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Tuesday, 30 September 2014

Demand and Supply - The Balance Act of Retail


Historically, the retail market has often run scarlet with a string of skewed trajectories, to favor either demand or supply. And as with any unsteady, volatile relationship, it has remarkably rebounded from one side to the other, with major economic implications. The most weathered and prominent page from the book of market misadventures would be the period of the Great Depression in U.S.A between 1929 and 1930.  An overconfident market outlook without airtight economic policies lead to a swift and sudden stock market crash. The abundance of manufactured goods and materials with little or no demand led to investment prudence born from panic. 

This led to the makings of the very first economic bubble the country had ever experienced. The market crash exposed its anemic financial composition and ensured that the public’s investments were washed-out by the federal banks. 

The universal and most basic theories of demand is what determined World War II playing a crucial role in U.S.A’s recovery. The ongoing war and its increasing scale induced a large amount of government expenditure being routed in manufacturing of military weapons and technology. It also helped mobilize manpower, creating more jobs and rekindling the economy. Before the American entry in the war, its market once again stabilized with defense spending and military deployment, satisfying global demand and thus obliterating the last traces of the Depression. The U.S. went on to experience the greatest industrial and economic boom till date, growing by 37% in 1950s.

The above example represents the purpose and tumultuous two-sided effects of the proverbial coin. In this case, the coin would be the retail market and its consumers, the two sides are demand and supply. It teaches us the perils of flying blind without understanding the consumer motivation to satisfy his need and desire. On the other hand, it reminds us that strategically developing supply channels can swiftly turn the tide in your favor, leaving competition panting leagues behind you. 

The deep penetrative expansion of the global market, producing varied product / service options from different geographies, has rendered today’s retail business to be more customer-centric. For retailers, the necessity to adopt and apply technology has magnified multi-fold. It arms them with the right Business Intelligence (BI) to easily capture and read complex customer data. This information is further broken down and analyzed to asses various customer behavioral, conditional and economical patterns and potential.



It helps them determine accurately the DEMAND:
  • What are his customers buying?
  • When and how much are they buying?
  • Why are they buying and for whom?
  • What are they buying from competition and why?
  • When will they come back to the store and for what?
  • What are their product preferences and how receptive they are to product modification?
  • What is the present and future wallet size of the customer?
  • What are the new customer demographics that can be targeted?
  • What promotions strategies and channels work for my business?

Basis the answers derived from the questions above, the retailer can optimize resources and his SUPPLY chain:
  • How many product lines will he need to manufacture/source in the upcoming season/cycle?
  • Which are the best vendors for particular materials or project?
  • What should be his pricing strategy and how best should he plan the mark-downs?
  • How much is the old stock and how soon can it be processed or sold?
  • How much is the dead stock and how best to utilize it?
  • Which are the fast moving locations and how many distributors will suffice?
  • When, how, where to restock at store, warehouse level? 

Retailers can themselves or through expert buying teams amalgamate the science of determining economy growth, government policies, sanctions and market growth, risks and recovery methods with the art of understanding customer’s motivation, aspirations, likes, dislikes, future needs and market trends. 

Proven to be the catalyst of this process - ETP V5 Retail Software Solutions successfully establish the balance between the demand and supply of a retail business. These can be implemented comprehensively or modularly, in premise or on the cloud, on virtually all platforms. This makes it easier to integrate the right Business Intelligence tools that optimize present and future market conditions, with respect to customers and competition both. ETP V5 Retail Solutions help retailers get it right in retail with stable, scalable innovations that drive operational excellence and increase profitable growth.
 

Tuesday, 23 September 2014

A Millennial Match Made in Retail Heaven!


The term ‘Millennial Retail’ seems to gather popularity and confusion in equal parts. Suddenly one finds themselves floating neck deep in ‘quick-fix-home-grown’ millennial solutions which threaten to make necessary relevance rhetorical! But the right retail technology applied through the right business practices can help navigate these choppy waters and turn the tide to one’s advantage, harnessing the industry potential that lies within this world-wide phenomena.

Industry experts project one-third of the global retail revenue to be contributed through the millennial generation by Y2020. The good news is, this number will permanently be on an upward trend hereon. But the challenge lies in managing expectations.

Millennials expect quick service, this is often the key distinction between a sale and no sale situation. Apparently, patience is not a virtue to hold dearly in the new age. Retailers are beginning to understand that their in-store experience is only as good as the customer wait-time it reduces. Quick Billing and express counters ensure the instant gratification millennials seek. Your POS stations are battle grounds combating the biggest deterrent to your conversion ratios. This means there is no down-time and service continues even in offline mode.


A personalized shopping experience has the multi-fold effect possible almost exclusively through millennials. Since they are more open to share information about their preferences and often know exactly what they want, you populate your CRM database with more accurate data. This leads to better promotions and developing key value-add services that make your brand personable and closer to your customers. Also, help spread the love! 19 out 20 millennials (globally) own smartphones and are active on social media. That makes for a lot of first impressions, daily, through multiple networking and information sharing sites.

As a group, millennials favor engaging with companies and brands on social media and also prefer receiving hyper targeted content. With sales soaring as a result of positive social media influence, it is no wonder that most marketing budgets today are skewed towards building an Omni-channel presence for their organization. So when your customers exit your store, they still carry your brand experience (quite literally) with them, on their smartphones, tablets and laptops. Within the store, the staff uses a similar mobility to lookup customer info, frequency-regency of purchase, buying history like preferred products and payment modes. They now hold the right information to help customers make better choices, deliver value through applicable Promotions, up/cross-sell and conclude the transaction from anywhere in the store. Again saving their time and fortifying customer loyalty which induces and influences more people to try your products and services.

It is important to note that although the retail market is a dynamic arena, the millennial trend has pushed to permanence certain course correcting measures which were inevitable. They include striking a better balance between demand and supply, optimizing supply with better visibility and control over production, process and people to satisfy and supplement existing demand. A centralized data management system enables you to analyze better, faster and get that much closer to your yearly projections. The necessary operational overhaul, in reality, has led a more enlightened practice and pace of doing business. And you are sure to be the quickest to the draw, with those young guns at your side.