White paper: A retail planning point of view

The guiding principles of successful modern retailing typically centre on managing customers' expectations and correctly managing inventory, according to a new white paper from planning and supply chain solutions provider TXT Retail.

Compiled by the vendor's SVP and chief marketing officer, Peter Charness, the article suggests modern retailers face significant challenges – both in terms of internal organisation and customer service – as a result of the burgeoning number of channels in which people can shop and due to the increasingly global nature of the business.

Some of the challenges for today's retailers, he argues, include products getting stuck in one channel when another channel could have sold it faster and with better margins. In addition, with multiple people in a retail organisation buying product ranges, companies are often missing out on economies of scale in manufacturing and shipping due to a non joined-up approach to inventory management.

Charness also says the evolution of omnichannel retailing has "fundamentally changed" the way retailers need to plan and execute, and it has resulted in companies operating in the sector talking of separate demand and fulfilment planning.

There are various strategies and end-goals to consider when mapping out these individual plans, but ultimately the path to success, according to the TXT CMO, involves following three key guiding principles.

Principally, he said, a customer commitment is non-negotiable, meaning "you better make sure" a product is available in the designated channel if a product is promised for a promotion, new store opening or web order. Additionally, inventory typically needs to be purchased with an end placement in mind, while "proper presentation and reasonable inventory investment" must go into a retailer's stores which in the majority of cases are still their primary source of business.

"A customer walking in with intent to shop for a product that was just clicked and collected by someone else, or leaving the store looking empty, is a lifetime of value lost for the entire business," Charness warns.

Read more from TXT Retail's Peter Charness in his white paper, 'Omnichannel: multiple inventory pools are good, but is one pool better?'. 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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TXT Retail

Buying & Merchandising Summit 2015