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Are You Using Advanced Analytics to Optimize Inventory?

Convenience Store Decisions – BRP Consulting finds only 33% of retailers optimize their inventory by leveraging advanced analytics. According to BRP’s 2018 Integrated Planning and Inventory Management Survey, most retailers (67%) are not leveraging advanced analytics to improve their planning decisions and optimize inventory.

The importance of enhanced data and analytics is not lost on retailers, however, there are further opportunities to optimize their planning and inventory.

While 67% of retailers are not using advanced analytics for merchandise planning, only 39% of retailers identified improved analytics as a top priority. This is a disconnect. As technological capabilities continue to advance, investing more resources into data utilization needs to be a critical objective for retailers.

“Analytics serve as an important tool in assisting retailers to find and interpret meaningful patterns in customer and inventory data to support decision-making,” said Robert Cuthbertson, vice president at BRP Consulting. “Insight into customer demand, product adjacencies, 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 omni-channel environment, as understanding the preferences of disparate customer groups across different channels becomes more complicated.”

“The technology for AI tools has advanced dramatically in the past five years. Innovative new technologies can even predict where customers will be in the next hour or next day based on historical patterns,” said Ken Morris, principal at BRP Consulting. “AI is also helping retailers make better decisions on which store should fulfill an online order. While traditional logic would select the product from the closest store to the consumer, with machine learning techniques, retailers can assess the value of inventory in each store to make smarter fulfillment decisions. For example, if they can identify/predict that the item in inventory at the closest store will likely sell at full price, but the same item at a different store location will likely result in overstock and markdowns, the retailer can ship from the further store and maximize total profits.”

Read Full Article: Are You Using Advanced Analytics to Optimize Inventory?

Only 33% of Retailers Optimize their Inventory By Leveraging Advanced Analytics, According to BRP Report

Advanced Analytics and AI are Key to Improving Planning Decisions

Boston, MA – February 14,  2019 – According to BRP’s 2018 Integrated Planning and Inventory Management Survey, most retailers (67%) are not leveraging advanced analytics to improve their planning decisions and optimize inventory. The importance of enhanced data and analytics is not lost on retailers, however, there are further opportunities to optimize their planning and inventory. While 67% of retailers are not using advanced analytics for merchandise planning, only 39% of retailers identified improved analytics as a top priority. This is a disconnect. As technological capabilities continue to advance, investing more resources into data utilization needs to be a critical objective for retailers.

Advanced analytics, or predictive analytics, offers retailers the ability to predict outcomes based on sophisticated algorithms and historical data. This requires human interaction to query data, validate patterns, create and then test use cases and assumptions. Now, with artificial intelligence (AI), also known as machine learning, planning systems can reassess models and reevaluate the data, all without the intervention of a human. AI is able to test and retest data to predict every possible customer-product match, at a speed and capability no human, or team of humans, could possibly achieve. The result is far more accurate decisions.

“Analytics serve as an important tool in assisting retailers to find and interpret meaningful patterns in customer and inventory data to support decision-making,” said Robert Cuthbertson, vice president at BRP Consulting. “Insight into customer demand, product adjacencies, 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 omni-channel environment, as understanding the preferences of disparate customer groups across different channels becomes more complicated.”

“The technology for AI tools has advanced dramatically in the past five years. Innovative new technologies can even predict where customers will be in the next hour or next day based on historical patterns,” said Ken Morris, principal at BRP Consulting. “AI is also helping retailers make better decisions on which store should fulfill an online order.  While traditional logic would select the product from the closest store to the consumer, with machine learning techniques, retailers can assess the value of inventory in each store to make smarter fulfillment decisions. For example, if they can identify/predict that the item in inventory at the closest store will likely sell at full price, but the same item at a different store location will likely result in overstock and markdowns, the retailer can ship from the further store and maximize total profits.”

