Tag: sell through

Demand Intelligence Among IDC’s Top 10 Retail Predictions

Just read a great article by Amanda Ferrante based on an interview of  Leslie Hand, Research Director at IDC Retail Insights for Retail Touchpoints. The interview focused on providing new strategies to optimize the value of IT in 2010, as IDC Retail Insights unveiled its Top 10 Predictions for the retail industry. The IDC report explored several hot retail topics, including social commerce, mobility and how demand intelligence is driving inventory management.

In the interview for Retail TouchPoints Leslie expanded on the IDC predictions. The first set of points were around the impact of social networks and it sizeable impact in retail.  Everyone is talking about social networks, and we all know it is like the iceberg that sank the Titanic. We see a small piece and there is a big chunk underwater! (bad analogy!) But no ones knows the true financial value of this. I guess the analysts counsel is to chase this bubble it and stay on top of it, so that when folks figure out how to monetize it, you are positioned well.  Just hope that we are not standing there with a load of tulip bulbs!

The interview mentions Demand Intelligence as being critical. Leslie says that retailers with capabilities for sensing demand were able to fine tune assortments, reduce demand forecasts and adjust prices and promotional programs to maintain margin expectations given expected product sell-through issues. On the flip side, many retailers were left holding the bag, as they did NOT have the capabilities to adjust to the changes. As consumer spending shifts and demand fluctuations grow, Demand Intelligence is mandatory to run a a profitable business.

In Leslie’s words “Many of the retailers who were not able to adjust expectations soon enough, because of the timeliness of demand data or insufficient analytics, remedied the situation by investing in better forecasting and planning tools in 2009. Part of the success this past holiday season can be attributed to merchants sticking to the plan, with an understanding that the data and the analytics and planning tools that were used to develop the plan were smarter and more agile than human experience alone. We believe this was a tipping point for many retailers, who may not have been fully invested in demand intelligence before.”

The predictions also touch on the importance and trends of mobile applications, and connecting customer behavior and purchase data for more insight.   However, to me, the second one sounds like lots of data, long implementations, ……

On that note, I would like to add that a key factor for applications to be successful in this economy is quick proof points and fast implementation. As competition heats up even more, retailers needs tools that can quickly demonstrate proof points and deliver value.  Solution providers and software vendors need the capability to quickly implement their solutions, without lengthy and costly  implementation cycles. This is even more important for the small and medium retailers.   I guess the bigger guys would say … why leave me out!  :))

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