Essential Retail (ER): Describe the perfect modern retail merchandising process. What key elements are retailers are looking to bring to their respective businesses, to ensure they run smoothly?

Peter Charness (PC): The perfect process starts with understanding the customer's needs and requirements and ends with the customer enjoying their next purchase. In between is a symphony of coordinated and synchronised activity between buyers, planners, designers and suppliers, all focused on the creation and delivery of the "next great item", as part of a great collection. The key elements – inspiration supported by rigorous process and sophisticated software that creates a repeatable process of understanding customer preferences, planning business and collection requirements, and supporting the entire concept to customer lifecycle in ever tightening timeframes. 

ER: How should buyers and merchandisers be working together in modern retailing?

PC: Both are focused on the same goal, delivering great products to customers, but each comes at it from a slightly different angle, the "yin and yang" of product development and delivery. Their skills are complimentary, the buyer more focused on the elements of the product, look, feel, style, presentation, the merchandiser on the more financial aspects, quantities, pricing, delivery phasing, fixture fit and fills. Working together the merchandiser supplies the buyers with the assortment plans, facts and figures of the collection, while the buyer fulfils and adapts the plan requirements based on fashion trends, design and development and supply capabilities.  Working together they can create customer focused assortments that satisfy the needs of the customer as well as the financial goals of the company.

ER: Over the last decade, what has been the single biggest change to the way retail supply chains operate, and how would you rate retailers' progress in adapting to these changes?

PC: The largest change relates to the complication of creating very targeted and localised assortments (which require creating more and varied product offerings) doing so at prices that need to be even more competitive, and most complex, going from "concept to customer" with lead times  that are tighter and tighter, right down to repeating best sellers within a six- to eight-week selling season. There are certainly some bright stars who have made great strides in this direction, but the number of retailers who have the tools and processes in place to manage this complex and short product lifecycle in a successful and repeatable fashion season after season are in the minority.

ER: How has TXT helped retailers update their inventory management and planning? What case studies do you have of helping a retailer achieve measurable results in this space?

PC: Our 'end to end' planning solutions encompass the full spectrum of activities involved with planning, designing, delivery, and managing the assortment through every stage of its lifecycle. They help retailers decide what to stock in their selling locations, which products to select, deploy and sell across multiple channels.

Fat Face, the UK lifestyle clothing brand, has implemented TXT Retail's merchandise and assortment planning solution to support its fast-growing retail enterprise. TXT Retail's merchandise and assortment planning solution provides Fat Face with a collaborative planning environment that balances strategic goals with merchandise plans to identify ideal product mixes and volumes. The system plans ranges tailored to customers, depending on a particular store's profile and available space. "Our biggest stores might have a hundred bays to be stocked, whereas the smallest stores only 18," said Nick Stevenson, head of merchandising at Fat Face. "A great benefit provided by the system is that it allows us to plan ranges taking into account that variety."

Fat Face has allied with TXT Retail to aid its international growth strategy

A season ahead, the software is initially used to construct high-level financial plans. Next, based on analysing historical data and knowing what typically sells, where, and when, these objectives are automatically broken down into weekly stock, profit and sales targets. Finally, the Assortment Planning software builds a detailed plan of what every store, or channel, should stock and how many of every item to buy.

Assortment plans are now specific to each store grade. This, said Stevenson, was very difficult to do without dedicated software.

"TXT Retail's software gives us greater visibility and foresight in the planning process, helping us always provide a consistent product assortment across a growing business, no matter which channel the customer is using."

ER: One single view of stock is the ultimate dream scenario for retailers. What will it take for the majority of companies in the industry to achieve this position?

PC: There are a number of system changes required to make inventory "fungible" across all channels, including the ability to plan and manage the dynamic supply chains, and fulfilment chains required to operate in this mode. While a single view of stock is much talked about these days, the basic requirement is to plan and manage inventory with increased agility so that this single largest investment for any retailer can be optimised, deployed wherever and whenever the customer wants to shop and pick up, all while being  managed to the most profitable outcomes.

ER: How do you expect the global retail landscape to change over the next five years?

PC: As shopper's choices and flexibilities to find, compare and purchase products anywhere become greater and greater the power in the retail channel moves to the brand owner, to those who can create great products and collections to build customer loyalty. For differentiation retailers are going to have to offer unique collections through either private label, exclusive products, or highly curated assortments. The days of success in retail of displaying the same product as any other retailer (with cyclical promotions) being a success story will come to an end.

TXT Retail is a confirmed gold sponsor for the Buying & Merchandising Summit 2015, which takes place at London's Cavendish Centre on 22 September.

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Buying & Merchandising Summit 2015