Dealing with Demand Volatility in Retail: YRC Insights

Demand volatility and forecast errors make inventory tough. YRC shares expert tips to tackle demand uncertainty in retail.

Volatility in demand and errors and lack of accuracy in demand forecasting make inventory and supply chain management one of the most difficult operational challenges in the retail business. In this communiqué, the team of retail business strategy experts ( https://www.yourretailcoach.in/retail-business-plan/ ) of retail and eCommerce consulting firm - YourRetailCoach (YRC) highlights some tips and tactics for addressing demand uncertainty in retail.

Irregularities in Consumer Behaviour

Today, it has become more challenging than ever to predict with a high confidence value as to what customers will prefer to buy next time. Say, if product X sold better over product Y in one month, there is no assurance of a repeat trend. There may be evergreen products that never go out of demand easily but that list is shrinking fast. Different customer segments are driven by different forces. The younger segment tends to shift brands more frequently while households prefer sticking to their routine.

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Shorter Product Life Cycles

Need for frequent change, expectations of novelty, discounts and cash backs, a rapid inflow of products and brands in markets, extensive options provided by eCommerce, the influence of social media and the rise of infotainment content, and a host of other factors have made it difficult for products stay on the shelves of stores for too long. It is very difficult for retail brands and businesses to incorporate all these factors in their merchandising decisions in one go. This is evident in grocery and departmental stores and supermarkets that prefer to play within the safety nets when it comes to merchandising strategies and decisions.

Promising New Brands But with Unproven Distribution Networks

Sometimes it is difficult even for experienced retail strategy consulting firms to advise on how to deal with new brands with promising products but poor distribution networks and experience in supply chains. It is not advisable for retailers to rely on such new and promising brands without reading the reliability of their supply chains and logistical systems.

The Use of AI Demand Forecasting in Retail

Broad AI is something that has already arrived and is changing things big time in the world of business. As a part of retail demand planning software applications, AI-powered tools can process oceans of data from diversified sources like POS systems, web and eCommerce analytics, social media channels, and even external ones like weather and economic data to project demand and market trends with more accuracy than any conventional tool is capable of. The best part of using AI-powered tools is that AI models can learn to improve their performance, unlike traditional software applications that rely on a given set of codes.

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Real-Time Data Integration

With more than ten years of experience in strategic retail consulting ( https://www.yourretailcoach.in/retail-business-consulting/ ), YRC maintains that today we have reached an age where business data cannot remain confined to respective functions. For retail brands and businesses, it has become necessary to integrate data from their store POS systems, eCommerce systems, inventory management, and supply chains for getting real-time insights on inventory movement (sales, procurement, and logistics). These insights allow them to read actual demand and make changes with more agility. In an omnichannel retail strategy ( https://www.yourretailcoach.in/digital-retail/omnichannel/ ), this integration is quintessential.

Collaborative Planning, Forecasting, and Replenishment (CPFR)

CPFR is a relatively new but very effective approach where retailers work in close tandem with suppliers and distributors for improved forecasting accuracy and synchronicity in operations via data sharing.

Dynamic Buffer - Optimizing Retail Inventory Levels

Dynamic buffer is a contemporary, data-driven approach to inventory management in which buffer stock levels are maintained based on real-time data, predictive analytics, demand variability, lead times, and risk profiles instead of relying on fixed and pre-set benchmarks.

Rupal Nikhil Agarwal
YourRetailCoach
+91 98604 26700
consult@mindamend.net

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This release was published on openPR.