When looking at modern fashion & luxury retail complexities, robust integrated planning and analytics are needed for retailers to keep ahead…
Recently, I had the pleasure of participating in a RetailWire webinar hosted by industry influencer and veteran journalist Al McClain (CEO/Co-founder, RetailWire). It began with an insightful summary of Retail Wire’s latest study, The Beating Heart of Digital Transformation, which was sponsored by Board and delivered by the study’s author, Ricardo Belmar. That was followed by a lively panel discussion involving McClain, Belmar, Patricia Waldron (Founder and CEO, Vision First), and myself. We discussed the study and its insights into where advanced planning and analytics tools stood amongst retailers and where these new-generation tools could further benefit retailers and maximize future return-on-investment (ROI). The executive summary of the study, available for download, proffered five key takeaways from the study.
The study showed that full deployment and leveraging of analytics, planning, and forecasting tools among retailers were still in their “early days,” apart from pioneering Business Intelligence (BI) applications. But the future of retail tech is set to change, as observed by Ms. Waldron. Noting my observations borne of 15 years-plus of retail technology experience and Belmar’s impressive explanation of the study results, Ms. Waldron said, “…it was clear that retailers are changing their perspectives and not just concentrating on the front-end of their digital transformation, those directly affecting the consumer. Now they’re looking at the back end, where they are going to make their biggest investments, to positively affect purchasing and delivery of products to the consumer.”
Specific to corporate, back-end, or back-office functions, the study asked retailers how their planning processes are handled across six different functional areas:
As we have seen in the study results, the two key areas most affected by the pandemic, which will benefit from leveraging advanced BI and Business Planning tools, are the Assortment Planning, and Allocation, Replenishment, and Logistics (or, rather, supply chain) functions. The Assortment area because retailers are still far from having optimized their offerings and are far from having done deep analyses of their Key Performance Indicators (KPIs) during the pandemic. This is evidenced by the low adoption of survey respondents to BI tools. There is a lot of new customer data emerging, so it is not a given that all that information and intelligence has flowed into a retailer’s software platform.
The second most critical functional area that could immediately benefit from a digital transformation is the Supply Chain. The effect of the past 15 months has underscored the importance of supply chains. For retailers to deliver the right product, to the right place, at the right time remains a huge challenge, and now, more than ever, if a retailer lacks advanced analytic tools to guide their decisions, inertia will result.
The study noted that BI adoption was high in Sales and CRM and Belmar sagely noted that this reflects that the retail departments with the greatest need – and budget resources – end up doing things, such as BI, first. “The other functions may need it, but at the end of the day, the real question is: which have the budget (to purchase and implement)? It’s often who owns the direct customer data (CRM) and the customer relationship (Sales) that see the benefits and become the early adopters that push BI deeper into the organization.”
Setting the context for this takeaway, Ms. Waldron educated attendees on some history. “Most retailers have processing systems in place; their merchandising systems, etc., already in place. And the reason that Excel became so embedded is that those systems were designed to process transactions, not to do analyses and planning; so, everyone ended up using Excel as their vehicle to do those transactions.” Now that newer, more flexible cloud-based systems are emerging, spreadsheets and the entrenched position they have enjoyed with retailers are clearly a hurdle to new ways of doing things.
I added that they need not be an insurmountable hurdle. The first thing to demonstrate to Excel zealots is how modern planning and Decision-Making Platform is no more difficult and may be easier to use than an Excel spreadsheet. They’re, in fact, very similar, both in their use and appearance. But where spreadsheets falter is where a BI and Planning platform shines, and that’s in fostering collaboration and showing everyone the overall workflow, putting everyone on the same page as it were. Effective decision-making is not a one-person show; it should be a synchronized, joint effort, and that goal can be enabled by these modern BI, CPM, and Workforce Management tools.
The second advantage to show doubters relates to simulation. Now, more than ever, in these turbulent times, management must simulate different scenarios concurrently and provide analyses of these situations as quickly as possible. That’s a difficult task for someone just using Excel files. Different copies of the same files, often-changing figures, and displaying the results of the changes is difficult if the application was never built to be agile (and as Patricia observed, spreadsheets were built to be transactional, not insightful].