According to the 2018 Integrated Planning and Inventory Management Survey retailers’ current and planned usage of advanced analytics by planning area includes:

  • Merchandise Planning – 33% of retailers currently use advanced analytics for merchandise planning and another 48% plan to within three years.
  • Assortment Planning – 30% of retailers currently use advanced analytics for assortment planning and another 49% plan to within three years
  • Demand Planning – 31% of retailers currently use advanced analytics for demand planning and another 54% plan to within three years.
  • Product Lifecycle Management (PLM) – 22% of retailers currently use advanced analytics for PLM and another 33% plan to within three years.

BRP conducted the 2018 Integrated Planning and Inventory Management Survey to explore the current state of retail planning and to identify and understand retailers’ priorities as they strive to meet the needs and demands of today’s consumers. Platinum sponsors are Aptos and Mi9 Retail, gold sponsors are Celect and Retalon, and silver sponsors are ANT USA and enVista.

To download the 2018 Integrated Planning and Inventory Management Survey, visit:

https://brpconsulting.com/download/2018-integrated-planning-survey

About BRP

BRP is an innovative retail management consulting firm dedicated to providing superior service and enduring value to our clients. BRP combines its consultants’ deep retail business knowledge and cross-functional capabilities to deliver superior design and implementation of strategy, technology, and process solutions. The firm’s unique combination of industry focus, knowledge-based approach, and rapid, end-to-end solution deployment helps clients to achieve their business potential. BRP’s consulting services include:

Strategy | Business Intelligence | Business Process Optimization | Point of Sale (POS)
Mobile POS | Payment Security | E-Commerce | Store Systems and Operations | CRM
Unified Commerce | Customer Experience | Order Management | Networks
Merchandise Management | Supply Chain | Private Equity

For more information on BRP, visit http://www.brpconsulting.com.

In a sneaker market dominated by resale, Foot Locker is aiming to stay relevant

Glossy – Last week, Foot Locker invested $100 million into sneaker resale platform GOAT, which merged with boutique brick-and-mortar sneaker reseller Flight Club last year. The investment is reportedly the largest-ever single investment into a sneaker resale platform, dwarfing similar investments like the $44 million investment StockX got from Google’s investment arm GV and Battery Ventures last year. (Stadium Goods received an undisclosed amount from LVMH in February 2018.)

This news is proof that sneaker resale is a huge market. The major platforms like GOAT, StockX and Stadium Goods are all worth well over $100 million each. Stadium Goods was acquired by Farfetch earlier this year for $250 million. While Foot Locker is by no means a bit player in the sneaker world, it is clear that resellers have a lot of buzz and dollars floating around them. By investing heavily into GOAT, Foot Locker seems to be planning for the future by making itself more visible to lucrative sneakerheads.

“The greatest benefit to Foot Locker in investing in GOAT is the potential to elevate its brand among sneakerheads,” said David Naumann, vp of marketing at BRP, retail consulting firm. “Sneakerheads are extremely passionate. Associating Foot Locker with GOAT and making their stores a location to order or pick up their cool shoes will make sneakerheads think more highly of Foot Locker. They may even pick up another standard shoe or T-shirt or something while they’re in the store.”

Read Full Article: In a sneaker market dominated by resale, Foot Locker is aiming to stay relevant 

HAPPY 100th FOOD CITY!

Frozen and Refrigerated Buyer – At first glance, Abingdon, Va.-based Food City would appear to have little in common with heavy hitters Kroger, H-E-B, Safeway and Wegmans. But the 131-store chain recently joined the elite group after becoming the latest to mark 100 years in the grocery game. Although the chain was purchased by the Smith family in 1984, the first Food City opened its doors in 1918 in Greeneville, Tenn. A century later, the banner operates in small towns throughout Southeast Kentucky, Southwest Virginia and East Tennessee (all represented in parent company K-VA-T Food Stores’ name), as well as North Georgia, where two new stores opened just last month.

Many Food City shoppers have deep roots in the area — and the chain takes great pride in serving generation after generation — so community involvement is key.

“It’s a smart business model that distinguishes the company’s ability to source local products (and demonstrate its support of the community) and also service customers in smaller-format ‘local’ stores that offer easy-in, easy-out convenience — forget the 200,000-square-foot supercenter,” says Perry Kramer, senior vp and practice lead at BRP, retail consulting firm. “This market is hard to serve,” he adds. “We’ve seen many large retail chains try and fail to penetrate these kinds of markets even with smaller footprint stores” because they don’t know the customers and they don’t have the community connection.

