Max Ma sat down with Mark Lack on Retail Voices, a podcast where leaders from the world of retail talk about what really works: insight, innovation and the human side of the industry. In the episode, the industry veterans break down the real reason retail planning fails and how AI is transforming processes. From dirty data and omnichannel distortion to guardrails and balancing the art and science of merchandising, Max and Mark’s conversation dives into the heart of what makes modern retail operations succeed. Here are a few key insights:
“If you could print one KPI on every planner’s wall, what would it be and what’s the most overrated or underrated forecast signal you’ve ever seen?”
Print this above your computer screen as a daily reminder: increase net margins by 1% every other year. The margin challenge is a depressing reality for the retail industry—low margins restrict budget for new tools, a lack of tools keep retailers guessing and stuck in the same cycle. A percentage boost may not be realistic year over year but striving for that improvement, even in small increments, is still a positive trajectory toward the bottom line.
The most overrated signal? Macrotrends. Businesses should look at their own data and microtrends to determine what they can conquer first. Once internal efficiencies and data quality are optimized, then retailers can look outward at other elements to improve planning. An underrated signal from planning efficiency is out-of-stock and availability; retailers tend to overlook the negative impact brought on by out-of-stock numbers: how much out-of-stock has caused in losses and the opportunity cost of it all. Nonavailability has been overlooked as consumers (reluctantly) accept the reality of out-of-stock items in favor of convenience—while purchasing the closest alternative isn’t ideal, they make due. But eventually, without the right products in the right place at the right time, customer loyalty falls and they become frustrated.
“Most retailers have really messy data. What do you think should be the first 2-3 steps that any retailer should take before investing in any AI planning tool?”
With retailers implementing many different systems, there are many different versions of data. The first step is to have a master sheet; master data to ensure data integrity and a single version of truth. The second step is to smooth out anomalies—the white noise that shouldn’t be considered in future decisions. Lost sales and out-of-stock needs to be backfilled into your data, and unproductive sales need to be filtered out to set an ideal base for decisions.
“How do you keep store-level inventory availability honest when online and offline are competing for the same stock?”
7thonline is a unified planning solution, we pride ourselves on empowering an integrated approach that not only takes into account brick-and-mortar and ecommerce but also different distribution channels like wholesale and franchisees. Clients are able to look at the demand signals of all channels on a centralized, unified place to forecast demand more precisely.
Our system is robust enough to account for different data formats. For instance, wholesale channels won’t display sell-through data, only sell-in data. So how do you forecast? For ecommerce, what about the media buying aspect? We have to consider the “4th dimension” to account for the promotional heavy strategy that influences the retail cube: product, time, location. A robust system can process all of these to provide a more accurate and comprehensive view of demand to precisely forecast based on the needs of individual channels.
Listen to the full podcast here: https://www.youtube.com/watch?v=1YWmitUxzSc
For more industry insights, check out our blogs or contact the team at info@7thonline.com.
