Years ago, the year 2020 sounded very futuristic. Indeed, many corporate strategies were developed with “2020” in their title, no doubt to demonstrate how forward-thinking these companies hoped to be.

Yet here we now stand, almost three years past that notorious timestamp. And Parker Avery teams have still recently walked into the offices of billion-dollar retail clients to witness green screens and DOS prompts, along with a myriad of disparate, complex spreadsheets.

In that light, do we feel like “the future” is here in retail? Does it seem futuristic now? In some areas, yes. In other areas, not likely. Certainly, the COVID-19 pandemic propelled many omnichannel capabilities forward (albeit not initially perfect but they did keep the lights on). Unfortunately, for many retailers, other strategic capabilities are still rudimentary.

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The more important question regarding capabilities is: Where does it matter to be further out into the future? Where is good “good enough,” versus where should leaders be the Amazon compared to the competition’s AOL? Let’s look at key capability areas retail leaders must prioritize as we head into 2023.

Assortment Curation (planning and clustering)

Driven by the focus on “the last mile” order fulfillment and intensified consumer product demands, capabilities supporting assortment planning and store clustering must optimize what you offer and where your products are to meet your shoppers’ need for instant gratification. This involves:

  • Blending the classic art of the assortment with data and advanced analytics
  • Expanding and focusing on product and location attributes
  • Instilling elements of sustainability and diversity into assortment and product development decisions

Product Development

With consumer trends changing as quickly as technology, speed to market is critical. Despite this, many brands continue to use a myriad of spreadsheets and aged, disjointed retail legacy systems to manage product development. Forward-thinking retailers should investigate modern product lifecycle management (PLM) systems that can provide capabilities to:

  • Enable speed and efficiencies throughout the product development process
  • Utilize 3D/virtual capabilities for sampling and testing, adding speed and efficiencies and reducing the need for overseas buying trips
  • Tightly integrate product development and assortment planning processes and tools

Merchandise Financial Planning

Taking nothing away from the importance of a strong merchandise financial planning process supported by a modern solution, some of the concepts, functions, and approaches have not changed much in years. Preseason planning and in-season OTB management need to be in a common solution with agreed metrics and consistent process and cadence. Role alignment and management of the plan between buying and planning is key. The most recent focus is ensuring planning supports omnichannel capabilities—meaning the ability to plan sales, inventory, and margin by channel and utilizing analytics to understand and capture demand.

Allocation and Replenishment

Over the past couple of years, leading allocation and replenishment applications have received tweaks and enhancements. If you implemented a new system in recent years, you are likely ok. However, some caveats include:

  • Forecasting systems and approaches have improved dramatically in recent years. Depending on the environment, allocation and replenishment solutions benefit from a modern forecast at the appropriate level of detail. Further, to most optimally manage both processes and address supply chain variability, the forecast needs to be managed regularly (not “set it and forget it”).
  • Integration is critical for both, for up-to-date information on inventory, orders, and sales. While clean integration is always a challenge, an advanced layer of integration is needed to account for true demand across multiple transaction and fulfillment channels.
  • Some retailers are blurring the lines between allocation and replenishment. Rather than categorizing a product as either allocation (fashion/seasonal) or replenishment (basic), they think more in terms of the product lifecycle. Meaning, a product may move from one to the other over time. Being able to do this in one versus multiple systems can be beneficial.

Enterprise Intelligence (bridging data, analytics, and the business)

Analytics should no longer be viewed as behind-the-scenes data science magic, but an enabler for true enterprise intelligence and agility. For any retailer to truly take advantage of advanced analytics solutions that have recently penetrated the retail technology landscape, the business must migrate away from siloed operations. They must understand and embrace new ways of working and collaborating, driven by analytic tools that support and promote transparency and efficiency. Further, the analytics focus must dig deeper into the retail organization to take advantage of insights around demand planning, merchandising, assortment planning, inventory management, supply chain, and more. A focus on leveraging existing data and systems is paramount. Begin by:

  • Taking inventory of your current analytic capabilities to determine what you may be able to further leverage and identify gaps
  • Understanding and cleansing existing data
  • Growing what you do not have (e.g., extended attributes, external data sources)
  • Emphasizing business processes that leverage existing and new analytic capabilities to drive collaboration and efficiency

Customer Service and Experience

Of course, regardless of your business model, value proposition, or capabilities, the customer must always remain at the forefront of every retailer’s vision and strategy. With today’s consumers more connected, informed, and fickle than ever, forward-thinking focus and resources absolutely must target:

  • Delighting the customer with enhanced in-store and omnichannel experiences
  • Ensuring available inventory with various order management and fulfillment options
  • Augmenting loyalty and promotions

Taking a glance at the above discussion points, it is highly relevant to talk about navigating continuous disruption, managing change, and handling general retail chaos. While such a conversation may seem unrelated to the more solution-based capabilities above, the leadership ranks of any retail company must be committed and engaged in new ways of thinking and operating if they expect to remain competitive in the future. Further, with increased diversity of age, gender, ethnicity, and so on, today’s modern workforce needs to be increasingly resilient and adaptable to constant change. Best practice retailers will ensure their management is able to confidently lead through change, support their teams through disruption, and foster ongoing, sustainable learning.

Like it or not, the future is already here.

If you’d like to explore your company’s readiness for the future or need help developing a capabilities roadmap to prepare for 2023 and beyond, we’d love to talk.

Author

Clay Parnell, President & Managing Partner

Clay Parnell
President & Managing Partner

The Parker Avery Group is a leading retail and consumer goods consulting firm that transforms organizations and optimizes operational execution through development of competitive strategies, business process design, deep analytics expertise, change management leadership, and implementation of solutions that enable key capabilities.

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Published On: September 14, 2022Categories: Capabilities, Clay Parnell, Retail, Retail Advisor, Roadmap