Retail Planning Process

Retail business is not only limited to one store somewhere in the corner of city. On order to run and grow retailers are running sale from several stores in different geography. Many of the are opting different channels as well like e-Commerce, Whole sale. In order to manage such business retail planning process help. On very high level planning process in divided into four kind of plans.

• Strategic plan
• Merchandise Plan
• Assortment Plan
• Execution plan

Strategic Plan

Strategic plan is first plan where, planning with long term vision start. It may play key role to set organisation business model. For Example, A company want to promote new fashion to consumer to improve demand. They can influence customer with advertisement and promotional sale. Base of social economical situation retailer can make a plan to set inventory turn over targets. Or If banks are more liberal on interest rate more cash flow can be achieved by taking loan from bank. Even salary structure or property on rent are are influencing to introduce more sales executives in order to increase sale. Lower rent on property in high demand area can help to open several stores. Key performance indicators for strategic plan is Year on Year profit, Operating margin, turn over.

Merchandise Plan

Merchandise plan is about introducing right assortments according customer demand. Depends on season, weather, culture and population density right merchandise getting decided. When store location is different country fashion articles varies a lot. To meet the customer demand with right quantity and right time. Merchandise planning in necessary for retailers. Several analytics based on historical sales, store clustering, similar articles sales gives estimate to project demand.

Assortment Plan

To maximize the sales and profit, assortment plat play measure role. Depend on product type assortment planning calculation changes. When product is getting introduce first time to store and it does not have any sales history it becomes difficult to estimate sale. In this case planner tags similar product best matching with new article in same class. Its give suitable Rate of Sale (ROS) by week or month. For carry forward to next season articles Rate of sale if more accurate compare to old new introduced one.

Setup Initial allocation for product, matching merchandising financial targets, organization level sales target tally are key objectives of assortment planning. It happen for future based on current and historical data received from point of sale of inventory system. Better data quality on category, product, stores, store clustering, product life of line and sales rate give high accuracy in assortment planning.

When article is introduced and exit in season or next season duration between Exit date and introduce date is called Life of line (LoL) of the product. Lead time between order placement and delivery to store is Lead Time normally it remain same for class or category level.

Planner define initial allocation based on rate of sale and Life of line. Ex. when Rate of sale =20 Product/Month, Life if line is 5 month, Lead Time is 2 month. If season Turn key is 2.2.

Initial allocation = ((RoS * Turn key)* Min ( LoL or Lead Time ) )

Value = (20 * 2.2 min(5 and 2)) = 44*2 = 88 Units

Even some complex calculation or needed to drive till store.

Execution Plan

When initial allocation is set and store is loaded with products. Sales and purchasing, on order started. To adjust the inventory accurate as per real time need Execution planning system helps. Retail execution plan drive by methods, in season planning and open to buy.

In season Planning : In season gives next time frame demand project at product level for further purchasing. In case over stock if need to do markdown in season signals for that. Aggregated demand for several store and sales channel are accumulated and purchase order for buying is send to manufacturers. Current sales projection and required inventory versus actual inventory in hand at article level gives control to manage inventory easily. This transparency and functionality is well designed in Ryndata Retail planning software

Open to Buy : From top level view of inventory in hand, inventory demand buy month, On-Order, Beginning of month inventory, Open to buy are key to control retail business. Based on sales fluctuation and volume of data planner can plan on weekly or monthly basis. When sale is steady and need cost effective solution Monthly sales, Stock and intake (called MSSI) can help. For big organization with granular control Weekly sales, stock and Intake (called WSSI) works. In both case end of cut over activity monthly or weekly inventory all data are reconciled and open to buy quantity is carefully monitored. Know more about OTB KPI.

These key planning techniques makes retail business successful. More control on cash in flow, over inventory and below inventory can be achieved. For more detail on software solution connect Ryndata.com

Ryndata retail planning platform is excel and OLAP based solution. It supports for small data set to terabyte of data. Integrated solution gives end to end planning platform with data modeling, data warehouse building, Planning process, Data connection with source and target software. Easy excel plugins gives data in user excel from database for planning and monitoring.

Data models for reference:

Name	Description	Domain
Default BI Model	Quick BI	Business administration
Retail Planning	OTB Solution	Retail
Retail Planing	Planing retail BI
POS Intelligence	Business Intelligence for point of sale data.	Retail industry
Fashion Store	Fashion Store BI
MSSI	Open to buy planning	Merchandise planning