Retail technology delivered agility to retailers in 2020, saving them from the COVID-19 pandemic. But is the future of retail tech improving order management, inventory control, supply chain optimization, or enhancing the customer experience?
The right retail tech will integrate data across those functional silos, transforming your business through integrated planning, modeling, and predictive analytics.
Let’s look at why this means integrated retail planning is the future of retail tech:
- Resilience through digital transformation and digital maturity
- Breaking data silos to power predictive modeling & planning for decision-making
- Achieving a 360-degree view of the customer
Resilience through digital transformation
Twenty-twenty was all about agility. At this year’s National Retail Federation Virtual Big Show in January, Janey Whiteside, Walmart’s Chief Customer Officer said they experienced 5 years of digital acceleration in 5 weeks! In 2021, that’s not enough.
IDC defines three levels of digital maturity for digital transformation: Not Strategic, Determined, and Mature. Of 150 retailers surveyed, only 10 percent achieved the Mature level, while 63 percent were Not Strategic.
Why? They didn’t have an integrated retail planning system that takes in all the data you have, both internal and external, creating a decision loop where data and results are considered in building business models using predictive analytics.
Are AI and machine learning the answer? Yes, but they are only tools in the overall solution.
A technology platform that takes in data from all critical organizational areas — finance, strategy, operations — to build predictive models, based on analytics from those functional areas’ data, is required to achieve digital maturity.
Building predictive modeling
“Integrated” means breaking down retail data silos — marketing, finance, HR, merchandising, supply chain, and operations all working together in a coordinated fashion from one master plan, not a collection of spreadsheets.
So, if you need to review your merchandise assortment, you don’t want to filter through a series of spreadsheets to know your inventory, buying plan, and fulfillment rates to adjust your replenishment. You need an automated system that allows you to model different scenarios and adjust your operation, supply chain, and financials automatically and predictably.
That’s how integrated planning and predictive scenario modeling make your business resilient.
A 360-degree view
Since an integrated retail planning solution considers all the data you have, both internal and external, to create business models and predictive scenarios, you essentially have a complete view of your lifetime customer value.
Now you can model how customers react to new experiences while operational processes and financial metrics are adapted.
What If an apparel retailer considers building an AI-based wardrobe assistant in its mobile app? This assistant acts as a personal stylist and recommends new merchandise based on what is in the customer’s closet.
A 360-degree model will allow you to answer the following questions:
- Based on customer demographics, will certain merchandise be recommended more often by the AI?
- What impact will that have on forecasting, assortments, and operating margin?
- Will the supply chain support the variation in products ordered based on app adoption?
- Will suppliers be able to meet the demand based on the seasonality of the merchandise and shopper buying habits?
All these questions can be simulated and predicted according to models that an integrated retail planning solution can deliver. You will connect the dots between customer experience and your business operations, allowing you to determine if the new experience or innovation is worth pursuing based on financial performance.
The future of retail tech
It’s clear why integrated retail planning is the future of retail tech. After a year of developing the agility to quickly deploy technology, retailers need resilience in 2021 to grow revenue and profitability predictably.
Whether deploying same-day delivery services, modeling new supply chain forecasts, or enabling digital customer experiences in-store, retailers can become resilient with integrated retail planning technology.
If you want to learn more, visit board.com/retail.
