To thrive in retailing, you must read minds and predict the future. Retailers must decide today what their customers will want tomorrow. And in a volatile economy, a retailer may literally be forced “to bet the store” on its inventory and supply chain decisions.
“Few realize that there is more science than art in creating effective retailing. Fisher and Raman prove it!”
—Tom Stemberg, founder and former CEO, Staples
In the past, mom-and-pop retailers had the benefit of daily face-to-face interactions where they could learn all about their customers’ likes and dislikes. They, thus, could match their supply of goods to a strong “gut” sense of consumer demand. Today, many major retailers still operate in that traditional mold. They use a hunch-driven gut sense to make their important decisions—but their buyers and planners are now removed from the customer. And so their forecasts have become statistically poor guesses that come loaded with intolerably high error rates and severe financial dangers.
Fortunately, today, there is a better way to walk the supply-and-demand tightrope. Thanks to leaps of computational power, every retailer is now sitting on a treasure trove of customer transaction data that can reveal the hidden patterns of consumer behavior.
In a groundbreaking book, THE NEW SCIENCE OF RETAILING: How Analytics Are Transforming the Supply Chain and Improving Performance, authors Marshall Fisher and Ananth Raman, argue that the time is ripe for “rocket science retailing.” Just as Wall Street was transformed in the 1970’s by the influx of physicists, engineers, and “rocket scientists” with mathematical techniques that allowed the harnessing of vast, complicated transaction data, so too retailing is now ready, and in fact beginning a “rocket science revolution.”
The authors draw on examples from a diverse group of international companies to show how smart retailers are using analytics to transform their supply chain. How they are bringing costs down while driving revenues higher—in effect turning their supply chain into a brand enhancer, a speed enabler, and a true competitive advantage.
In a thorough step-by-step manner the book outlines how you can develop your own rocket science practices in key areas, and how you can:
- Greatly improve your forecast accuracy
- Better decide how much inventory of each product to carry in each of your stores
- Develop tools for assortment planning that can help you determine which products to carry, and how best to price them
- Mine your existing data for hidden “home run” products, and use early sales data to predict demand for the life cycle of a product.
- Craft a more profitable way to deal with markdowns.
- Create a flexible supply chain that can respond quickly to demand signals
- Develop new practices to better handle a range of retail management challenges including: How to drive incentives, improve store-level execution, evaluate the merits of new information technology, structure organization and implementation plans, and much more.
The New Science of Retailing will show you how to create a high-tech forecasting system supported by a modern, flexible supply chain, and how you can successfully mix your company’s traditional retailing art with the best practices of the new, analytical, “rocket science” revolution to gain greater profitability and operational excellence.