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Three Tips for the World of 50:50 and Managing Black Friday

Nov 25, 2015 2 min

A recent white paper by Andrea Weiss, founder of The O Alliance and considered one of the best store executives in specialty retail, ‘How to Survive in a World of 50:50’, raises some interesting questions about how retail will manage, adapt and survive in a world where 50% or more of transactions will take place online. In short, in order to succeed in an omni-channel 50:50 world, retail organisations need to change fundamentally.

We listed three key actions that all retailers should take in order to accelerate this change.

1) Break the Silos

A pivotal part of the new, omni-complient retail organisation is the supply chain. To be prepared for the world of 50:50, traditional silos should be broken down. There will be no room for ‘online’ or ‘bricks’ or any other segment to get territorial, because all areas of the business will need to focus on their ultimate, shared concern: the customer.

2) Take Your Supply Chain into Account

Differentiation through quality of service will become more important than ever. As a customer choice increases, so do their expectations. The supply chain is pivotal in this emerging environment, as it’s at the core of delivering on those increased expectations.

As an example, imagine the marketing department deciding to extend delivery options to include click & collect. This may not seem like a big deal and a lot of retailers are in fact doing just that. However, the ramifications for the supply chain can be very significant in terms of additional cost, capacity and even logistics. So make sure your supply chain is ready before executing such changes.

3) Plan Ahead and Simulate Scenarios

Retail benefits from constant innovation and development. To stay relevant, it helps to have an advanced supply chain optimisation and planning solution. Planning activities and simulating scenarios enable you to understand the impact, cost and execution of any particular activity or promotion. Planning ahead generally results in the delivery of a smoother and better customer experience.

Black Friday – Putting These Tips into Practice

Black Friday – now an intrinsic part of the retail landscape – is another good example of fulfilling customer needs while maintaining the integrity of your supply chain. What will customers be looking for this Friday? Amazing bargains. A same day or next day delivery is probably not critical to their purchase decision. So do you actually need to offer the same delivery options as for standard priced products?

A retailer’s entire supply chain needs to be able to plan and execute to the highest of standards. Those standards can be difficult to maintain amidst Black Friday’s exceptional volume increases. Not only can solutions like RELEX be used to forecast sales on events such as Black Friday, it can also be used to plan supply chain execution, run scenarios exploring the range of possible outcomes, and build alternative plans to cope with exceptions. These tools help retailers gain a critical competitive edge as we approach the world of 50:50.

If you want to read more about how to truly be prepared for events like Black Friday, read our whitepapers: ‘Better Promotion Management in 4 Steps‘ and ‘Planning and Managing the Critical Aspects of a Full Merchandising Season‘.

Written by

Andrew Blatherwick

Chairman Emeritus and Advisor