So far, that appears to be Food City’s strategy, though it did enter the Chattanooga, Tenn., market in 2015. In fact, the two North Georgia stores it opened last month (Dalton and Oglethorpe/Fort Ringgold) are both Chattanooga suburbs — a little different from the chain’s typical small town. Food City CEO Steve Smith has told various news outlets he can also imagine expanding into North Carolina and Alabama, though it remains to be seen exactly which markets it would enter.

“Retailers like Food City that rely on their brand heritage and nostalgic following can find it difficult to expand into new markets,” says Kramer. But if the chain is strategic about growth, expanding only to nearby communities “then it can leverage existing brand awareness from consumers that have shopped at Food City in other towns.”

One area where Food City may want to invest more resources is its private label program. Though the chain offers more than 20 different store brands through Topco, including Food City-branded items in high-volume categories, “a more cohesive brand that spans multiple categories would create stronger brand loyalty and awareness,” says Kramer.

Read Full Article: HAPPY 100th FOOD CITY! (pages 26-30)

 

Walmart Makes a Play for U.S. Sports Fanatics

The Motley Fool – Walmart (NYSE:WMT) has lagged behind Amazon (NASDAQ:AMZN) when it comes to licensed sports apparel and being able to offer certain prestigious brands in that space. But that’s no longer the case, as the retail giant has partnered with Fanatics to launch a specialty store selling licensed sports apparel on Walmart.com. As part of the deal, Fanatics will be the exclusive provider of officially licensed sports merchandise on Walmart.com moving forward.

Fanatics operates NFLShop.com, NBAStore.com, and MLBShop.com. It makes its own merchandise and sells a number of brands that Walmart previously did not have access to. This includes Nike (NYSE:NKE), New Era, Mitchell & Ness, and others.

Nike has sold select merchandise on Amazon.com since 2017. It has worked with Walmart’s Jet.com since October.

This deal fills a major hole for Walmart while greatly increasing distribution for Fanatics. It takes merchandise that consumers want and makes it easier for them to get it. That’s more important in a challenging retail climate where chains like Dick’s Sporting Goods (NYSE:DKS) lose a top rival in Sports Authority (back in 2016) and don’t show significant growth despite the reduced competition.

“The Fanatics partnership with Walmart will certainly benefit both companies,” Ken Morris, principal at BRP, retail consulting firm. “For Walmart, it increases the traffic on and brand image of the Walmart.com marketplace. As Walmart adds more leading brands to the marketplace, more consumers will think of it as a first place to do product searches, which Amazon currently dominates.”

Read Full Article: Walmart Makes a Play for U.S. Sports Fanatics

Naadam’s pop-up twist: It only sells one type of sweater

Glossy – The front window of cashmere sweater brand Naadam’s SoHo store is emblazoned with a giant “75,” advertising the brand’s $75 cashmere sweater. But the store is not just highlighting the $75 sweater; it is literally the only thing available to purchase in the store. Founder Matt Scanlan opened the store dedicated to the single product as a reaction to the sometimes overwhelming number of choices consumers face.

“It’s a much simpler proposition,” said Scanlan. “Some people want fewer choices. They don’t want to be bombarded with options. The fewer SKUs we offer, the faster and simpler it is for them. We can also grow the company faster because we don’t need to analyze data across a bunch of variables. It’s one sweater in a handful of colors, so it’s easier to optimize.”

Scanlan said the simplified store, plus the fact that it offers sweaters customized with embroidery and monograms on site, has led to a significant conversion rate, particularly compared to the brand’s online store. Naadam’s online store typically sees hundreds of thousands of visitors per month. Despite that, conversion rates are low, around 1 or 2 percent, according to Scanlan. Conversely, the single-product store sees far fewer people actually visiting — a few hundred per day — yet conversion rates are much higher. “We’ve sold close to 100,000 sweaters [in-store] since the store opened in November,” he said.

