The Art and Science of Retail Planning
By David Dorf-Oracle on Apr 23, 2014
Long before the sales are rung-up, a retailer's success or failure is determined by the decisions made during merchandise planning. This occurs at both the strategic level, where budget and space are considered, and at the operational level, where the exact SKUs to be carried are determined. While its extremely difficult to predict what consumers will buy, sophisticated forecasting helps to predict the likely outcome of stocking particular products. Buy too much product and you'll be marking it down at a loss. Buy too little, and your customers will head for the doors empty handed.
The days of using spreadsheets to plan assortments has given way to retail-specific tools that facilitate decision making at various levels within the product hierarchy and the ability to analyze and tailor assortments using attributes reflecting consumer preferences. This ensures planners, buyers, and category managers can manage the millions of SKU/store combinations that arise for localizing assortments to fit the varying communities of shoppers.
Forrester Research, Inc. recently evaluated the 11 top retail planning solutions vendors using 80 separate criteria in its report entitled "Forrester Wave™: Retail Planning Solutions, Q2 2014.” The entire report can be found here, but you can assume I wouldn't call it out unless Oracle did extremely well.
Oracle Retail's merchandise planning and optimization solutions are centered around a powerful multidimensional datastore, a so-called no-SQL database, that is highly configurable and able to process large volumes of data. This platform embeds the retail science that helps retailers make the best decisions while planning their merchandise. Additionally, release 14 marked the debut of a new dedicated science engine that offers additional algorithms like Customer Decision Tree, Demand Transference, Advanced Clustering, and Market Basket Analysis.
Whether its grocery, fashion, specialty, or department stores, the planning process is crucial to delivering on consumer expectations. Choosing the right toolset to complement the art of retail with advanced science has never been more important.