Retailers Can Learn Valuable Lessons from the World’s Tallest Skyscrapers
When visiting New York or another major city for the first time, the number and size of all the skyscrapers are without question one of the most notable elements. The term skyscraper literally means to erase or block out the sky. These are massive buildings by any account. Undoubtedly, skyscrapers are an impressive feat of modern engineering. However, they wouldn’t be possible without a strong foundation.
Like skyscrapers, retail businesses must also be built on a strong foundation in order to stand firm against the elements. We aren’t talking about physical buildings in this sense, but rather the right solutions which empower retailers to make profitable decisions. In other words, we are talking about the foundation of a profitable supply chain: a profitable demand planning solution.
The foundation of a building is critical, but it is not the only factor in what makes a building durable. Similarly, demand planning solutions can be further built upon to create greater retail profitability. Coupled with the right Machine Learning and AI techniques, a strong demand planning solution can help your retail business become the tallest skyscraper on the block.
The Right Foundation Produces the Right Results
Demand Planning is a fundamental part of all forecasting solutions and is the foundation for improving retail profitability. When coupled with AI, demand planning can help retail profits soar. Contrary to popular opinion, AI isn’t magic or autonomous. Machine Learning and AI heavily depend on something else to provide profound insights.
Going back to the skyscraper analogy, something else is needed before a solid foundation can be constructed. Deep beneath the loose soil and gravel on the earth’s surface lies a solid layer of rock called bedrock. The tallest buildings in the world have a foundation that is built on a layer of bedrock.
Likewise, demand planning, AI, and Machine Learning are built on a bedrock of their own: data. Granular historical data is needed in order for demand planning solutions to produce the right results. As more of the right data becomes available, AI helps continuously improve the demand planning models. Essentially, AI helps automatically update the models to incorporate the new data, which leads to greater accuracy.
Most retailers already have all of the data they need to be more profitable. However, data isn’t valuable without the expertise of data analysts. It can be challenging to know how to track, filter, organize, and store data, and to find actionable information that results in profit. If a company wishes to build a new skyscraper, they don’t just pick a spot and start building. They hire a team of contractors who are experts at designing and building tall buildings. These experts have the knowledge, tools, and experience to dig deep enough to tap into the bedrock. In the same way, retailers should leverage solution providers who can help them tap into their data to get the best results. When retailers utilize the right solution providers, it can be more valuable than an entire team of data analysts
A Strong Foundation is Critical for all Retailers
The foundation of a building impacts the integrity of the entire structure. Regardless of the type of building, it cannot withstand the storms without a strong foundation. Similarly, demand planning has a direct impact on the profitability of the entire supply chain. It impacts overstocks, out of stocks, markdowns, customer experience, and more.
All retail businesses need a demand planning solution. Demand planning helps retailers understand demand at the point of fulfillment regardless of where the transaction is happening. That means whether you sell inventory in-store, online, or utilize BOPIS (buy online pickup in store) or BOPAC (buy online pickup at curb), a demand planning solution helps retailers find actual demand
Understanding actual demand can ensure retailers buy the right quantities to support the lifecycle of a given item before and during its main buying season. It can also help retailers know:
- What inventory to carry
- What the optimal pricing should be for any given SKU
- How to manage store resources effectively
- How a promotion will perform
This planning encompasses all demand locations, whether the sale originated in-store or online.
Don’t Wait for the Next Storm
In the United States, New York City has more skyscrapers than any other city in the country. Many of the buildings standing today have been there for decades and will last many more years thanks to their solid foundations. While there are many factors dictating the success of retail businesses, one thing is certain: the best and most profitable retailers utilize demand planning solutions to make better, more accurate decisions that directly impact the bottom line.
At 4R, we help all retail companies increase profitability. By tapping into your existing data, our demand planning solution can show you real insights on how to maximize profitability in your supply chain. We help retailers leverage their data to create actionable insights with profitable results.
Don’t wait for the next storm to wreak havoc on your retail business. Contact us today at firstname.lastname@example.org to build a stronger foundation that will provide profitability for years to come.