We’ve been talking a lot about how customer expectations have shifted – customers want personalization, on-demand shopping information, real-time deals, and unprecedented customer service. They demand that the companies they do business with respond when they want, where they want, and how they want. In order successfully respond to demands, companies must redefine how they do business and embrace customer-centricity.
One area of the business that has direct impact on being able to satisfy customer expectations and provide the experience they demand is forecasting and replenishment. To learn more about this area Jim Fields, VP of Marketing at SAP, caught up with Roger Roney, a retail solutions expert and solution engineer at SAP, at Retail’s Big Show hosted by the National Retail Federation in January.
Roger explained that forecasting and replenishment helps ensure that retailers have the right amount of product at the right location and at the appropriate time, as well as that it is reflected back to the supply chain. The objective is to maintain a high level of service so that the customer has that valuable experience but, at the same time, not overspend on inventory just to satisfy that requirement. The replenishment engine takes into account things like the vender restrictions, the requirements for purchasing, the lead times necessary, the transportation costs, supply chain complexity—everything associated with moving a product from point A to B in the most efficient way possible. This is where R&F is having a major impact on the business, Roger says.
Successful forecasting is dependent on having access to the right kind of data, including point-of-sale information, inventory information and assortment planning data. In order to provide accurate forecasting, retailers need to know what’s in the store, what’s selling at what time and what location so that the business can react to the needs of customers within hours. And it is not just about having the right data; it’s about having that data in real-time. The future of retail requires retailers to switch their forecasting and replenishment to real-time.
For more information on the future of retail, check out all SAP’s coverage of NRF and the Future of Retail.