Paul Rogers examines how IT can be the key to retail success in the brave new world that is 21st Century Christmas shopping
UK consumers were predicted to spend £4billion over the recent four-day Black Friday / Cyber Monday weekend, with 50% of this expected to be spent on Black Friday alone. This highlights the fact that consumer spending over the Christmas period in the UK is radically different to the Christmas shopping trends of only a few years ago. Gone are the days of a steady increase in consumer spending in the run-up to Christmas, followed by the peak of Boxing Day and January sales, which proved often to be one of the most lucrative times of the year for retailers. Now, customers hit the shops in January ready to see what new stock retailers have on offer.
That’s not to say that Boxing Day sales are a thing of the past. In fact, the UK spent an amazing £3.74billion at Boxing Day sales in 2015, not to mention the £728 million spent by shoppers online on Christmas Day itself last year, with 58% of this spend via mobile devices. But, what is evident is the ever-evolving nature of consumer spending, with the Black Friday event itself already transformed into a week-long shopping crescendo. What this means for retailers in particular is that they must not only keep pace with changing spending patterns, but in order to maximise profitability, they must stay one step ahead of both consumers and the competition.
The need for timely, informed decisions has never been more pressing, with optimum business agility and flexibility the order of the day if retailers are to predict and effectively respond to customer demand, increasing revenue in the process. What this requires is better insight into the business, something that the right software can guarantee, providing a much-needed 360° view. Your software should help you improve control over all areas of the organisation, from finance through to third party logistics providers, and streamlining processes to enable business leaders to focus more of their time on the real value-add, strategic decisions.
By providing a previously uncovered level of insight into the business, the right solution will ensure that retailers have the right inventory on hand to meet customer demand. It’s also possible to automate stock purchasing and replenishment, in line with forecasts, and the levels of accuracy that are achievable with regards to demand planning mean that inventory can be reduced substantially, leading to comprehensive cost and efficiency savings.
By putting in place a collaborative, centralised IT solution, retailers can consolidate information from across the business, which is the key to achieving deeper insight and the resulting control. For example, it’s possible to centrally manage inventory not just in one location but across multiple warehouses and locations, both virtual and physical. Modules can also be implemented which link systems to external databases or web stores, alongside third party logistics systems, not to mention POS and barcode scanning solutions.
The extensive reporting and analysis capabilities that are part and parcel of the best solutions on the market provide unprecedented levels of demand planning accuracy, enabling precise preparations for future shopping extravaganzas. This allows retailers to better anticipate customer demand, as well as enabling them to put a clear strategy in place in terms of when they might choose to begin their own seasonal promotions, helping to outmanoeuvre the competition and to grow profitability.
The clear, instant insight afforded by effective IT solutions, which are specifically designed to address the challenges of the retail sector, is what’s needed if retailers are to stay one step ahead of the rapidly changing consumer habits of the 21st century. By consolidating information across the business, reducing complexity and optimising processes, retailers can reap the rewards. And, in a retail climate where Singles Day in China saw an astounding $18 billion spent in just one day, the rewards are clearly there to be reaped.
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