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Tag Archives: Gartner

Proof: Improving Forecast Accuracy delivers High ROI

A mountain of research today shows that improving forecast accuracy delivers a high ROI. Improved forecast accuracy, when combined with software that translates the forecast into demand driven events, will decrease inventory and operating cost, increase service and sales, improve cash flow and GMROI, and increase pre-tax profitability.

Lowering Inventory and Raising Sales at the Same Time

Many people are conditioned to accept mediocre demand forecasting accuracy. The most common excuses I hear for keeping inaccurate forecasting include: “We paid a lot of money for the software” and “The software does a good job with other operations.” The irony is that the same people, when asked if they shopped for better software, will respond no. The explanations range from they do not see the value to disbelief – there isn’t a better demand forecasting solution in their market. Businesses have reacted for the last 20 years by placing more value on the plan, a top down approach that costs more money and has lower returns.

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How To Get Rid of your Planners Once and for all

Demand-Driven Forecasting discussions seem to run into a debate on the differences between demand forecasting and planning. We know how new technologies have moved beyond many planner job descriptions, some still think a planner and inventory manager are the same. Unfortunately, many people don’t realize the value proposition that bottom up, demand-driven retail delivers; they continue to use the old planning models and rename their process as demand-driven. I sat in on a presentation for an international retailer a short time ago. They were a mid-tier retailer with sales in excess of $500M, a strong web presence, and stores found in shopping centers and malls. Their products are purchased by male and female shoppers resulting in strong return shopper experiences and new customers which deliver strong sales growth year after year.

Attendance for our meeting included the CIO, Chief Merchant, Director of Forecasting, planners, and inventory management people. They told us their goals were to reduce operating capitol but maintain service levels for the web and store customers. The company wanted to increase turns while re-purposing the capital from inventory into new stores and acquisitions. The irony of the meeting is that while they used words like Demand Driven retail and Demand Forecasting, they were really talking about planning and goal setting. They believed that allocations were great and had never even thought of discussing top down versus bottom up as two distinctly different methodologies that are used to achieve entirely different goals. Read More

Little Known Leverage Strategies for Lost Sales Reductions - Part 3

Data Profits’ Predictions for 2012 that Retailers need to Know Now

The official holiday shopping and Christmas season kicks-off this weekend, and is considered a bellwether for the retail industry, as this is the time of year when retailers earn up to 40% of their annual profits. Everyone is watching to see:  will post-election results and the continuing shaky global economy drive shoppers back into their recessionary, frugal spending habits or will they be more willing to loosen purse strings?

Another major trend that industry insiders are speculating about is the influence of social media and ecommerce on this year’s holiday shopping season. Will consumers seek and find the best deals from their sofas by using their device of choice, avoiding the mob scenes at the Malls all together? With so many big questions looming, what can retailers do on the eve of the 2012 Holiday Shopping season that will make a strategic impact? Read More