If you want to run a simulation on, for example, replenishment factors in the supply chain or the effect on your forecasts of changing your strategy, a retailer needs a powerful calculation engine, one that can deliver the algorithms needed. Timing also comes into it. Is it hours, days, or weeks required to get results? BI and Planning platforms beat spreadsheets in the time race, hands down.
The study cited reasons why existing solutions, often Excel-based and employing primitive BI tools, are low. What retailers want and what advanced solution providers like Board can provide is a planning platform that delivers high management and user satisfaction levels. This satisfaction stems from allowing any permitted person to connect with all data whenever they need to and see all the possibilities with all this data and the KPIs visible. It’s all about enabling self-service so that anyone in the organization, whether at the office or working from home, can run their analyses any time. And by the way, there’s no contradiction between a dispersed workforce and having a stream of planning. A good planning platform makes this sort of process possible, with all contributing and all connecting in a synchronized fashion to make the right decisions. It’s not about the location that the work is being done at; it’s about having streaming, synchronized workflow, drawing from the same pool of data, nicely aligned, and delivering one version of the truth while avoiding misunderstandings.
Picking up on why satisfaction with the status quo is low, Ms. Waldron noted that in selecting advanced analytics and planning solutions, she advised her clients to determine whether the vendor’s tech stack is based on new technologies that embed flexibility and whether they can show past successes in one’s field. Citing my reference to ‘the art of the possible’ blueprints, she said that “A lot of times retailers don’t want to replace their Excel systems because they’ve become ‘secret sauce,’ so a vendor must convince them that it’s easy to get those processes into their offerings. Put another way, you want your vendor to understand your business.”
The panel discussion drew out many reasons for optimism about the size and rapidity of the digital transformation in retail. As Belmar noted, a big benefit of adopting BI, planning, and analytics is that it allows retailers to embrace distributed workforces and new ways of working, thus fostering more collaboration. “Collaboration is just an overlay to a spreadsheet, and spreadsheets can’t accommodate more complex planning and strategic decision-making needs. You really want to take advantage of these more advanced tools that dig deeper into your data, collect disparate data types that you want all to access with appropriate permissions. So, in a manner of speaking, these tools are democratizing access to information.” Belmar firmly believes that the new tools enable more people to participate in the decision-making process. That should lead to a retailer making better decisions, having better planning, better forecasting, better resourcing across all their functional areas.
Belmar is right. The results of using a better tech platform will speak for themselves. My conversations with retailers often begin with offering a proof-of-concept project, and that often immediately shows the platform benefits over spreadsheets. Focus on the many areas where adoption can be quick and results displayed quickly. Management must be assured that they don’t have to quickly and completely discard the way they were doing things before and jump into an unknown and mysterious platform. At Board, we begin most projects by transferring all the knowledge in existing spreadsheets while combing other data flows. The transition from spreadsheets doesn’t have to be fraught with drama, and showing the immediate benefits from adopting newer, IBP-specific platforms will help.
Prompted by an attendee’s question, I made that point that there was a silo-like pitfall to avoid. You see, once you’ve decided to replace the old, the tendency may be to go out and assemble the seemingly best-of-breed software solutions for each functional area—for example, one for Merchandise financial planning and another for Assortment planning. In fact, that may create new silos, so the culture must change to have a holistic view, acknowledging the need for and ability to integrate planning across functions. The cultural change is to go from viewing sequential, one-step changes that beget other changes and instead look at the process as a continuous, united stream where different functions still make different contributions at different stages in the planning continuum but in a unified manner. That’s an important cultural change for retailers to successfully leverage the new generation of advanced planning and analytics platforms.
One way to get a sense of how retail and brand businesses manage their new digital initiatives is to look at the core platforms that make enterprise transformation possible. What platforms are they using for retail planning, analytics, and BI? How thoroughly are these processes integrated into departments and layers of management?
RetailWire’s recent survey, underwritten by Board International, got answers to these questions and more. See this live session, on-demand, as we highlight the results of the study and shed light on what platforms and processes retailers and brands are using, how sophisticated they are at using them, and what their plans are as related to further digital transformation efforts.
This exclusive report looks at how retailers have advanced in the integration and adoption of retail planning, analytics, and BI tools.