How retail stores can plan their merchandise accurately during the Black Friday and Cyber Monday Sale
Merchandise planning is an intensive process that gets more complicated around the holiday and discount season. Black Friday discount, which started as a one-day event spread to Cyber Monday, its digital version. In 2020, U.S. shoppers spent a record $34.36 billion on retail websites over the five days from Thanksgiving to Cyber Monday, up from $28.49 billion last year.
A crucial change that was established over the years is that these discount days evolved from being one-day events to longer durations as their popularity increased. Retailers were finding it extremely difficult to manage the serpentine queues, hordes of people, chaos on the store floors, and high volume of sales on these two days. Now, discounts and deals are starting earlier than ever to meet the increase in demand while also easing the supply chain and shipping worries of the retailers. This change has enabled the retailers to sell more products in a shorter duration without experiencing pandemonium at the stores.
Merchandise Planning for Black Friday and Cyber Monday
To make the most of this sales event, retailers have to plan meticulously to ensure that the customer demands are met and their infrastructure doesn’t succumb to pressure. Efficient merchandise planning is done so customers can find what they want and purchase it without experiencing stockouts. Mismanagement can be catastrophic during the actual sales period especially because bargain hunters are quick to switch to competition and spread the negative word if they are dissatisfied with the experience.
Avoiding chaos during discount season
So how does a retailer avoid chaos on Black Friday and Cyber Monday? By planning each aspect to the finest detail, using smart merchandising and inventory management solutions such as Increff Merchandising Solution. It provides granular insights and in-depth store-style level analysis based on individual store performance and supports decision-making with concrete data.
For existing stores, the focus needs to be on planning the display and distribution of the products to utilize available store space effectively. This can be done using planograms, a visual merchandising tool that formulates the store layout to maximize visual appeal and facilitate maximum sales. Increff Smart Merchandising Solution provides in-depth details of the products that are in demand to make these planograms more effective in encouraging sales. When the knowledge of current demand patterns is combined with scientific methods used in the creation of planograms, the stores can make maximum use of their resources such as display areas and shelves.
As many stores have had to relocate due to the pandemic and many new stores have had the opportunity to launch during this time, planning the right merchandise for each store is of extreme importance to ensure success.
Here are some ways in which Increff Merchandising Solution can help during Black Friday sales.
Analyze existing sales for pre-season and in-season merchandise planning
Traditionally, discount days were designed to get rid of overstock inventory to avoid deadstock but the magnitude of Black Friday sales demands analysis and anticipation. Evaluating existing sales is step one for all retailers as it provides a proper indication of products that are in demand. A new-age merchandising solution can identify top sellers or core styles, and low performing styles through trend analysis. It provides a base and direction to the inventory planning process as it helps determine what goods to stock, in what quantity, and which styles to markdown. It also helps determine which styles are suited for which stores so retailers can re-distribute existing inventory to maximize sales.
Variable discounting as per store-level demand
As a retailer, this is an opportunity to earn higher profits and margins considering the volume of sales that takes place during this period. When customers are expecting heavily discounted products, it is unwise to use the same discounting strategy across all products as each has its own sales history based on customer preferences. Additionally, discounts often fluctuate depending on the demand at a particular location. A blanket discounting strategy could lead to losses. Merchandising planning software uses smart algorithms to determine appropriate discounts considering factors such as ageing of the style, past performance, True ROS, and cost margins. These analytics can help you avoid excess liquidation and losses.
Optimize inventory distribution
For a retailer to effectively plan for the sales season, it is important to consider complete inventory across stores and various channels of sale. To present the maximum amount of stock for sale, it is crucial to have a holistic strategy. An automated merchandising solution can generate a dynamic store-style ranking to optimize inventory distribution. Event-based allocation of inventory can help ensure the right styles and products are present as per demand trends. This analysis can enable inter-store transfers and stock cover can be optimized across all stores, reducing chances of stockouts.
Auto-replenishment and replacement
Discount days such as Black Friday are the days when stocks fly off the shelves. An immediate need is to reorder and restock in time to ensure that stockouts don’t affect profitability. As this is also the time when retailers are getting rid of deadstock, it is important to ensure that the right products and SKUs are reordered. A smart merchandise planning software can automate reordering while maintaining checks and balances to ensure lead time is considered for every style at the time of reordering. Based on the auto-replenishment feature, stores can continue functioning seamlessly even during the peak sales period.
Due to the pandemic, stores have to manage operations with less staff, and supply chains are stretched too thin trying to meet the unprecedented increase in demand. Irrespective of this, Black Friday and Cyber Monday are events that customers look forward to, which means they are offering an opportunity for retailers to maximize their earnings and profits in a short duration. Make the most of this receptive and favourable time by providing your customers with the best shopping experience.