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Two of three retailers plan to upgrade or replace their merchandise planning systems within two years because they are out-of-date and don’t effectively address current requirements for an omni-channel environment, says a new survey from Boston Retail Partners.
Many retailers are using planning applications designed for old retail business models, many of which were installed in the late 1990s or early 2000s, according to the consulting firm. As a result, many retailers today are trying to meet the needs of a 21st century customer while constrained by 20th century technology.
“Stores are under siege from other channels and unfortunately are dealing with outdated and ineffective systems to address the complex planning process that is required in an omni-channel environment,” said Ken Morris, principal, Boston Retail Partners. “All of this negatively impacts the customer experience and, ultimately, sales.”
The good news, he added, is that retailers realize the issue and two of three (63%) survey respondents plan to upgrade or replace their merchandise planning systems within two years.
The firm’s 2015 Merchandise Planning Survey of top North American retailers offers insights into current planning initiatives, priorities, and future trends as the retail industry continues its omni-channel transformation. Other key findings include:
- Analytics is the top priority: Nearly six of 10 retailers (58%) said improving analytics is their top priority for next year.
- Advanced analytics are gaining traction: Three of four retailers (75%) use advanced analytics for merchandise planning; however, fewer use advanced analytics for store planning (45%), assortment planning (40%) and omni-channel planning (20%).
- Integrated merchandising plans are not working well: While 50% 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%) still maintain separate inventories for each channel.
- Social media use for merchandise planning is opportunistic: While 71% of retailers indicated that they capture customer feedback via social media, only 23% are using social media for product planning.