Today marks 17 years since I founded Enhanced Retail Solutions (ERS). I would like to thank all our employees, partners and clients around the globe that have enabled our success. Our number one asset is our people- we are blessed with an incredible and talented team. While I’m usually a forward-looking person, it’s times like this that I stop and reflect on the journey. In 2002 there was no Google. When I needed to learn how to code, I hit all the book stores and libraries to get the info I needed. Excel was really the only BI tool and the first ERS computer was super-fast with a 386 processor and 32 MB of ram. It took an hour to process SKU-store data from a 600-store chain. Fast forward to now: We have multiple development teams around the world and our servers do the same job in just a few seconds.
Look at the changes in the retail landscape. The emergence of ecommerce, changing consumer expectations, shopping options and delivery methods. Yet you know what has not changed? The fundamentals of staying in business. Yes, it is harder and more complex, but more data is available and better tools to make use of that data are a commodity now. Data Scientist is now another hat that buyers, planners, distributors and brand managers must wear.
The buyer-supplier relationship has evolved as well. Expectations to improve inventory productivity while increasing sales and profit are far higher, especially for traditional brick & mortar stores (what’s left of them). Amazon and Walmart have created a high stakes business model with the intention to serve the consumer as quickly, easily and cost-effectively as possible. That raises the stakes for everyone else. A retailer must either be everything to everyone or find a very specific niche. It’s bred a lot of innovation in some very old categories- look what Dollar Shave Club and Harry’s have done to shaving.
Meanwhile, many suppliers are feeling the squeeze- especially those without a strong brand of their own. There are high penalties for not performing at retail- and I’m not just talking about chargebacks. Manufacturers are expected to provide financial support to help a retailer markdown product that didn’t sell, regardless of the reason. Additionally, more retailers are bypassing manufacturers all together, designing their own products and working directly with factories.
Conversely, there are retailers embracing tighter collaboration with their suppliers- relying more on VMI (vendor managed inventory) which has proven to reduce risk, increase sales and improve inventory productivity. Some very savvy manufacturers have created their own brands and invested heavily to promote them and create loyal followers (thanks to celebrities and social media). Many are becoming retailers themselves- like shoemaker Skechers. It blurs the line between retailer, manufacturer, and licensor. This intense level of competition for the consumer’s dollar creates an even greater reason to watch the numbers carefully- especially those that can indicate inventory buildup. Whoever can do that the most efficiently will win in the long run.
Retail analytics is now a requirement for everyone involved. Whether you work at a department store, digitally native distributor, or anywhere in between you need to track product performance, forecast, allocate inventory, assort a line and more. You need a disciplined planning process and a multitude of data points to do that and make the best decisions possible. Since the bulk of capital investment is inventory, we’ll spend a lot of time talking about it.
Our goal 17 years ago remains the same today- help manufacturers and retailers determine the optimal assortment and inventory flow over time. We get better at it every year as we blend new technologies with our expertise to deliver best in class solutions. I can only imagine what the next 17 years will bring.
And speaking of our expertise: In honor of our 17th anniversary, enjoy a FREE copy of our Retail Primer through the end of July. Use Promo Code 17TH _ANN at checkout. https://www.enhancedretailsolutions.com/product/enhanced-retail-solutions-retail-primer/