Retailers make hundreds of thousands of inventory decisions everyday around what to buy, where to place, and where to fulfill merchandise from− and these decisions are becoming much more difficult to get right as consumer expectations change. As such, retailers are urged to rethink how they make inventory decisions today — prompting the main topic of this event.
Here are three of the biggest takeaways that really resonated with me based on the discussion:
Consumers continue to change the way they shop (buy anywhere, receive anywhere, and return anywhere), which has had a profound impact on how inventory decisions are made. Get it right, you sell more. Get it wrong, you lose sales.
I’ve spent my entire career in the retail industry, in various roles, both working directly for retailers and as a consultant. These experiences gave me an opportunity to view the retail industry through a number of different lenses. As a result, I’m often asked what is on a retail CEO’s mind in today’s current business climate, to which I typically answer, with certainty, one thing: inventory.
Inventory optimization, inventory effectiveness, how to improve inventory decisions in an omni-channel world. Inventory remains the top challenge for most retailers, as seen from the $1.4 trillion inventory problem stemming from lost sales and excessive markdowns. New realities force the need for a new approach. While customer expectations have changed and retail operations and execution have changed, inventory decision-making (for the most part) has not.
The fact of the matter is that inventory is a complex problem and complex problems do not have simple answers.
The importance of solving the retail inventory challenges around out-of-stocks and excessive markdowns is compounded by the recent announcement of Amazon’s plan to sweeten delivery perks for Prime members with 1-day free shipping. Retailers need to take advantage of the store portfolio in order to compete, but in doing so they also need to make sure they’re optimizing the use of their inventory. This means making smarter inventory decisions around buying, placement of inventory and where to fulfill online orders from. The good news? With the advanced technology available today, this challenge isn’t as daunting as you might think.
The problem is retailers have invested millions of dollars in their existing systems to run their businesses. Many of these, quite frankly, are really old. In some cases, even if the systems are relatively new, they likely don’t have the sophistication artificial intelligence (AI) or advanced analytics solutions offer to enhance existing processes.
This creates the dilemma of whether to rip and replace systems to take advantage of new AI solutions, or to augment existing systems with leading capabilities like AI. At Celect, we’ve found that augmenting your existing solutions with AI holds three distinct advantages:
I’m thrilled to share the news of Celect’s recognition in The Leading 100, an annual list that recognizes break-out technology start-ups driving innovation in the fashion and retail industry.
This list is curated by The Lead, a research firm that bridges the fashion and retail industry with the global Silicon Valley to empower the industry’s transition to digital centricity. They’re focus is at the crux of where fashion, retail and technology markets converge – where innovation is shifting behavior and constantly creating new business opportunities.
In an industry undergoing an unprecedented transformation where in-store revenues and foot traffic are in decline, bottom line improvements require a clear understanding and ability to adapt to customers’ ever-changing needs in advance, across multiple channels. That’s exactly where Celect comes in.
In an Amazon Prime world, omni-channel retailers are challenged to manage multiple sources of demand when customers expect everything in stock all the time, whether they are in the store at 1 p.m. or online at 1 a.m. To beat the real-time “last mile” supply chain challenge, retailers must be able to compete with Amazon by leveraging their stores and distribution centers as one unified distribution center to achieve massive margin gains.
In the latest issue of Inside Outdoor Magazine, John Andrews, CEO of Celect, shared how retailers have a huge opportunity to derive more revenue from their inventory decisions and beat Amazon at its own supply chain game.
We are thrilled to share the announcement of Lucky Brand as a winner for the 2019 Retail Innovator Award because of their work with Celect to optimize inventory decision-making! Retail TouchPoints (RTP), the industry's go-to source for the latest retail trends, strategies and technology innovation, has announced the 2019 Retail Innovator Award winners and names Mike Relich, Chief Operating Officer at Lucky Brand, and Miles Barger, Vice President of Merchandise Planning, Allocation, and Inventory Optimization at Lucky Brand, as winners in the category of Data Guru.
In its sixth year, the Retail Innovator Awards honor retail executives and thought leaders who:
“[T]hink outside the box to develop and foster innovative concepts and strategies that help move the overall retail industry forward.”
There were 100 nominations in total and the list of 18 winners was announced at today’s Retail Innovation Conference in New York City. Those who attended the event heard directly from Miles Barger, who shared Lucky Brand’s success story on using advanced analytics to optimize allocation and store fulfillment using Celect.
“Algorithmic retailing is the application of big data through advanced analytics across an increasingly complex and detailed multichannel retail structure to provide for customer expectations that are driven higher by consumerization of retail.” – Gartner, Inc.
Henry Ford once said, that "a customer can have a Model T in any color they want as long as it is black." This worked when there was only one game in town, but when General Motors started offering consumers options, the rules of the game changed. A similar shift is now happening in retail as traditional brick-and-mortar retailers offer a variety of fulfillment options for consumers demanding faster, cheaper, and more convenient delivery options.
Yet, providing these new fulfillment options successfully, whether it's ship-from-store (SFS) or buy-online-pickup-in-store (BOPUS), requires a new way of thinking about existing processes, organizational frameworks, and technology. To help prospective clients tackle these new retail processes and changes, Celect has partnered with top-tier retail consulting companies across the globe who know change management, retail, and I/T. With these new alliances, our clients have trusted advisors who can help them with the process changes needed to reap the benefits of artificial intelligence and machine learning (AI/ML) technology for successfully tackling inventory and fulfillment challenges plaguing retailers today.
Artificial intelligence and machine learning (AI/ML) technologies are transforming businesses. In fact, the global annual spending on AI by retailers is estimated to reach $7.3 billion by 2022. However, along with this growth comes hype, uncertainty and questions around what AI/ML can really do for retailers today.
One thing, if anything, is certain: AI/ML in retail is here to stay.
For those of us who have been in retail a long time know this isn’t the first time data science was used to address retail business challenges. In the early 2000s, data science was applied to common problems within retail merchandising and the supply chain with mixed success. Markdowns were optimized, followed by statistical forecast-driven replenishment, then price and transportation optimization.