The Challenges of Sequential Allocation

It’s almost that time of the year – Amazon Prime Day’s a-looming. The midsummer, Black Friday equivalent and annual reminder to retailers of one of the most wildly successful loyalty campaigns ever created. 

This four-year-old online shopping “holiday” is also a clear reminder to retailers of this:

It’s time to step up your game.

Beyond the Prime Day phenomenon, Amazon’s success stems from understanding what their customers want. 

In essence, understanding what your customer wants means the ability to offer the right product in the right place at the right time: the ultimate challenge retailers face today.

Perhaps not surprisingly, a huge part of this challenge can be traced back to a retailer’s allocations. You can have the best assortment plan in place, the perfect quantities purchased—and yet, you continue to see unsold product, day after day, that should have sold well at store A or out-of-stock situations at the supposedly-low-demand store D.

It’s not easy to know ahead of time that you should have stocked 30 more pairs of faux fur slide sandals in a size seven at Houston’s Galleria store. While hindsight’s 20/20, it’s also freakin’ costly. 

Here are some of biggest allocation challenges retailers need to quash ASAP:

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Topics: allocation, localization, advanced analytics, customer preference

How to Exceed Customer Delivery Expectations Through Order Fulfillment

“Consumer centricity is increasingly necessary for retailers and brands to maintain loyalty within highly saturated markets. Launching technology that not only delivers shipments in an expedited and efficient manner while subsequently optimizing current inventory levels will improve margins.” - WWD 

According to the NRF, Father’s Day spending for 2018 is expected to reach $15.3 billion dollars and more than one third of all shoppers are expected to buy something online.

I’m definitely one of those shoppers this year.

As I narrow down the search for my dad’s gift, shipping cost and delivery speed are by far one of the top deciding factors. 

While, admittedly, waiting the week before Father’s Day could have something to do with this (guilty), the data behind online delivery expectations say otherwise:

This “Amazon Effect” (so it’s been dubbed) is bringing the heat to retailers big and small, and urging many to discover ways to focus their current supply chain around the customer. 

Especially when it comes to the “last mile” as many traditional brick-and-mortar retailers realize one of the best ways to implement a “customer centric” approach is to capitalize on proximity – i.e., their physical stores.   

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Topics: localization, fulfillment optimization, cross-channel demand, advanced analytics, customer preference, order fulfillment

The Challenges of Clustering

As the seasons change and the weather starts to warm up, I found myself on the hunt for a new summer outfit – ideally a lightweight blouse paired with a matching skirt. While the merchandise I’m looking to buy isn’t necessarily relevant, the situation I found myself in is.

It’s the kind of situation consumers experience waaay too frequently and, frankly, a large reason why providing a stellar customer experience while improving sell-through is such a challenge for many retailers today. 

The story goes like this: 

I came across THE perfect blouse/skirt on a retailer’s e-commerce page. Sizing is always a potential issue so instead of making an online order, I resort to a brick-and-mortar visit.

As I make my way to this retailer’s store, ready and willing to spend, I ultimately find:

  1. The blouse isn’t available at that particular location
  2. The skirt isn’t available in the size or color I wanted
  3. The sales associate was super unhelpful (irrelevant to the point I’m trying to make – but argh—still worth noting) 

Okay, fine. It happens. How was the retailer to know I was going to waltz into their Newbury location looking for product A and product B?

The thing is, businesses “doing retail right” do know – and plan their assortment accordingly. Successful retailers know when it comes to finalizing their assortment plan for the upcoming season, they must rely on truly localized demand to ensure they stock the right product at the right location (and in this particular instance, in the right color and size).

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Topics: allocation, assortment optimization, customer experience, merchandise planning, customer choice, merchandise buy, retail clustering, customer preference

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