It's been close to 20 years since the retail planner came on the scene. Is it still the optimal way to organize a buying unit?
It’s been close to 20 years since the retail planner came on the scene. Is it still the optimal way to organize a buying unit?

 

We’re working with a client that has the opportunity to resource their buying and planning functions. It made me wonder what the most optimal team looks like. Back in the day when I was a buyer at JCPenney, the planner role had not been fully developed yet. I had help in the form of assistants, an admin, and shared allocator and catalog inventory analyst.

The catalog inventory analyst was the closest thing to a planner, but they didn’t work the retail assortment plan or come up with recommended quantities by item. My assistants and I did that. The role eventually went away but has probably made a comeback in the form of web planner since catalog and web are essentially the same thing- just different media. It’s one of the reasons I always thought JCPenney was perfectly positioned for omnichannel- they had the entire infrastructure to handle it. As true with so many things in life, timing matters.

Today most retailers join a buyer and planner at the hip- merging the creative and science together. Taking the number crunching duties away from the buyer and allowing them to focus more on assortment and merchandise trends should- in theory- have more closely aligned consumer’s wants and needs with the assortment, but has it? No doubt inventory productivity has improved- we have better tools to look at history and predict the future. Walmart figured that out in 2000- with an intense focus on studying every SKU-store combination. They resourced themselves to do it and recommended mandated their supplier base to help. That was one of the key reasons I started ERS, since suppliers did not have that core competency. It has served Walmart very well.

Meanwhile, the department stores started the margin game with their supplier base- if the product doesn’t perform- you’ll cut me a check at the end of the season. But once goods hit the floor suppliers had no control over pricing, presentation and other factors that affect performance. That game unfortunately still goes on and I believe has only weakened the retailers that do it. It’s so risky for suppliers that they only show a “safe” assortment. AKA, boring. That’s why the men’s department looks like a sea of polo shirts and khakis with different logos on them. The Specialty stores have not played that game (much) and have had much stronger performances.

Bed Bath & Beyond is unique in that it still allows each store to inventory themselves and adjust their assortments. It’s arguably worked well for them as their numbers have outpaced many retailers until recently. Their centralized buying organization does include a buyer and planner. But the unpredictability of 1000 individual managers placing orders makes it hard to optimize inventory for all items across the chain. For them, the question is more of getting more regional success vs. overall inventory turnover. It’s very expensive to markdown leftover valances and bed skirts whose ensembles already sailed out the door to a consumer’s home.

It’s been close to twenty years since the planning role has become prevalent and once again we are on the verge of another technological boom- this time in AI. Smart retailers and suppliers are already experimenting with these tools that can more quickly find opportunities and liabilities that would otherwise go unnoticed, like our RetailNarrative. The same way we are getting used to voice assistants and mobile devices that integrate different points of data to make suggestions (bring an umbrella today!), these tools will further enhance retailer’s ability to react quickly to buy more of what’s selling and mark down the dogs. Retailers are hiring Data Scientists, but many don’t even know what questions to ask of the data- which makes it a big waste. We’re smarter to train tech-savvy buyers and planners to use the tools because they’ve already learned the merchandise ropes (hopefully).

In making my recommendation to the client, I am thinking about the actions that need to be taken, and the support required to recommend those actions. To me, it is more about putting in place the disciplines- buying within boundaries, keeping stagnant inventory in check, having the right assortment, etc.- than the roles themselves.

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