Ready to become a Planning Master Chef

By August 2, 2019 September 12th, 2019 Staff Picks
604FDA - The FIND Predictive Retail AI Blog

Ready to become a Planning Master Chef

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13 min read

Before I get right into the news today, I’d like for you to imagine yourself in the South of Spain, the cool breeze of the Mediterranean Sea air mixed with the aroma of a fresh paella being lovingly prepared…

August 2, 2019

This past weekend, my boys sent me to a cooking class at a specialty cookware retailer that also serves up a great hands-on training series in their attached kitchen… and we made paella.  Not just any paella, easily the best paella I have ever tasted. A paella that with one bite, whisked me away to that distant seaside villa in the south of Spain. The reason? We had the right tools and the finest ingredients to ensure our success.  

My experience in the class made me think of the work that my customers do.  Namely, apparel retailer planning. When I speak to apparel retailers – large and small – I hear one common theme; that they are using spreadsheets to manage their planning, Upgrading Your Current Planning Process with Allocation and buying processes.  

Spreadsheets have become the workhorse of the industry.

 I get it.  They are affordable, can be customized and offer some fairly robust tools to help users slice and dice data and in the hands of expert users, even provided statistical analysis capabilities and unless your company was prepared to invest a massive amount of time and money into a full-fledged planning solution, spreadsheets have been the best option.  

However, the time has come for apparel retailers to re-think their spreadsheet-based approach.  Just as the industry took a massive step forward from pen and paper to spreadsheets, the addition of AI to the planning, allocation and buying process is bringing the same seismic shift in planning speed and accuracy.   As I shared in my recent LinkedIn post, retailers that don’t adapt and adopt are going to be increasingly left behind in an increasingly competitive apparel retail market.   

Cooking with the right tools.

Similar to the epiphany I experienced with that first bite of paella, I realized that having the right tools and the right ingredients made all of the difference in the world.  Sure, I could make paella in a frying pan with dehydrated spices and store-bought fish but having a dedicated paella pan with fresh herbs and fresh-caught seafood took the experience to an entirely different level.  

It’s why professional chefs demand to use tools that are purpose-built for their job. They have exactly the right type of cookware for the dish they are preparing, the right knives with razor-like edges, they have kitchens with the right type of stoves, sinks, appliances, and power to efficiently and rapidly create Michelin worthy meals.   They invest in professional-grade tools so that they can focus on the art of cooking and not be bogged down fighting with their tools.

While they have had their place, spreadsheets are akin to using a frying pan and the spices in our spice racks. It’ll work, but only just.  To get award-winning results, the proper tools and processes are required.  

Results matter.

In apparel retail, just like cooking, results matters. A bad meal and you may not come back to the restaurant.  A bad apparel plan… puts millions of dollars of investment at significant risk with too many dollars going into the unwanted items and too few dollars going into high-demand merchandise. Thus leaving your store operations and marketing teams picking up the pieces trying to clear overstock and missing valuable sales opportunities when a customer can’t find her size or style.  

Just as in a bad meal, if your customer leaves, she may never come back.  She can buy apparel from a wide variety of retailers. Proper planning, buying, and allocation are critical to ensuring she finds what she wants, when she wants it and stays connected to your brand. 

However, without the right tools, planners, buyers, and allocators are not able to perform at their peak.  It is easy to see what tools a master chef requires. What about an apparel planner and buyer? What options do they have to take a step beyond spreadsheets?

A closer look at the right tools, and better results.

Predictive AI.  Predictive AI offers apparel retailers an affordable, easy-to-deploy powerful next step beyond spreadsheets.  

Unlike predictive AI, spreadsheets, traditional data analytics, and trend analysis only look back at historical trends to help planners project future demand and assign the sales budget to buyers.  With thousands of SKU’s, size, style, brand and store locations, the process is arduous at best and typically overwhelming at worst. There is simply too much data and factors to consider. There are too many combinations to optimize.  

A professional-grade tool is required.  A tool that delivers the following benefits. 

New Found Confidence.   The majority of the planning and buying teams I speak with report having a low degree of confidence in their plan’s ability to match the buy to customer demand.  Despite best efforts, years of experience and strong teamwork, they understand that the plan they created is the best they can produce with the available tools and in the time available.  Predictive AI is able to rapidly analyze large data sets and unlike traditional data and trend analysis, it makes decisions based on predicted future customer behavior. Knowing what your customers are most likely to want next is a game-changing development and sets those apparel retailers using predictive AI far ahead of those using traditional data analysis methods and spreadsheets.  

Time-Saving. Matching units to customer demand is the name of the game. Predictive AI rapidly analyzes millions of points of data that comes from a central database.  The analysis provides planners and buyers a level of insight and controls not possible with spreadsheets. Predictive AI “guides” teams, identifying top items to review and providing real-time feedback as teams test and make changes to the plan.  

Team player. Spreadsheets are typically hard to update and share.  Nor do they offer an interface that enables teams to work together simultaneously.  Information and changes are much easier to share when teams are working from a single database and shared interface.  Planners can rapidly share the information with buyers, allocation teams and even marketing. Predictive AI provides the marketing team insights into customers demand when the products are being purchased, empowering them with data to develop their marketing calendars well in advance of new merchandise arrival. 

Instant reporting.  Spreadsheets are slow to update, hard to share and complex ones can be even harder to navigate for many team members.  Shared Predictive AI platforms take advantage of the computing power in the cloud to make it very easy to share plans, sizes, styles, quantity, and brand all down to the individual store level at the click of a button. 

Error reducing. It is easy to corrupt a spreadsheet.  Team members can over right or delete the formula.  Key data can be moved or deleted which unbeknownst to the user, breaks the spreadsheet on an unseen tab.  Manual data import, typo’s, transposing numbers, are all commonplace stories I hear… and fixing a corrupted spreadsheet is its own version of purgatory.  Having an online portal, with a common data set, and formulas that are protected is the recipe for success.  

Higher margins. Predictive AI matches demand with the product at a SKU and store level.  Predictive AI helps teams optimize having the right quantity of inventory allocated which reduces over and under-stocks.  Further, predictive AI has the ability to preferentially move budget to high-margin merchandise based on predicted highest demand.  These are insights that are not possible without the use of AI-based tools — insights that can increase your existing margin by as much as 10% (e.g. 50% margin can become a 55) margin.  As you can see, it is a profound increase that makes an extremely significant contribution to your bottom-line.  

Higher profits.  It follows that if you have the right amount of the right products at the right place at the right time — you’ll sell more (less under-stock) and discount less (less over-stock).  Predictive AI delivers 3-5% higher annual profits by helping planners, buyers and allocators make more accurate and optimized decisions.  

I hope this post gives you some amazingly delicious food for thought (sorry… that pun couldn’t be helped) and inspires you to learn more about the exciting new developments in AI for apparel retailers.  

It’s a great time to be an apparel retailer with all of the new tools and technology that’s becoming available.  But the time is now to upgrade your planning, buying and allocation process with the right tools to enable you to become a master chef within your organization.  

Ready?  If so, we’re here to help and look forward to getting to know you and your business!

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