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.”
During the last 12 months, fashion retailers heavily invested in tightening assortments and improving their inventory efficiency. While these investments are needed, all the benefits come undone if a customer cannot find their size. Worse, tightening assortments exacerbates the size stock-out problem, damages customer satisfaction, and creates significant financial pain unless size allocation is accurate. A 20% size misallocation drops margin dollars by 50% if markdown pricing is uniform across all sizes.
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.