Any post-crisis (or even mid-crisis) is the best time for new opportunities, offering a clean slate for growth and rebirth. For years, promotional ineptitude has been well documented – with Nielsen publishing that 2/3 of promotions fail. Confirmed by study after study that would show anywhere between 80-90% of them don’t unleash additional revenue or margin. Even with that knowledge, the allure of trade dollars, and the risk of dramatic change, compelled most to stay the course and continue to invest in bad promotions. That’s now changed.
Not an Ideal Predicament
Depleted revenue, compressed margins, a shortage of labor, plus an infrastructure not designed for an online volume consisting of 40-60% of total sales. Not ideal for fashion retailers. And beyond that, retailers experience up to 8 percentage points of margin loss on a digital order.1
The last 12 months of retail sales have been the most volatile of the modern era. Sales during the Great Recession look like a peaceful ocean-view compared to the spikes of COVID-19. It's no wonder that shortages remain while businesses struggle to anticipate consumer demand. Even today, 74% of companies report supply issues.
With online sales increasing, traditional allocation and forecasting methods are costing retailers millions. Inventory is not in the ideal location resulting in higher shipping costs, more markdowns, and fewer sales. Omnichannel allocation has already been shown to improve ship completes by 2x and inventory turns by greater than 250%. But how is omnichannel allocation different than traditional methods? We've highlighted 6 points of differentiation below: Customer Demand, Returns, Continuously Forecasting, Markdowns, Platform, and Experience.