What are the key imperatives for retail leaders in 2023? Find out in this blog series! Each week, we’ll explore a new topic that should be top-of-mind for retailers.

Imperative #2: Build resilience

In the previous blog, the focus was on resetting profitability. Profitability is key for this year, but without resilience, growth will be limited.

Building resilience in retail requires an innovative approach to planning that simulates supply chain uncertainty and risk, models soaring inflation, rising interest rates, and volatile customer demand in existing merchandising and supply chain decision-making processes. However, resilient retail involves three things: contingency, risk, and speed. To begin this approach, it all starts with a new mindset…

The new mindset

It’s time to revisit the plan again…sound familiar?

You’ve worked long and hard on merchandising plans. You’ve crunched the numbers from last season. You’ve forecasted demand down to SKU and store level. You’ve built the mother of all optimal inventory plans. You’ve nailed down the perfect supply chain.

Everything is beautifully curated; a splendid tapestry! But, despite all the hard work, your customer has less disposable income, your logistics partners have no sea containers, and your warehouse operations can’t secure agency labor. The result? More exceptions and a bigger to-do list.

Having a resilience mindset will be non-negotiable in 2023. This means planning must adapt at the same pace as the market without growing the overhead of manual intervention and assumptions. For example, can you easily and quickly ‘stress test’ merchandise plans with the following scenarios:

• Where are my growth opportunities?
  • Do we know where, how, and from whom to pick up additional market share or gain a competitive advantage?
• Do we have enough cash to ride out more challenging times—or better yet, to invest?
  • Is this new assortment financially viable?
  • What would happen if we took a 10 to 15 percent margin hit?
  • Are we agreed on a plan and ready to act?
  • Are we organized and agile enough to respond quickly to changes in the market?

What does agility have to do with resilience?

Resilient retail is about dialing up speed and agility to quickly bring everything back to plan. The fundamental problem with slow decisions in retail is that they translate to costly delays, lost sales, unhappy customers, or too much inventory.

To accelerate planning cycles and decision-making, it is vital to break free of fixed planning cycles and allow stakeholders in inventory, sales, and margin to manage the plan at its natural speed without being tied to rigid planning steps.

Hardwire your planning to perform under conditions of uncertainty

‘Hardwiring’ risk and contingency into planning activities enables better outcomes throughout the decision life cycle while adding more effective scenario planning. The case for building resilience in retail is clear, starting with intelligent planning that allows retailers to bounce back quickly and potentially flourish, even amid global volatility and economic uncertainty.

Intelligent planning drives resilience

Intelligent transformation is the adoption of an automated, fact-based approach to planning. It includes state-of-the-art planning tools that solve traditional retail merchandising and supply chain challenges with data, automation, and collaboration. It additionally provides more intelligent ways of working to positively impact leadership, functional skills, and business partnering.

Through these new digital ways of working, intelligent transformation extends beyond traditional planning technologies, redefining how stakeholders collaborate, the organization’s approach to decision-making, and how management processes are conducted towards the enterprise.

Use the links below to find the other blogs in this series:

• Retail imperatives #1: Resetting profitability
• Retail imperatives #3: Continuous alignment