A Simple but effective approach to retail planning
What Matters?
There are a lot of buzz words around planning, but at the end of the day, what do we really want to know? How much are we expecting to sell? How much stock do we need to support those sales, across time and therefore how do our deliveries need to be phased?
Whether we think in retail value, units or cost is determined by the nature of our business. For many, retail value is the classical approach, but unit planning is suited to a vertical operation and where stock holding capacity is key. Accountants love cost but it also has a place for some merchandising teams. The key is to opt for one and stick to it, keep your planning & forecasting as straight forward as you can. If nothing else, implement a WSSI, the weekly sales, stock and intake view of the world. Work at a low enough level of the product hierarchy to direct your spend appropriately but not so low that you’ve adopted a monster that you can’t practically manage!
Seasonality Considerations
Is seasonality important? It’s not mandatory, even in a fashion business, where it may be that your Product hierarchy does the seasonality job as well. And if you do break down the stock buckets, it doesn’t have to be Spring/Summer versus Autumn/Winter (Fall), it may be plain continuity versus fashion.
Channel Planning
Do we really need to plan by channel? Isn’t ecomm just a store? Plan high, break the intake down further in an Assortment tool or even leave it to an operational solution. Use your WSSI to get the right total level of stock at the right time. However, in this multi national trading world, where ocean miles are involved, do plan at a Territory level. More work now, means less potentially costly stock overs/unders later. How frustrating to have stock in the UK but run out in Europe or the US.
Stick to the basic principles, but mould it to what’s right for your business.
Simplicity is key
We’re all tempted to layer on detail, but what return is this actually giving us for the work involved? What are we trying to do in an Open to Buy or WSSI which really belongs somewhere else? Do I need to forecast profit in a Open to buy / WSSI? with the extra work that entails? Surely if I have an in margin plan, and a markdown plan which I stick to, as best I can, the season out margin is a given, providing I account for an opening stock margin as well, which is where people do fall down.
Excel accommodates a basic Open to buy or WSSI fine, but what happens when someone accidentally breaks a formula, what happens when the references to the multiple sheets break down. Invest. Try to make life easier. Leave all those manual updates behind, have faith in the numbers you’re looking at but above all allow yourself the ability to duck and dive with trade, shift monies around and easily see the impact at Division, Company level etc. Tuck in your target stocks, and immediately see where you need to phase deliveries. Open out your target stocks, and immediately see where you need to buy more.
The Open to Buy / WSSI is all about giving you the information to support your decisions. Nothing can replace you and your interpretation of the information it’s providing, but it gives you the information quickly, giving you a bit of breathing space to get your actions in mind before you go to that all important trading meeting!