The stress of the 2013 holiday shopping season is behind us. Figures from NRF showed an increase in traffic during Black Friday, with 45 million shoppers online and 92 million customers in stores.
Despite the increase in shoppers, though, overall sales throughout the holiday weekend decreased. Shoppers’ average total transactions were $407, down from last year’s $423. This is tied to the heavy discounts retailers self-induced to help turn their struggling inventory. Take for example the frenzy that surrounded the heavily discounted 29-cent washcloth at Walmart. Profit margins on products which are as aggressively priced do not record gains.
Today’s shoppers are unpredictable, and behavioral trends of today may contradict those of tomorrow. This calls for an agile and adaptive supply chain to harness complete control. Retailers need to be both reactive and proactive to customers’ wants and needs, a challenge that many struggle to overcome.
In order to aggressively prepare for a shopping season, it is important to focus on the fluidity of the entire retail operation. By powering the organization to operate in one unified system throughout all of the stages of planning, forecasting and business intelligence, retailers create an environment that is harmonious and attuned to an ever-changing society.
Effective planning is imperative if retailers hope to turn strong numbers at the end of each season. With the proper analysis, an organization can smoothly operate and allocate the correct resources into the correct areas, keeping them on the path to profits.
Planning truly allows all of the merchandising gears and levers to properly turn, tracking trends and providing accurate measures of what is open to buy. This intuitive process allows for automatic purchase order creation based on hard numbers.
Tied seamlessly to planning, forecasting allows for well-thought-out strategies, in part by tapping into past sales trends. As we saw in results throughout the holiday shopping season, the number of people shopping increased, but deep discounts ate away at profit margins. This decline in profit margin left retailers uneasy and under immense pressure.
Those who were able to master their inventory effectively will not suffer. Those who had weak sales will continue to feel the pain through January and beyond as they endeavor to move goods that are waiting to be replaced by the fast-approaching spring season’s products.
Data has been on everyone’s mind lately. There is no shortage of questions being raised and an equal amount of ambiguity around the topic. Trends evolve and emerge rapidly, so being able to adapt with similar speed is imperative. Business intelligence is a strong tool that every retailer should have in its arsenal, powering decision-making from within the merchandising system.
As shoppers continue to become increasingly sophisticated, the reactive window for a retailer’s success shrinks. With one unified system that takes a retailer from end to end of the cycle, actions and reactions become much more meaningful.
The seamlessness that is created means everyone on the team is playing at the same level. While results may have been less than ideal this past holiday season, I strongly believe we will continue to see retailers adapting to the market in 2014 and evolving the power of a complete supply chain bound by one end-to-end solution.
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