Editor’s Note: Blog author Liza Amlani is the Principal and Founder of Retail Strategy Group. Liza has over 20 years of retail insider experience and industry knowledge in merchandising, buying, product development and strategy. She has worked closely with retailers such as Ralph Lauren Europe and Canada, Club Monaco, Nike and Walmart as well as department stores in North America, UK, Ireland and across Europe. She is passionate about helping companies to navigate the ever-changing retail landscape.
The pandemic put planners in the spotlight, and it quickly became apparent that it’s time for a change.
Because let’s face it: retail planners are suffering as they face many challenges. Those challenges include:
We clearly need to help our planners.
I have some ideas as to how to do so, but first, let’s examine the current state of reality.
Most retailers today plan far in advance — from 52 weeks to as much as 3 years — for truly innovative products. Planning so far ahead of the selling season has advantages, of course, but it can also be detrimental to your business, especially if there is a drastic shift in customer demand and suddenly all anyone is wearing is athleisure and stretchy pants. Seemingly overnight, casual comfort wear is on the rise and formal wear is down 100%.
The more we learn from the customers and what they want, the more we must respond by giving them the products they are looking for at the right time, wherever they like to shop, whether it be in-store or via TikTok.
For sure the pandemic exposed planning teams, but it also uncovered the reality of planning too far ahead without the support of data and technology to help predict what the customers might actually want. Sales history and past-season trends are just not enough for planners to build an assortment plan, and let’s be clear: gut feelings can only carry a planner so far.
Planning a product mix a year out, without the right tools, could break your business. And your planners will most definitely blame themselves. Forget about changing your buys once the retail landscape changes or another crisis debilitates retail. Flexibility is nonexistent in-season, and getting out of an order is as heart-wrenching as throwing away your very first, completely worn-out, tattered-and-destroyed designer bag that you bought with your first paycheck.
Unless you are an off-price retailer like TJX or The Rack. Because they are winning.
Let’s pause for a minute and take a deep dive into the treasure-hunting world of off-price retail. Planning product assortments based on actual lead times (versus seasonal calendars) while also capitalizing on the fact that most retailers need to get out of inventory that they can’t move at full price is not revolutionary. But it is genius and completely unconventional compared to traditional retailing.
Not only are off-price retailers buying excess products that full-price retailers can’t sell (or goods that shipped late because of supply chain disruptions)…they are also giving traditional retailers a run for their money.
Working on an in-season planning model and a weekly open-to-buy (OTB) that allows buyers and planners to adjust to shopping trends almost immediately changes the way we think about long-range planning and seasonal plans. I asked one of my merchant friends at an off-price retailer how often she was buying products. She said, “Every darn day.” Imagine that for just a minute.
Here is the beauty of an off-price model:
Lastly, off-price planners and merchants work much closer to market by developing and buying products based on the actual lead times of the business. If it takes three months to develop a warm and cozy fleece sweatshirt, the planner works back three months and that’s when the order is placed. The order can be placed in June for a September delivery. Three months versus 12 months can make all the difference in the world when it comes to trends and customers’ buying behavior.
The off-price model is liquid because of the ability to plan in-season. The moral of this story: don’t discount off-price retail, and definitely take a page out of their book.
Imagine if we actually did free up more OTB to buy closer to the season and have the ability to immediately shift into products that customers want. Repositioning a planner’s focus from weekly/manual inventory management and analysis, constantly reviewing incomplete data, and buying a year or more ahead could give retailers a new lease on life.
It’s time to save our planners. It’s time to free them from analysis paralysis and give them life again.