Retail Industry Forecasting Efficiencies

Retailers are encountering significant challenges to their business model driven by consumer changing demands and retailers must accept the new reality that they (the retailers) are no longer in control of the consumer shopping and purchasing practices.  This new reality requires a serious evaluation of the consumer demands against the current retailer capabilities to define and prioritize initiatives to meet the changing new reality.  This is where inventory planning and forecasting should take a very high priority in the sequence of strategic initiatives.  Inventory planning and forecasting provides the bedrock foundation for retailers to meet the consumer challenges in a flexible and robust manner that meets the changing consumer demands and also, and equally important, provides a strategic direction for retailers to redesign and implement a delivery network that also supports the changing consumer demands.

Consumers are increasing demands on shopping and purchasing in an omni channel market where retailers support the ability to shop in one channel and purchase in another channel.  This foundational demand of consumers can be difficult if retailers do not change their view of both inventory and sales forecasting and planning practices to embrace this omnipresent view of inventory and sales.  This change is the foundation to build the retailer sales and delivery network and while it changes the business process dramatically it also simplifies this business process by treating the channel as a outlet rather than a separate business process.  This change allows retailers to view their inventory planning and forecasting procedures from a channel demand to a brand demand and this both simplifies and improves efficiencies of inventory consumption.

Retailers should first define the business process in the basic functional view without regard to the channel and then each channel outlet must be defined as a method to access the process and not a process based on the outlet.  This is not an easy task and requires a foundational redesign of the retail interaction with consumers.  This is critical however to meet the velocity and volume of change in the retail market driven now by consumers.  

Retailers can then use this change in their inventory model to drive changes into their brick and mortar store strategy to support the changing consumer demands for omni channel shopping and purchasing.  These retailers will be able to use the foundational inventory planning and forecasting redesign as a base for building a flexible and robust retail business model that supports the continuous change that is demanded by the consumer.  Retailers must build a model that supports and encourages change from the consumer to build the long term relationship with consumers that will drive their success.  There can be no turning back now and the response of the large retailers must not shrink to eliminate bandwidth, they must change the model in order to embrace and encourage the change.

And now for the audience participation portion of the show…

ECommerce will have wide ranging impacts on both the retail and manufacturing sectors.  How can you focus these abilities to improve the consumer's experience?  Improving the consumer’s experience will require a re-evaluation of the sales channels, the manufacturing channels and practices and the supply chain channels and practices from the raw materials to the consumers’ homes.  In order to ensure and maintain success in this new reality you must harness the tools and capabilities in many new areas.  How can you support these continuously changing requirements?