“Failing to plan is planning to fail”. Planning is one of the most crucial aspects as far as a business is concerned. For companies in the retail industry, who cater to a highly dynamic target audience, forecasting the demand and market trends could prove to be a tricky task. Most companies in the retail industry face stock-out or over-stocking situations due to the lack of an appropriate merchandise planning process. Merchandise planning is a systematic process that is aimed at maximizing the company’s ROI by carefully planning the inventory levels and sales to improve profitability. This effort also ensures that the merchandise is available at the places, times, prices and quantities that the market demands. Merchandise planning also goes out to solve some of the major retail industry problems such as stockouts or having excess stock after the season has ended. Often, a retailer’s merchandise planning is greatly influenced not just by the past demand and quantity of data but is also affected by new trends in the retail market. Following are some of the key merchandise planning trends in 2018:
Demand for new, better, and personalized products
With a large number of options available to customers today, there is an increasing demand for improvised and better products. Retailers are now required to provide larger assortments through multiple channels. Due to these additional complexities, merchandise planning is slowly becoming an art that retailer industry companies must invest in and master. An appropriate merchandise planning initiative ensures that retailers do not alienate customers or lose potential sales by being out of stock of a hot-selling product.
Innovations and improvements
To stay relevant in the market, companies must ensure that they constantly improve and innovate their offerings. Modern customers tend to get bored and move away from brands that provide the same offerings over time. The more often an assortment can be revamped, the more loyal and frequent costumers will become. This emphasizes planning inventory and line plans. While undertaking merchandise planning, retailers need to be able to derive meaningful insights from product development and sales trend data to determine the product lifecycle and help buyers define a calendar for improvised and innovative launches.
Value for money
There are several players in the market that offer similar products and services, making it easier for customers to compare and opt for ones which give them the most value for money. Such situations go beyond product development teams to greatly impact the merchandise planning teams as well. This makes it necessary for retailers to have an intimate knowledge of the price points and promotions that have shown favorable results in the past while undertaking merchandise planning. It would help them maximize the sales and profitability they get out of their current and future assortments.
Customer feedback in product development
Most businesses today have realized the potential of social media by giving them leads, this is one of the main reasons why they are gradually taking measures to establish their online presence. Through these online platforms, retail industry companies are gathering valuable feedback from customers on how the product can be improvised. Companies are even offering customizable options to keep up with the customers’ ever-growing demand for personalization and individualism. When customers are allowed to design their own products, it helps track trends and analyzes recurring orders while undertaking merchandise planning. During merchandise planning, it is essential to derive meaningful data from customer feedback, apply it during the future planning process, and communicate the same to other functions to ensure they are in sync.
To know more about the challenges and steps involved in the merchandise planning process