The retail industry of today is a hyperactive and ever-changing environment, ripe with emerging technologies, competition, and an opportunity for those able to navigate through the waters of uncertainty. Retailers today not only need to be able to see through the smoke of change to determine the best path forward but also need to avoid the most common mistakes that have marked the end for past retailers. Here are seven deadly sins to avoid in today’s retail environment.
Lust: Could’ve, Should’ve, Would’ve
Time spent wishing is time wasted. Retailers who rely solely on historical data and manual-based analysis are left playing a guessing game around the decisions they make on future inventory decisions. This reliance on outdated methods keeps the door open for errors and shuts it to new opportunities. Fortunately, the emergence of advanced analytics provides merchants with insights to understand demand more accurately than ever. Retailers who adopt these tools are making better, data-driven decisions, leaving crossed fingers around buying decisions a thing of the past.
Gluttony: Take Control of Excess Data
Retailers have excessive amounts of data they’re not leveraging effectively. Yet, many are slow to commit themselves to change. By sitting atop their own mountain of data, companies make the choice to sacrifice margin and allow their competition a leg up in the process. As more retailers benefit from data analytics, incorporating such technology into their strategies has become industry best practice.
Greed: Don’t Overlook What Customers Want
Your goal ultimately boils down to maintaining a profitable business model, where margins must be rigorously maintained. Too often, retailers make the mistake of focusing too closely on their top line and not enough on what they could be doing for their bottom line. To combat this, many retailers are infusing artificial intelligence and advanced demand prediction engines into their systems to better understand their customer’s preferences and choices. These retailers are reaping bottom-line benefits by focusing on what ultimately matters most: their customers.
Sloth: Don’t be Reactive
Now more so than ever before, retailers need to be adaptive and agile with their decisions to keep up with fickle customers. A business, slow to both act and react can hardly expect to float, not to mention win, in the modern retail ecosystem. With unpredictable fluctuations in customer demand, retailers need to be able to jump on opportunities at a moment’s notice. This means making fast, accurate decisions with conviction through advanced analytics.
Wrath: Take Control of Markdowns
As anyone who’s spent time in the retail industry can likely attest to, the wrath of unplanned markdowns isn’t fun for anyone involved. They’re indicative of inaccurate demand predictions, poor assortments, and lost profits. With an increasing number of channels by which customers are browsing and ordering merchandise, decisions across the entire merchandising planning and allocation process are becoming increasingly complex. Retailers effectively mitigating markdowns are doing so by leveraging the latest in predictive analytics to better comprehend the location-specific demand across their stores to improve planning, buying, allocation, and fulfillment decisions.
Envy: Don’t Lose Sight of Your Competitive Advantage
Envy for competitors, especially digitally-native competitors like Amazon, can be an ineffective and oftentimes destructive mindset with which to steer a company. Too often, retailers are too caught up in trying to be like Amazon that they lose sight of their own strengths and assets. This is especially so for traditional brick-and-mortar retailers, who have a distinct competitive advantage over the Amazons of the world. That advantage lies in their store networks, as retailers with brick-and-mortar locations can leverage advanced analytics with innovative fulfillment strategies to beat Amazon at its own game.
Pride: It’s Time to Move On
The final sin of retail is pride. The fact of the matter is that the modern retail industry is rapidly changing, rewarding those who keep pace with changing consumer expectations and industry best practice. While confidence will always be a vital mindset for success, too much of it can get in the way of growth. Retailers clinging to ways of the past are setting themselves up for failure.