In retail, the holiday season is the biggest—and most intensely planned for—sales period of the year. According to research from the National Retail Federation (NRF), 2017’s Thanksgiving weekend shopping alone resulted in more than 174 million American shoppers, which surpassed the 164 million estimate from the NRF. The majority of these shoppers, 64.6 million, took advantage of both in store and online specials, spending $82 more on average than an online-only shopper and $49 more than an in-store-only shopper. These multichannel shoppers will continue to be key for retailers this holiday season. As the close of the 2017 holiday approaches, this is a good time to reflect on this year’s plan and look at how to up your game next year.
This hectic time of year is becoming increasingly complex as shoppers’ ordering and delivery options widen, and their expectations grow.
“Much of the challenge is having the right inventory available to quickly fulfill customer demand, no matter when and where they make a purchase,” said Jeff Warren, Vice President Solution Management, Oracle Retail. “Retailers need to ensure that all of the factors impacting demand are taken into consideration when they purchase, place, promote, replenish and fulfill inventory.”
Critical Success Factor: What is the Deal Breaker?
In our annual consumer research findings, we can confirm that there are a couple of critical factors that determine whether a customer will shop for your brand. As always, out-of-stocks can be a problem. Over 43 percent of customers say they expect to encounter a stock-out situation in December, and more than three-quarters say they have left a store when they couldn’t find what they were looking for.
Furthermore, consumers shop differently when shopping for gifts than when shopping for seasonal items like decorations: sometimes price is everything, sometimes it’s no object. As the father of three young children, my wife and I are self-proclaimed Dealers. For toys, the price and promotion are the draw for our holiday shopping. And we are marathon runners, so watch out.
Holiday shoppers are complex and may mimic multiple shopping behaviors. Retailers can now understand how they respond, at a localized level, for every item when you factor in the effects of promotions, seasonality and weather to your forecast.
By the way, Oracle Retail Cloud solutions reflect your unique demand drivers, including holiday events, different promotional vehicles, and discounting types. These solutions incorporate seasonality, and account for lost sales due to out-of-stocks.
How you ask? Holiday items are new items, and modeling new items for forecasting increases the speed at which you can leverage and forecast your own processes. Specifically, attribute-based recommendations provide a high level of automation, and explicit like-item definitions give you high control. The new release features multiple new-item forecasting methods, including a method oriented around product lifecycle that works very well for short-lifecycle holiday items.
Here is another cool feature. As a Minnesotan, we don’t need to predict the weather. It’s cold and we are tough. However, in other parts of the country weather can have a dramatic impact on demand during the holiday season, and can also introduce noise into the historical seasonal patterns used for forecasting. A weather-driven demand tool from Planalytics, the leading provider of weather-based analytics, is the insight that Oracle Retail solutions incorporates for weather forecasting that will influence sales.
Critical Success Factor: Single Source of Truth
Retailers should be driving the enterprise with a single forecast that includes everything from replenishment and allocation to pricing and promotion decisions, planning, and venture collaboration. Oracle Retail allows you to estimate historical demand of past years’ sales and promotions to help predict seasonality on the future. The solution also provides both high automation and high control by automatically re-forecasting every item location and intelligently layering any user adjustment onto the latest generated forecast. By using a combination of statistics, optimization, and machine learning methods, retailers are able to maximize the accuracy of the seasonal forecast.
Additionally, the embedded data science and automation capabilities increase visibility across all channels and automates 80 percent of manual forecasting, planning, and replenishment processes. The solutions make it possible to improve overall sales and margins by 5-7 percent, while reducing overall inventory spend.
We’ve been forecasting for a long time and have been successful at over 160 retailers.
Some proven customer successes worth noting:
Like all major Oracle Retail offerings, I am pleased to confirm that the planning and optimization solutions are available as a cloud service. Major benefits of moving to a modern cloud solution are the multi-layers of security your data receives and the ability to scale at a faster pace. Since it is designed to be secure at every layer – application, platform, infrastructure and physical – the cloud reduces risk, while increasing your speed to innovation.
Other Related Resources: