Strategic retail planning for success in Q4

by | Nov 9, 2022 | Omnichannel, Retailers

The holiday season is so important that retailers must plan all year to ensure it goes over well. It’s one thing to consider the products you want to carry, and yet another to make sure you have all the systems and processes in place to serve your customers sufficiently.

If you need new systems and processes in the next nine months so your November and December go off without a hitch, now is the time to pick your options and set the retail planning process into motion. Of course, you’ll need plenty of time to get your holiday products and promotions figured out. Also, you’ll need ample time to get any tech or software deployed, get your team up to speed on new processes, test yourself in back-to-school season and generally work out the kinks so you’re ready to go by the beginning of November.

Think like a consumer

When you’re deciding how to approach retail planning for an improved Q4, think like a consumer, not necessarily like a retailer or vendor. According to the results of a recent annual benchmark survey conducted by Retail Systems Research (RSR) of hundreds of retailers, suppliers, distributors and logistics firms, more companies are considering overall consumer behavior when doing strategic planning in retail. In fact, 74 percent of respondents said consumers’ buying preferences are the primary external force impacting the retail industry.

And what do consumers want? They want the path of least resistance that caters to their personal preferences. For example, consumers may want to buy your product at a certain price, purchase it online and have it delivered to their home or buy it through an eCommerce site and pick it up in store.

With consumer buying preferences in mind, there are three important issues for retail planning to consider:

The speed at which consumers get their products. Amazon, and especially Amazon Prime, have been spoiling consumers. More and more consumers expect retailers to offer two-day shipping at the very least, and many actually prefer next day shipping or even same-day shipping when it’s available. In addition to having products shipped to their homes, consumers want the option to buy online, pickup in store (BOPIS).

The internet is a vast marketplace where consumers can buy whatever they want, quickly and easily. Amazon, with its two-day and same-day Prime delivery, is the single largest force with the greatest impact on consumer satisfaction and expectations. To maximize the potential for market share, retailers should improve their shipping speed and variety of delivery methods as part of the retail planning process. Some already offer free shipping for orders that meet certain requirements, while others, like Walmart, are adding a two-day shipping option.

Strategic planning for inventory management

As retailers streamline and combine all their sales channels and inventories for greater visibility, are you looking at your inventory levels across all channels? How do you prioritize sales through certain channels if you pull from a single inventory?

During peak sales periods like holidays, there are occasions when a flood of online orders for a particular item occurs almost simultaneously. With all the orders coming in from so many channels, customers might not find out about shipment delays right away. Retailers need to figure out how to share sales information across all channels and avoid this kind of problem.

Content and product descriptions. This is another significant opportunity businesses should consider in the retail planning process. Do you have enough detailed item content? Do you have clear product photos, videos and write-ups? Companies put so much item information online, but is it relevant to what the customer wants to know?

The better the product information available online, the more likely the customer will believe your product will live up to their expectations. Better information also tends to mean fewer returns. Both the quality and quantity of item details matter.

Additionally, what we call “social proof” is incredibly important, and that often comes in the form of user reviews. Customers look for reviews on multiple sites and typically want to read both the five-star and one-star reviews. They’ll make a judgment from that information on whether or not to move forward with their purchase.

Although 100 reviews would be great, having at least seven reviews is good, if possible. Seven seems to be the magic number that is considered to be “enough” to satisfy consumer curiosity. If there are no reviews, people are much, much less likely to buy.

Retail planning and BOPIS

Buy online, pick up in store (BOPIS) is a growing priority in retail planning to make inventory available to consumers faster. BOPIS lets consumers pick up an item almost immediately, or even wait a few days to pick up their order. Giving the customer choices will not only increase their satisfaction and give your store or fulfillment center time to get the items together in the right place, before the customer comes to pick them up.

I realize not every retailer is doing BOPIS, and many of those doing BOPIS aren’t necessarily getting it right. These days, though, it’s table stakes for playing in the omnichannel space.

If you want customers to enjoy your retail brand experience on every channel (and potentially increase in-store sales when the customer comes to pick up their items), BOPIS is a crucial element in your strategic planning.

Breaking down silos and roadblocks

One challenge in this channel is that retailers’ online and in-store point-of-sale (POS) systems can often be different and not necessarily “speak” to each other. That means your ability to gather customer and sales data into one analysis is limited, and you could miss out on opportunities to upsell or provide white-glove services to your customers.

In the RSR survey mentioned above, one of the problems that came up regularly for retailers, vendors and manufacturers was managing legacy systems that may be holding back omnichannel strategies.

When your systems are disjointed, it’s impossible to cater to the consumer. Let’s say someone buys a TV online and travels to the store to pick it up. Depending on the store, the consumer just shows up at the customer service desk and pick up the TV. So how can you upsell that order? How can you ensure the store has an accessory cord or HDMI cord waiting nearby, or a store associate recommends a soundbar to go with it?

You want to cater to consumer needs online before the purchase actually begins, but you also want to be able to deliver that experience in your stores.

Strategic retail planning helps you stay ahead of the selling season

Competition between retailers will ramp up to offer the best deals on the hottest items and offer the most ways for consumers to get the products they want, where and when they want them.

Even so, there is plenty of time between now and Q4 to prepare strategic plans for for the next holiday season. Know your customer, then identify your gaps, plan where you want to go, find the tools (and vendors) you need to get there and test everything to ensure you’re living up to consumer expectations.

SPS Commerce can help retailers connect systems, provide additional product data and content, and even improve delivery speed while reducing their costs. If you’d like more information on how to do any of these things within your company, please contact an SPS retail systems expert or request a free demonstration of our Analytics product.

Brandon Pierre