“Uber-focused brands, selling only one product category, have become a hot trend in retail,” said David Naumann, vp of marketing at BRP, retail consulting firm. “If you can differentiate your product in a way that’s compelling, it can drive enough demand for a profitable retail business. This has been the case for successful subscription services for products like razor blades, socks and ties.”

Read Full Article: Naadam’s pop-up twist: It only sells one type of sweater

Macy’s closing should be a call to action

Daily Mail WV – The news was sad, but hardly surprising. Macy’s will close its Charleston store in a few months, after a clearance sale. I shopped there over the holidays and came away thinking its days were surely numbered, that it wouldn’t survive the next round of downsizing. Merchandise selection was poor, and clerks were few and far between. Likewise, customers.

An article on a website called Retail Touchpoints says malls that will survive in coming years — and it predicts many will not — must let go of the anchor concept.

“Mall operators have plenty of options to replace anchor department stores and apparel retailers, adding space for events and pop-up stores, grocery stores, smaller format stores and even coworking spaces. These locations can be much smaller than the large anchors that occupied the spaces for decades.”

Ken Morris of Boston Retail Partners mentioned an Apple Store as offering “something for everyone, regardless of if you’re six or seven years old, or 70 years old. It’s an event. It’s theater, and the reality is that’s going to draw people all of the time.”

Read Full Article: Macy’s closing should be a call to action

How Hudson’s Bay Company looks to pay off its debt and revitalize its stores

Glossy – Once, Lord & Taylor’s Fifth Avenue flagship store was a jewel in the crown of Hudson’s Bay Company, its parent company. In 2010, HBC invested $150 million in updating the store. Seven years later, Lord & Taylor received another $12 million renovation. Yet within just over a year of that final investment, the company sold the building, the oldest department store in the country, to WeWork, closing its doors for good on Thursday.

So how did the company go from pouring more than $100 million into the store to selling it in just a few years? In short, it is likely because of the same challenge that legacy retailers across the board are facing: strong competition from disruptive new forces.

“With intense competition from online retailers, maintaining a profitable brick-and-mortar presence in the high-priced real-estate shopping district on Fifth Avenue is extremely challenging,” said David Naumann, vp of marketing at BRP, retail consulting firm. “While a presence on Fifth Avenue helps elevate the brand image for Lord & Taylor, brand image doesn’t translate into profitability. As a corporation driven by stockholders’ desire for stock price appreciation, Hudson’s Bay Company sold its Lord & Taylor property to boost its profitability.”

Read Full Article: How Hudson’s Bay Company looks to pay off its debt and revitalize its stores

Elevated Customer Expectations Require Integrated Planning Processes and Systems, According to BRP Report

54% of Retailers are Focused on Better Integration of Customer Data into Planning Activities

Boston, MA – December 13, 2018 – As customer shopping journeys continue to span across channels, it is imperative for retail planning processes, systems and organizations to be streamlined and integrated to meet increased customer expectations. Current disparate solutions must be transformed into one cohesive environment with the ability to offer customers a seamless shopping environment and the capability to deliver the right merchandise immediately – wherever it is needed. BRP published the 2018 Integrated Planning and Inventory Management Survey to offer insights on the key challenges and benefits of integrating planning processes and systems and identify where retailers are on this path to providing a holistic shopping experience.

“Today’s customer journey requires retailers to use an integrated set of solutions, processes and organization to create and deliver the shopping experience consumers expect,” said Gene Bornac, senior vice president and practice lead, BRP. “The good news is that many retailers realize their systems and processes need improvement and are planning to replace more than 50% of their planning systems within the next three years. Retailers are also focused on improving the integration of actionable customer data into their planning activities, as customer demand is a critical variable in today’s customer-led demand planning.”

