because most of your customers are fashion conscious young people. Similarly jams, cheese spreads and butter along with the row of bakery products. So that when a customer is buying bread, he/she can easily reach for them as well and increase your cross sell. Similar market basket analysis and planning for right placement of all your goods would end up making your business grow and customers happy every time they visit your store.
Effective Promotion: How to sell and to whom? Knowing your target customers and planning promotions accordingly, based on timely forecasts will bring in revenue. Effective promotions across channels will provide customers with the knowledge that they need, spark interest about a product and bring in business. Without effective promotional planning, retail planning is incomplete, as the most important part of every business is to lure customers in.
Importance of Retail Planning
i. Have the right impression on your customers when they shop from you. Striking the right impression is as important to regular customers as for new ones. Good planning can help you achieve this with right places and at right times across all channels without glitches.
ii. Keep customers happy with consistent performance. Loyal and regular customers are the backbone of any business. With better retail planning, you can better understand their changing needs and retain them better.
iii. Helps in understanding the market and customer demand better.
iv. Builds brand image by enabling consistent delivery.
v. Smooth operation and optimized services.
vi. Increased revenue.
vii. Gives a competitive edge.
vii. Helps in implementing successful Omni-channel practice.
Retail Planning to Avoid the ‘Disconnect’
If customer centricity is what makes your business, then customer disconnect is what breaks it. Take a look at Macy’s, Inc. mission statement “Macy’s, Inc. clearly recognizes that the customer is paramount and that all its actions and Omni-channel strategies must be directed toward providing a personalized merchandise offering and shopping experience.” It highlights how important it is to make the customer feel connected with the retailer through a personalised service. Without effective retail planning in place it becomes difficult in planning and implementing retail strategy aligned with your mission.
Effective retail planning is the bridge between the two ideas: What is your store about? And what are your customers about? Successful business plans needs to be based on the consolidated answers to these questions, which retail planning helps to derive.
Retail Planning Solution Criteria
There are many retail planning solutions available in the market, while choosing which one is best for you, keep the following points in mind:
Visualisation: Decision making becomes easy with dashboards of data visualisation. It helps in planning effectively if the solutions can be visualised.
Customer centricity: Whether the focus of planning is the end customer or not.
Collaboration: Whether the solutions are working seamlessly to facilitate collaboration among departments working in silos.
Automation: Whether the complete process of retail planning would be automated or not once all the solutions, depending on your need are in place.
Real time: Whether the system can process real time data and based on that can generate insights to solve business challenges.
Integration: Check what you are missing from existing systems, pick solutions that can be combined with them for better results at low costs. It’s a better alternative than changing the system completely, which can be costly and time consuming.
Retailers are looking forward to bringing about dynamic changes to businesses and operations in order to lure more business in and stay ahead of competitors. Strength of employee staffing and gaining loyalty of customers with grand promotions and lucrative offers is not enough to sustain growing omni-channel efforts. The need for seamless operations and up to date information system of the store to deliver better customer experience increases day by day. Effective retail planning solution will help build a better system from start to end where the retailer can stay connected to the pulse of the end customer.
Authored By: Sunil Bajaj, Director- Retail, Aspire Systems