The cost of obsolete retail planning processes 

The retail industry is transforming at an unprecedented pace, driven by volatile economic conditions, shifting consumer behavior, channel complexity, and competition. But here’s the harsh reality: retail planning processes aren't keeping up. 

Every retailer understands the reality of value leakage – the effect of bad decisions on everything from assortment and placement to pricing on net sales and gross margins. Yet, value leakage is the effect of bad planning and poor visibility into consumer demand, coupled with misalignment of strategies for capturing customers’ wallets. By the time you recognize value leakage, it is often too late to stop it.  

As a CFO or finance leader in this sector you’re seeing value leakage everywhere, because it’s likely you are still working with siloed, backward-looking static data. What’s more, you lack the tools you need to predict, plan, forecast, and respond with confidence to shifting market conditions. 

It's getting more complicated, too. Unpredictable consumer demand, sweeping tariffs, employment volatility, and inflation are increasing financial risk and raising the stakes even higher. The gap between data and decision-making isn’t just a matter of execution; it’s a structural failure of the planning function within many organizations. 

In this blog we'll explore how retailers’ obsolete financial planning technology and processes cost you far more than you realize, and how you can better equip your organization to make the decisions that matter.

The consequences of inaction

In an ideal world, everyone from supply chain managers to finance executives will reference the same business data to inform strategic decisions. But in most cases, retailers are struggling to achieve this level of orchestration, leading to constant misreading of customer demand, misalignment of forecasts to reality, and missed opportunities.  All these factors accumulate into value leakage everywhere, from planning to execution.

Statistics paint a grim picture that backs this up — 75% of finance leaders admit that their ability to generate organization-wide insights is hindered by data silos. And 86% of retail finance executives acknowledge that their business or revenue forecasts are outdated by the time they reach key stakeholders.

In an environment where consumer demand can shift overnight, the impacts of this data disconnect are severe — including stockouts, overstocks, and substantial financial losses. It's no exaggeration to say that retailers who fail to adapt to modern planning systems are gambling with their future.

The “zero-consumer” problem

Today’s consumers have near-instant access to retail products across multiple channels, increasing demand for convenience, speed, and personalized experiences. Retailers are under continual pressure to respond to these expectations in real-time but are being held back from doing so by traditional forecasting methods.

You've probably heard of the "zero consumer" problem, as outlined in a recent McKinsey study on retail, which refers to a new breed of consumers who demand hyper-responsive, immediate service. These consumers have zero loyalty and zero patience, are always online, always aware of competitors’ options, and ready to act on them.

For you as a retail finance leader, this poses a significant challenge. You need to match the speed at which consumers make purchasing decisions and respond to demand when it arises, not days or weeks later. Current planning processes are simply not built to handle such rapid decision-making.

If you are still making manual adjustments based on gut feelings rather than real-time data, you're not alone — 85% of finance leaders say they are doing exactly that. This reliance on traditional methods and poor data always misaligns inventory, pricing, and promotions to shifting demand, putting you at a distinct disadvantage versus modern competition. This makes it impossible to respond quickly when demand shifts, which can lead to lost sales and overstocking — both of which increase inventory carrying costs and erode profits.

Tariffs and rising costs: The price of getting it wrong

Retailers are not just facing rising product prices; tariffs in 2025 are expected to create an additional financial burden. If planning isn’t optimized, you risk significant margin losses, which can be devastating in an already competitive market.

The cost of holding inventory alone has tripled in recent years, due to inflation, supply chain volatility, and now tariffs. The financial consequences of poor planning are further amplified when you overbuy or underbuy inventory. 

Overbuying can lead to markdowns, resulting in revenue loss, while underbuying leads to lost sales opportunities and, in many cases, damage to brand reputation. If you fail to integrate your planning processes, you run the risk of making decisions that will cost you more than just a few dollars — you could lose your competitive edge entirely and tie up more of your working capital.

Is AI the silver bullet for retailers?

Yes and no. AI and automation have the potential to improve efficiency, reduce costs, and improve forecast accuracy. But most retail organizations aren’t ready to harness the power of AI just yet. Although 43% of finance leaders believe AI will create more efficient ways of working, and another 43% expect it to significantly reduce costs, the reality is that most retailers still struggle with their data infrastructure. 

It's no exaggeration to say 'most' — 98% of retail finance leaders admit that their organizations need to improve their data infrastructure and information analytics capabilities before they can effectively implement AI or other emerging technologies. 

AI is not a substitute for planning discipline with good data and processes; it requires this solid foundation to deliver any benefits.

Without a unified, connected planning system, AI will only exacerbate the problems retailers are already facing. Rather than solving issues, it will merely highlight the weaknesses in existing processes. AI-driven forecasting that delivers meaningful insights is the holy grail but reliable, connected data is the prerequisite for its ability to deliver better outcomes. 

The path forward: a new retail planning playbook

Successful retailers are making the shift to connected, real-time planning that integrates finance, merchandising, and supply chain for better decisions. This allows you to eliminate data silos and create a seamless flow of information across all departments. By providing this cross-functional visibility, everyone has access to the same insights and clear a path to better decision-making.

Instead of relying on static spreadsheets, you can adopt dynamic scenario modeling and predictive insights that enable you to forecast and plan more accurately and to better respond to real-time changes in the market.

The time for change is now

The financial consequences of continued reliance on outdated planning technology are too severe to ignore. What's needed is more than just better forecasting; it's a complete transformation in how you plan, predict, and act. To succeed, you must adopt a new approach that integrates real-time data, predictive analytics, and AI to stay ahead of the competition.

For retail finance leaders looking to navigate 2025 with confidence, adopting a platform like Anaplan can enable the agility and accuracy needed to see, understand, and meet demand in real-time. The time to act is now — don’t wait for the compounding value leakage of outdated planning to catch up with you.