To achieve an integrated retail planning model, retailers need to:

Align the organization

  • 40% of retailer currently have an integrated planning organization across channels and 73% of those indicate it needs improvement
  • Within three years, 87% of retailers plan to have an integrated planning organization across channels

Integrate planning processes

  • 43% of retailer currently have an integrated planning business processes across channels and 84% of those indicate it needs improvement
  • Within three years, 93% of retailers plan to have integrated planning business processes across channels

Implement technology

  • 39% of retailer currently have an integrated planning systems across channels and 82% of those indicate it needs improvement
  • Within three years, 89% of retailers will have integrated planning systems across channels

Prioritize customer data

  • 54% of retailers are focused on better integration of actionable customer data into their planning activities
  • 44% of retailers utilize customer feedback in real-time to impact in-season planning

To download the 2018 Integrated Planning and Inventory Management Survey, visit:

https://brpconsulting.com/download/2018-integrated-planning-survey

About BRP

BRP is an innovative retail management consulting firm dedicated to providing superior service and enduring value to our clients. BRP combines its consultants’ deep retail business knowledge and cross-functional capabilities to deliver superior design and implementation of strategy, technology, and process solutions. The firm’s unique combination of industry focus, knowledge-based approach, and rapid, end-to-end solution deployment helps clients to achieve their business potential. BRP’s consulting services include:

Strategy | Business Intelligence | Business Process Optimization | Point of Sale (POS)

Mobile POS | Payment Security | E-Commerce | Store Systems and Operations | CRM

Unified Commerce | Customer Experience | Order Management | Networks

Merchandise Management | Supply Chain | Private Equity

For more information on BRP, visit http://www.brpconsulting.com.

Integrated Planning Solutions are Imperative to Retail Success, According to BRP Report

The BRP SPECIAL REPORT: Integrated Planning – Getting it Right, Identifies Key Challenges and Benefits of Integrated Planning Processes

Boston, MA – December 6, 2018– Streamlined and integrated planning processes are foundational to developing sound strategies and plans that align with consumers’ expectation of a seamless, cross-channel shopping journey. BRP published the SPECIAL REPORT: Integrated Planning – Getting it Right, based on the 2017 Merchandise Planning Survey, to offer insights into the key challenges and benefits of integrating planning processes and systems.

“While some retailers have been able to work with legacy tools and disjointed processes, their results have been hindered by siloed data. In order to keep up, retailers must evaluate their processes and technology, automate tactical activities, and focus on how they can position their organization for success,” said Gene Bornac, senior vice president and practice lead, BRP. “With the knowledge that they have the right data integrated across the process, it will improve retailers’ ability to focus on finding the right products and distributing them to the right places. Integrated planning processes and technology are key to this effort by providing a single source of truth, collaborative approach, and organizational alignment.”

Retailers are gathering more data, across multiple channels and customer touchpoints, that is being leveraged by financial plans, demand plans, assortment plans, and store plans. The importance of a fully integrated planning solution to analyze and utilize this data is key to ensuring retailers remain competitive in this rapidly changing landscape. An integrated planning solution eliminates silos, leverages the same data, streamlines decisions, and builds consensus.

Integrating planning process is important, but also challenging.  This special report acknowledges the obstacles involved to eliminate silos and integrate people, processes and technology: resource constraints, disparate systems, organizational/process challenges, and budget constraints.

To download the BRP SPECIAL REPORT: Integrated Planning – Getting it Right visit:

https://brpconsulting.com/download/2018-special-report-planning

The BRP SPECIAL REPORT: Getting it Right: The Science of Planningplatinum sponsor is Aptosand the gold sponsors are enVista, Mi9, Logility, NCR, and Retalon.

About BRP

BRP is an innovative retail consulting firm dedicated to providing superior service and enduring value to our clients. BRP combines its consultants’ deep retail business knowledge and cross-functional capabilities to deliver superior design and implementation of strategy, technology, and process solutions. The firm’s unique combination of industry focus, knowledge-based approach, and rapid, end-to-end solution deployment helps clients to achieve their business potential. BRP’s consulting services include:

Strategy | Business Intelligence | Business Process Optimization | Point of Sale (POS)
Mobile POS | Payment Security | E-Commerce | Store Systems and Operations | CRM
Unified Commerce | Customer Experience | Order Management | Networks
Merchandise Management | Supply Chain | Private Equity

For more information on BRP, visit http://www.brpconsulting.com.