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BOSTON — Many retailers are using planning applications designed for old retail business models and installed in the late 1990s or early 2000s. As a result, many retailers today are trying to meet the needs of a 21st century customer while constrained by 20th century technology.
A new survey from retail consulting firm Boston Retail Partners shows that two in three retailers (63 percent) plan to upgrade or replace their merchandise planning systems within the next two years because they are out-of-date and don’t effectively address the current requirements for an omnichannel environment.
As CSNews Online previously reported, more and more retailers are adopting an omnichannel strategy, linking the in-store experience with their company's website, mobile app and social media platforms.
“Stores are under siege from other channels and unfortunately are dealing with outdated and ineffective systems to address the complex planning process that is required in an omnichannel environment,” said Ken Morris, principal of Boston Retail Partners. “All of this negatively impacts the customer experience and, ultimately, sales.”
Boston Retail Partners’ 2015 Merchandise Planning Survey of top North American retailers offers additional insights into current planning initiatives, priorities and future trends:
- Analytics is the top priority: Nearly six of 10 retailers said improving analytics is their top priority for next year.
- Advanced analytics are gaining traction: Three in four retailers (75 percent) use advanced analytics for merchandise planning; however, fewer use advanced analytics for store planning (45 percent), assortment planning (40 percent) and omnichannel planning (20 percent).
- Integrated merchandising plans are not working well: While 50 percent of retailers have implemented integrated merchandising plans (financial plans, promotional calendars, planning teams and assortment plans), most of these retailers indicate they need improvement.
- Separate inventory across channels: Half of the retailers surveyed (49 percent) still maintain separate inventories for each channel.
- Social media use for merchandise planning is opportunistic: While 71 percent of retailers indicated they capture customer feedback via social media, only 23 percent are using social media for product planning.