Better Retail Planning Platforms More Important Now, Than Ever


Bob Debicki

CPG & Retail Industry Head

The need for feature-rich, connected planning platforms for critical retail functions has become an imperative - even more so than in the last two decades. There have been major shifts in consumer behavior, supply chain disruptions, and major macro-economic trends significantly impacting the retail industry in just the past couple years – all of which are compounding into a sense of urgency:

  • Rising Inflation is increasing the pressure on retail operating models and revenues. Economic conditions are changing consumer choices, at the same time making it difficult to pass rising costs on to consumers, forcing retailers to plan more efficiently while continuing to deliver value to consumers.  At stake, is the ability to identify which products can sell now versus which ones are wasting valuable shelf space, adding higher carrying costs.
  • Rapidly changing consumer behavior forces real-time re-evaluation of demand forecasts to keep up with shifting consumer purchase behavior, evaporated ‘loyalty’, and alternatives from competitors that woo customers away.  Often merchandisers misread these signals, then compensate by building up excess safety stock and/or relying on reactive markdowns to move it.  Both can eat away at a retailer’s revenue and working capital.   
  • Changing demand patterns are forcing retailers to change their approaches to increase supply chain agility, gain end-to-end inventory visibility across locations, and avoid demand shortages by allocating their constrained supply network with rapidly changing, erratic demand.  Getting this wrong shows up in lost sales, stockouts, lower inventory turns, reactive markdowns, margin erosion and lost share.
  • Labor shortages mean less people on the retail sales floor to fill shelves, fewer trained advice for guiding customer purchasing, which raises a serious challenge for merchandise planners in how they allocate inventory, select products and design promotions.  For specialty retailers, labor shortages can break merchandise plans, operating models and event brand equity.  

As new research from Forrester’s respected analyst, George Lawrie points out in the recently released “Retail Planning Platforms Landscape Overview” – ‘Retailers used to worry about combining retail art and science.  But the scale and speed of retail (today) demands more automation in both planning and execution’. This research shares how modern retail planning solutions can help retailers manage today’s rapidly shifting demand and inventory planning at scale across a wide range of merchandise, locations and channels.

Forrester’s research also explains that retail planning platforms have ‘evolved into an established market as enterprise-level synchronous collaboration platforms’ to help drive top line revenues, improve profitability and unlock working capital and mentions Anaplan as a solution provider that stands out with ‘expertise in financial planning and analysis’. As many leading retailers now know, connecting merchandise to financial planning is a game-changer for them, allowing them to respond to market changes with fact-based, consensus-driven impact forecasts and plans that assess financial impacts of merchandise choices that adapt in near real-time.  

A few examples of business value accomplished with ‘better’ retail planning aligned with financial goals can be illustrated from just a few iconic retail brands (across a variety of use cases), leveraging Anaplan’s Merchandise Financial Planning solution. This demonstrates what is possible via improved enterprise merchandise planning capabilities today:

  • Global Athleisure Retailer - Improved forecast accuracy by 30%, with a projected $100M annual benefit to the bottom line
  • Global Luxury Retailer – 30% improvement in inventory levels, unlocking $1B+ in free cash flow across all brands across all items, locations, channels
  • Global Fashion Retailer - projected $259M annual COGs improvement and 30-40% ROI
  • NA Home Goods Retailer - 99% forecast accuracy during biggest seasonal promotion, projected annual benefits of $60M in revenues + $45M in COGs
  • US Based Children’s Apparel Retailer - 13% reduction in obsolete inventory (avg. 8 days), and $25M working capital unlocked in just 6 months

As Forrester also mentions in their ‘Market Maturity’ breakout, the impact of ‘better’ retail planning can have on the retail enterprise is no longer siloed and back-office, as “Retail planning has escaped from the business insights basement and taken the elevator to the executive suite” and make headlines for beating expectations on revenue and profits. Perhaps, this nicely summarizes the reality of ‘what good retail planning’ looks like – as realized by retail brands that leverage Anaplan to drive collaboration across key lines of business.  Recognizing ‘planning’ is not a siloed, nor a ‘one and done’ exercise.  

For retail merchants, Anaplan’s purpose-built, retail planning platform enables not only efficient and effective ‘pre-season’ planning, but also provides real-time, action-oriented ‘in-season’ insights and suggested actions. Merchants and broader enterprise stakeholders also benefit from a ‘single view’ of inventory visibility and demand fluctuation (by item, day) across all channels (stores, DCs, FCs) – which enable collaboration across shared enterprise KPIs - in real-time. 

Ultimately, providing a single platform for retail Merchants, Finance, Supply Chain and Operations to make ‘on the fly’ adjustments to improve enterprise revenues, GMROII, and minimize stockouts and safety stock, and use markdowns strategically to turn inventory at a profit before it becomes obsolete – before it’s too late.

Curious?  Learn more about Anaplan’s Merchandising Financial Planning solution here.