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63% Retailers to Replace Outdated Planning Systems Within Two Years


Omnichannel: It’s the strategy most retailers aim for and few succeed at. And according to Boston Retail Partners’ (BRP) merchandising planning survey, published Tuesday, that’s because many merchants are attempting to meet the needs of today’s shoppers while using systems installed more than a decade ago.

“Stores are under siege from other channels and unfortunately, dealing with outdated and ineffective systems to address the complex planning process that is required in an omnichannel environment,” Boston Retail Partners’ principal Ken Morris. “All of this negatively impacts the customer experience and, ultimately, sales.”

On the bright side, the consulting firm surveyed more than 500 North American retailers in September and October and found that 63 percent realize the issue and plan to upgrade or replace their merchandise planning systems within two years.

Another cause for concern: analytics. While 75 percent of respondents said they use advanced analytics for merchandise planning, only 45 percent use the tool for store planning and even less use it to organize assortment (40 percent) and omnichannel (20 percent).

“Analytics serve as an important tool in assisting retailers to find and interpret meaningful patterns in customer and inventory data to support decision-making,” the report said. “Insight into customer demand, price sensitivity, reaction to promotions, demographics and more are key to drive merchandise plans and actions that maximize profitability. This is especially critical in an omnichannel environment, as understanding the preferences of disparate customer groups across different channels becomes more complicated.”

For that reason, 58 percent of respondents said that improving analytics is a top priority for the next year.

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And while more than half of those surveyed said they have already integrated their planning processes, organizations and systems across channels, most said there is room for improvement.

“Pursuing an omnichannel inventory strategy presents retailers with the opportunity to break down organizational silos and take advantage of synergies across the enterprise,” the report said, adding, “The integration of planning systems across channels gives planners enhanced insights, which enable them to make better strategic recommendations with respect to price, promotion and inventory.”

Worryingly, 49 percent of retailers surveyed still maintain separate inventories and assortments for each channel, with brick-and-mortar and e-commerce teams largely operating independently from one another.

“To successfully meet the needs of an omnichannel world, the people and processes involved to support it are just as critical to address and the systems must integrate analytics with operational processes and solutions,” BRP concluded. “The imperative is to address these issues before disenchanting today’s ever more demanding customer.”