PAID FOR POST
As we reach the midpoint of the trading year, Board’s Matt Hopkins asks Better Decisions Group’s Tom Owen to evaluate how a trio of predictions are manifesting across their customers’ experiences and engagements.
At the start of 2024, we anticipated three core themes that would shape the retail landscape: volatility driven by consumer confidence, supply chain disruptions necessitating adaptive retail models, and a heightened focus on purposeful retailing.
But six months on, how are these playing out?
1. Volatility and consumer confidence
We predicted that uncertainty would play a significant role in retail planning this year. What are you currently observing in terms of market volatility and consumer confidence?
From a strategic perspective, we are seeing retailers tightening their stock cover targets and reducing how much they are committing to with suppliers. This can be a trade off on revenue of overperforming lines, but can limit their exposure across the range.
From a solution perspective, we are seeing a huge amount of focus on functionality around scenario planning and versioning.
2. Adaptive retail planning
Understanding, anticipating and planning for the main challenges is crucial for retail success this year. What are the key constraints that stop retailers planning more effectively and efficiently?
There are two main constraints: one is data and the second is the tools to analyse, plan and act on that data.
Disruptions and issues are constant and to be expected; the best businesses we see have the tools ready and able to deal with them. If a retailer is planning in excel and suffers a large disruption, the work involved in re-planning can often mean the reaction is just guesswork.
Mapping out data structures, creating data warehouses or data lakes and then connecting planning tools to those is crucial to efficient and effective decision making.
3. Profitability and control
In such a dynamic landscape, maintaining profitability is paramount. Where are retailers concentrating their efforts to achieve better control over profitability?
It all comes back to core retail. It is critical to buy the right stock (assortment and range) at the right time (MFP and WSSI) and in the right place (allocation and replenishment).
I think mid and small retailers are now understanding they also need solutions for these aspects and that both growth and profitability are reliant on doing them properly.
You cannot make these decisions without the data and solutions in place.
• Download ‘2024 retail predictions: 3 things you need to plan for’.
Matt Hopkins is head of retail solutions marketing at Board.
Tom Owen is UK managing director at better decisions group (bdg).
