The importance of timely retail planning by all stakeholders

The importance of timely retail planning by all stakeholders

Retail Financial Planning Process

The Financial planning process can start with a 5-year high level plan to set a strategy for the longer term. However, most retailers start their detailed planning 18 -24 months ahead of the planning season. The optimum, of course, is to plan as close to the season as possible, as every day in retail we are a little bit wiser, however that is a luxury few of us can afford.

Typically, the longest lead time departments lead the way, and the temptation is to plan those in isolation, but it makes sense and is prudent to at least get an overall framework of the big picture. All departments are going to kick off planning on a forecast, but this can be refined as the current season closes. Best practice is to keep an audit trail of the changes you make, so you can see the thought progression with the reasons why.

What typically holds Buying & Merchandising departments back?

The impact of the delivery of a late Financial Plan can provide a big impact on progressing at the necessary pace.  The Buying & Merchandising team work on their lessons learnt, what went well?  What went wrong?  What had the best sell through?  Where did they miss potential?  What had the worst markdowns and hit profitability. What’s predicted to be on trend?  What’s going to fall off a cliff?  What key items are going to provide consistent business? Then there’s the sourcing strategy, which suppliers are on form, where are we going to get the optimum mix of competitive cost prices, good quality, flexibility of supply

There’s a huge amount of thought goes into this first Financial plan, but the B&M view needs to be ratified by the Finance view of the future. How are store locations expected to perform? What’s the view on web growth? Is there a store opening/closure programme? All things that are not going to affect the overall product view, but could fundamentally impact top line numbers and volumes to buy. All too often we come across, companies where the Finance view is supplied too late. A season can be almost bought before the numbers are reconciled, leaving departments over/under bought, closing up carefully planned in season open to buy, opening up buys that can’t be filled.  It’s all about PROCESS.  Buying and Merchandising is where accounting and gut combine, but it has to be based on a process which allows all parties to fulfil their side of the bargain on a timely basis.

Planning Timetables & Milestones are key

Setting out a planning timetable, with the associated milestones which allow enough time for review, rework and to carry out cross department reconciliation. Yes, it’s an iterative process and yes, a plan is only as good as the day it’s written. Soon enough, as we progress into the season, we’ll be reforecasting based on actual sales as they come in, running with the goodies and trying to curb back the not so good, but at least if we’ve worked on the plan together, everyone has a fighting chance as the start point was agreed by all.



About Roz Greaves

For over 20 years Roz has worked at Merchandise Head / Controller   across many different retailers she now uses that deep retail expertise to assist in her current role as Senior planning consultant at Island Pacific, where she has worked for over 9 years working with many retail global brands consulting and implementing the Island Pacific SmartPlanning suite such as Superdry, All Saints Altar’d State, Dune Group and Primark.  Roz brings both practical application retail acumen to any project she is involved in.