Wouldn’t you prefer to be in the ‘nothing holding me back’ camp? Particularly, when it comes to the core of your retail operations - your retail merchandising solution.
Recent findings in the 2018 RIS/Gartner Retail Technology Study focus on how digital transformation is impacting retailers and how leaders are responding with investments in innovative technology to keep up with the fast-paced change, while laggards who have delayed (or stopped) critical projects, continue to rely on manual and inefficient workarounds - and are paying a far greater price. Such laggards continue to report store closings and bankruptcy, like April’s announcement from The Bon-Ton Stores, a 121-year-old, Milwaukee-based, chain that will close its 256 department stores. So far in 2017, more than 3,500 store closings by major retail chains have occurred. Could investment in current retail technology have been key to staying ahead?
The retail laggards in this study have delayed advancing their technology and are likely using outdated, inefficient software and systems to compete in today’s drastically changing retail landscape. So let’s take a closer look at some of the technology findings in this study related to merchandise management systems.
It’s alarming that only 1/3 of retailers surveyed have real-time inventory visibility, which is critical to supporting today’s customer journeys, like buying on-line and picking up in store.
Replenishment is an easy way to step into automation. You can take out the guesswork of what to order to keep the right level of stock on hand.
Over 60% of retailers are pushing product to their stores using outdated technology. How much excess inventory is being allocated to stores? Where could you have sold more if you only had the items in stock?
Maintaining accurate pricing is key in building your brand. Customers expect to be charged the right price regardless of channel. Are you confident in your pricing capabilities? Are you able to create compelling offers for your customers and accurately apply them?
Almost half of the retailers in the study are not upgrading their trade promotion solutions – so is money being left on the table? Are you sure you are tracking vendor deals and rebates accurately and recovering income that could directly affect your bottom line?
What could be more important than making sure you have accurate foundation data to drive your retail processes? Without reliable information, you won’t be able to realize the benefits of planning, replenishment or any kind of optimization. Are you part of the 23% doing nothing?
So although it varies by category, this study reports roughly 30% of retailers have no plans to upgrade systems like item master data management, replenishment, allocation, price management and trade promotion management in the next 24 months or ever. Does that mean those retailers may be left behind? Will they be able to adapt to today’s retail environment?
Well retailers attempting to adapt existing solutions that have been modified repeatedly in the past, are finding it very difficult to attain the level of required accuracy. A retailer needs a fast, reliable, complete, and highly flexible merchandise operations system that is easy to use and that provides one version of the truth. Getting there often requires a new investment in technology and a renewed commitment to that technology investment. Achieving merchandising operational excellence is a major transformation – it cannot be optimized by just touching an independent variable in isolation – but it is worth it in order to build a solid foundation that will carry you through the retail evolution that is taking place.
Retailers that are looking to invest in their future, can turn to Oracle Retail's cloud-based solutions. One U.S. boutique fashion retailer recently deployed our Merchandising Cloud Services in just over six months. By paring this with Oracle Retail Merchandising Insights, customers are enabled to understand both current and historical performance for sales, inventory, pricing and more through the use of the pre-configured reports and retail specific metrics. One benefit to this is retailers can identify actionable merchandising opportunities across touch points, including backorder and returns, top/bottom seller, demand/fulfillment, and price and promotion analysis.
This aligns with the findings in this study where leading retailers identified analytics as a key strategy in the next 18 months, and Gartner expects that by 2020 retailers will be using artificial intelligence (AI) to speed retail decisions. We’ve seen through our own Oracle Retail Science applications that analytic tools tighten forecasts and improve productivity in ways that reduce expenses and discover savings by reducing inventory levels and improving promotional effectiveness.
Finally, in RIS/Gartner’s Top 10 Technologies for 2018 findings, 40% of retailers are investing in mobile devices for associates and managers as well as for managing in-store pickup and returns. Some retailers are leveraging such technology to truly enable associates to provide the best possible customer experience. Oracle Retail Store Inventory Management provides store associates with a simple and efficient solution that is tightly integrated with the merchandising system, ensuring inventory accuracy across the enterprise.
During this retail evolution, it seems clear that leaders will continue to see the value of innovative retail technology across merchandising operations, analytics and in store operations. They will use it to not only keep their brand in front of new and changing customer trends, but to maximize revenue opportunities and stay competitive. Now more than ever, survival means investing intelligently in a solid operational foundation.