Because each firm has its own strategy and style of doing business, retail planning is a highly wide and subjective phrase. However, there are 5 critically constant things that every retailer needs to know when planning a retail business.
Keep the store inventory balance
Retailers should keep in-store stock to a minimum to avoid inventory shortages, which can result in higher storage costs and obsolete items. Retailers are forced to introduce discounts as items become outdated, reducing profit margins.
Balancing on-hand inventory is critical for brick-and-mortar retailers, which frequently lose sales to eCommerce companies that offer lower pricing. While keeping on-hand stock levels low may increase the danger of stockouts throughout a company’s locations, it still may boost profitability if retailers run it correctly.
Stabilize merchandising inventory for retail planning
While there are various external factors that might impact demand, the three key aspects that merchants should consider when merchandise planning are payroll, work settings, and climate.
Dick’s Sporting Goods, for example, has discovered that cold-weather gear sales increase throughout the winter months, but light sportswear sales increase during the summer. This may be a concern in years with extremely warm winters since things left on the shelf until April may become obsolete. This would limit not only shelf space but also profitability, and it became a lesson for other merchants to learn.
Harmonized channels of fulfillment
To compete with huge corporations like Target and Walmart, many firms are moving to numerous sales channels for retail planning. They are adopting an omnichannel retail strategy. These merchants provide a variety of order fulfillment options, including online purchasing and in-store pickup.
Additional personnel is needed for in-store and curbside pickup to rapidly gather merchandise in time for the scheduled pickup. Workers must also be present at the counter, ready to deliver the order to the customer’s vehicle.
Align your business with the supply chain
To increase profitability and avoid supply chain interruptions, retailers should negotiate inventory pricing and contracts with manufacturers when working in retail planning.
Businesses may guarantee they regularly satisfy shifting demand by building solid, symbiotic partnerships with numerous providers. Customers’ demands are never predictable, and raw resources such as palm oil, crude oil, and aluminum are growing more expensive. As a result, many manufacturers are forced to raise their costs in order to maintain profitability, resulting in higher procurement prices for retailers.
Retailers, on the other hand, can coordinate their inventory demands with the supply chain to sustain sales and profit margins by negotiating contracts.
Use integrated technology
Businesses can precisely estimate their procurement demands with current technologies, like management software when working on retail planning.
Retailers may acquire reliable real-time stock data by improving business intelligence with inventory management, ordering, and demand forecasting tools. This allows managers to make rapid, data-driven choices, allowing them to be more flexible and responsive.
Merchants may examine historical and real-time data to understand the financial effects of each step in their merchandise planning by integrating management systems. This high degree of capability allows companies to optimize their ordering, pricing, and procurement methods in order to increase profits.
Businesses may design the most efficient retail planning strategies that complement their consumers and goods by knowing various retail operations. So to get more practical advice on this matter, call us now to figure the best solution for your business.