Yet many waste valuable resources by not providing their teams with the latest tools available. Currently, there are business intelligence (BI) packaged solutions that provide numerous predefined reporting and inquiring software tools for the retail environment. Some BI vendors have over 500 standard reports to utilize. These reports in the hands of experienced buyers can boost margins and save precious time and money.
Traditionally, factories have manufactured merchandise based on a standardized approach. The ratio of sizes, for example, remains the same for all orders without regard to actual demand or sales history of the product. Too often this leads to retailers not having enough in-demand sizes and too many sizes that can't be sold, which end up on the markdown rack.
One BI tool that improves inventory management is the size management "performance tracking report card." Retailers track size performance of what is sold at regular, promotional and markdown prices. The scorecard tool creates a custom size matrix that enables merchants to build orders that better reflect actual performance. This can have a substantial impact on both turnover and maintained gross margin.
Improving On-Time Delivery
Another problem retail buyers contend with is that of irregular or delayed product delivery dates. If a retail organization receives 80 percent of its orders with only 40 percent of the selling season remaining, markdowns of those products are inevitable.
On-time product delivery not only avoids unnecessary markdowns, but also puts the retailer in a position to increase sales by avoiding stock-outs.
BI tools can build a scorecard that tracks receiving dates against actual arrival dates, providing valuable assistance in monitoring and scheduling upcoming purchases.
One well-known fact is that 90 percent of retail fashion merchandise sales are from products less than 90 days old. To apparel retailers, fashion merchandise is as perishable as grocery store produce. Also, a surprisingly high percentage of sales of hard line or basic merchandise come from fresh products. Business Intelligence scorecards that track lifecycle management can help buyers track item movement of many classes of products.
These are just two examples of highly targeted BI tools designed by software vendors that can help retailers achieve higher sales and increase efficiency. The intelligent and informed manager would do well to investigate the wide variety of tools offered by many different vendors. The flexible reporting capabilities of Business Intelligence make it a most effective and economical technology strategy to adopt in the retail industry.
Jim Malone is project director for Tech Global Partners. You can learn more about Tech Global partners by visiting www.techglobalpartners.com.