Post-COVID era
Retail is not a simple game of supply and demand. Consumers want everything and immediately, which is why retailers require technological tools. But, faced with limited budgets, the question is what kind of technology should be adopted to differentiate?
In the last 15 years, most retailers agree that traffic is the main limitation to predict in a changing world. Despite this, the successful ones are those who make it a higher and more useful average ticket.
Real time
For physical stores, the new online platforms are a greater challenge in terms of price and service compared to consolidated e-commerce, which also generates erratic traffic and impacts their profitability. This prompted a quick reaction to changes in consumer preferences and the scarcity of raw materials and labor that, in some cases, makes operations difficult.
Flow and supply chain management also generate delays and high operating costs, as long-term predictions are more challenging and forecasts often deteriorate, leading to unsustainable environmental costs of overproduction.
The full price trap
Although fashion seasons are planned in advance, I have noticed obstacles in their workflow. For example, styles, quantities and distribution take 6-12 months prior to the start of a season. But retailers know how difficult it is to sell all merchandise at full price. They only place 90% and the rest goes to the sales.
It is inevitable to end up with a high number of products on the shelves with the constant updates in stores. 50% of the assortment helps less than 5% of sales. Slow-moving products reduce shelf appeal and block space for new collections. In contrast, fashion also fosters “best-sellers”: fast-moving products.
The Treasure of “Other” Stores
In many stores there are bad products with incorrect designs and prices that, despite their great discounts, are left behind. However, most become “best sellers” at other stores and sell out quickly.
With the right algorithm to identify both types of products in real time and before the season starts, we could take steps to ensure that the right product arrives at the right place at the right time for sale at full price.
Technology to win the battle
Current trends demonstrate the importance of focusing on short-term forecasting and immediate decision-making. The ideal is to adopt technological tools and automate processes with the seasons.
The benefits translate into better sales and profits by allowing you to optimize replenishment, manage fast-moving items, slow-moving liquidation, and overall store assortment.
After working in retail for more than a decade and hundreds of conversations with international leaders, I am convinced that technology increases 5-10% sales per store, a 20% improvement in total price and performance can be accurately measured. and in real time.