Strategies for improving retail supply chain

Filed in archive General on March 31, 2009

John Roach, Editor of Retail Solutions Online has written a nice piece titled "Four Must-Do Supply Chain Boosters" on the new requirements of the retail companies in this recession times from supply chain perspectives.

As the name of his article shows, he has proposed 4 main strategies to improve retail supply chain. Below I have brought a summary of these strategies:

1. Share your POS data.

If you're not already sharing your POS customer data with your suppliers, it's time to start. Doing so can help you improve merchandise distribution and sell-through, generate significant added revenue opportunities, cut costs, and generally run a more efficient retail operation. (Click here for a story I recently wrote on this topic.) And emerging POS software and hardware technologies are making it easier than ever to create an effective link between you and your suppliers.

2. Partner on data analysis and forecasting.

In general, suppliers are better than retailers at recognizing national trends, while retailers excel at category and assortment planning. Each of them brings a different perspective on consumer behavior and promotion effectiveness to the table - by sharing them, you get a more complete picture of your mutual customers.


3. Plan for a markdown pricing strategy.

Panicked pricing, especially during the 2008 holiday season, has trained consumers to wait for deep discounts rather than pay full price. A smarter approach to pricing: Plan in advance for the possibility of markdowns and incorporate your suppliers into the effort.

4. Evaluate your programs using post-sale customer research.

The companies and their suppliers can use the latest customer research technologies, including online incentive surveys and data-crunching software (as well as your POS data), to assess the effectiveness of the collaborative efforts. They should jointly review the results before they plan the next steps.