The old paradigm of trade promotion investments has failed. Companies that continue to reinforce the process will realize short-lived, incremental improvements. CPG companies will never achieve the transformational results necessary for being nimble and growing in the new environment without a broader, strategic consumer-focused strategy.
After last year's record holiday sales growth (Yes, record – except for fashion retailers), this holiday is heating up to be another great year, with US sales expected to grow by 7.4%. Even clothing and other discretionary spending are expected to rise. But if the correct amount of inventory is not placed in the right locations, all that opportunity is lost.
Retailers in the back-to-school space experienced a once-a-century year in 2020, and as the season comes to a climax, companies selling school-related products, like apparel and electronics, are using the learnings from the last year to better forecast the actual demand, determine assortment and optimize inventory levels. They are taking sales and other financial statistics from only the most immediate past periods and applying AI and machine learning to optimize their assortments and sharpen their pricing strategies.
To all Chief Supply Chain Officers - it’s time to take control of the data that drives your business and adopt a new, more trusting, mindset. Too often I hear the cop outs… “those are projections from sales and finance — their data cannot be trusted, we hope to have clean data soon, then we can move forward” to “I don’t have time for another S&OP meeting about whose forecast data is best” to “are we really going to fund another data project that will take longer, cost more, and have minimal impact.”