Yahoo Movies The Retail Roller Coaster: Nailing Demand Forecasting and Optimizing Inventory to Grow
Thanks to high interest rates, constant supply chain disruptions and rapidly changing consumer behaviors it’s hard to get inventory management right, which is crucial to maximizing profit margins.
To discuss the biggest challenges facing brands and retailers today, how to adapt to shifting priorities, the biggest opportunities for retailers and wholesalers and the and strategies to address the complexities, WWD’s executive editor of strategic content development, Arthur Zaczkiewicz, moderated a panel of experts including John Shapiro, senior vice president of product at Lightspeed, Andrew Graham, senior director of wholesale and custom at Marine Layer and Carson Searcy, sales manager and buyer at CBS Sports Inc.
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Notably, both partner with NuOrder by Lightspeed, the business-to-business marketplace platform that connects retail buyers and suppliers in real-time.
Choosing just one challenge as the “biggest” was a difficult task for the panel who said they could point to a lot of different things. From his perspective, Graham said managing inventory and figuring out how to both stay lean with inventory but also be able to read and react to the business while monitoring budget and planning, is topping the list of challenges. It’s a balance, he said, and every year looks different as consumers change priorities. Searcy agreed citing his small business located in a rural part of the country, which needed to consider what products consumers would be looking to buy while also considering price-matching brands.
“Inventory is not easy even for the biggest brands and e-commerce retailers in the world,” Shapiro said. “We see our role as bringing in capabilities and recommendations to help inform how you can navigate a very narrow path. I think the point around getting to the exact right amount of inventory and managing your cash is a pretty big one.”
To keep customers interested while staying true to its core, novelty assortment, Graham said that Marine Layer develops monthly drops throughout the year that are highly seasonal. While most of the products is from the brand’s core line, they also sprinkle in some exciting new designs that relay the brand’s signature voice. The brand also focuses on meeting the customers where they are. Graham said that with Amazon to compete with, it’s often difficult to meet consumers’ expectations for shipping but can fulfill orders conveniently through its omnichannel.
“We’re doing our best to make it as comfortable and friendly, so you have an experience when you interact with anyone at Marine Layer stores or our customer service team, but delivering on those expectations as well,” Graham said. “Another piece is sustainability which has been a continuing growing demand and if you are a new brand and you’re trying to get into this world, you need to have a sustainability story, you need to be doing something or you’re not relevant right now.” For its part, Marine Layer has been certified as a B Corporation and continues to set goals to improve as it prioritizes people and the planet over profit.
Shapiro said NuOrder by Lightspeed’s solution powers the store associates to better serve the customers where they are. Through its technology, store associates can see what products are available across locations and even drop ship directly to the customer. The platform’s supply chain visibility connects selling deeply, allowing a company to see what’s selling in specific stores and through wholesale. The valuable intel can prompt a merchant, or brand, to initiate a replenishment of a product that’s selling well because they are able to see that real-time inventory status.
These capabilities are tools that Searcy said his team uses every day. As an example, he said that for customers needing to special order items store associates can easily get them the style in under a week.
Being able to satisfy a customer demand exactly, like with a special order, is critical, said Shapiro, who said that selection and convenience are the two areas where he sees the biggest opportunity for retailers and brands. “If people are emailing in orders calling in orders, it’s just a lot of overhead versus being able to operate a lot more efficiently. We power the assortment planning processes, the preseason planning processes for most of the major department stores in the U.S. and folks utilize NuOrder to drive that process so it makes it a lot more efficient and effective.”
Graham said that by using NuOrder, Marine Layer has been able to continuously amplify its presentation game by making sure it is giving buyers the best possible experience of buying and aligning with what their customers would want. The platform, he said, makes it clear exactly what the brand is selling and gives buyers confidence in what they are buying.
As companies continue to struggle with balance of inventory, one of NuOrder’s most popular features is its endless aisle concept which frees companies from having to sit on inventory. For example, an e-commerce site might never take possession of its inventory at all, rather having home orders ship directly routed by the brands or distributors. For a small business, the technology could be the key to scaling over a hump.
Inventory flexibility, said Graham, has also been a big unlock for Marine Layer. At times, the brand’s digital ad would increase sales for a specific product on a certain channel and with NuOrder, the company was able to look into shifting inventory to stores from wholesale channels or stores to meet the demand. “And that has been a really big opportunity for us because we also happen to have a couple of warehouses across the country that cater to different needs.”
From a retailer’s perspective, Searcy shared that NuOrder enables a more efficient inventory planning process. Not only can the company see ship dates to restock popular products but provides AI-powered predictions for forecasting.
“We’re not using a ton of forecasting,” said Searcy, who points to NuOrder’s ability to share insights on how a product is doing in certain regions and what that could mean for CBS Sports Inc. “It might be something that I can’t see, but Lightspeed can pass along that information to us and that’s huge because that lets me know what other people around me are doing and what the general areas are doing.”
Technology, said Shapiro, can make planning more efficient and effective as companies invest. “I think there’s lots of scenarios that if you are a busy and unoccupied purchasing manager, or you know whatever your role might be, you might overlook or not see it and technology can make you a lot more efficient to make you more productive at your job.”
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