RFID to the rescue

One of the main issues when implementing Merchandise Planning is the quality of data. There are a variety of reasons for this, but one of the main ones is the infrequency and inaccuracy of stock counting.

RFID is set to change all this. WIth RFID the retailer will know where each SKU is at all times, thus dramatically improving the quality of data available as a historic basis for planning, and on an actual basis for reforecasting.

Of course there will still be room for processing errors, but expect the quality of base data to improve dramatically. Now retailers just have to decide what to do with the data!

JDA coming into play?

"Whichever way Retek goes, analysts expect more acquisitions from the leading suppliers. In Larry Ellison's words, the retail sector "is underpenetrated and not dominated by any one company".

The battle for Retek may already have put its smaller rival JDA Software into play. "

Now that would be interesting. Any bets?

So Oracle have won the battle for Retek.

It seems like the more logical merger of the two but the line56.com commentary quotes AMR as saying

"Oracle needs at least a fourfold increase in retail-centric revenue ($700M to $800M per year), with at least double the profit percentage that Retek has seen in recent years, to have the deal make any financial sense...".
And then we have the SAP sour grapes ;-)

"SAP offered its viewpoint in a press release, saying that, as a "disciplined investor," it didn't want to pay an inflated Retek price that "in the long run, [would] not deliver the returns we demand."

It'll be interesting to see what develops!

"As If" analysis Part 2

"Fashion sector bellwether Next unveils full-year figures next week, and much of the focus is likely to be on recent trading performance.
Bad weather has hit clothing groups..."

It's amazing that the planning done in these businesses is so finely tuned that something as utterly unexpected as a smattering of snow in March can upset the applecart isn't it ;-)
You might expect that a bit of cold weather in March would help clear the remaining Winter merchandise...

...and of course, if we don't venture out to buy Summer merchandise in March due to a bit of bad weather, most of us decide not to bother with the new season at all don't we ;-)

Is the logical deduction from all this that UK Retail forecasting is hopelessly optimistic and totally fails to take into account banal and predictable events like a spot of bad weather?

Or is it that unrealistic pressure from the city forces retailers into making these unrealistic and undeliverable forecasts in the first place?

Two bald men?

"Retek Inc., a struggling producer of retail applications software, seems an unlikely target of a bidding war between SAP America and Oracle...."

I can't help thinking of the quotation about "two bald men fighting over a comb".

Funny, I tried to find the quote - I thought it was Churchill but it seems to be more modern.

The best provenance I can find is that it was the Argentine writer Jorge Luis Borges referring to Britain and Argentina fighting for the Falklands / Malvinas.

Anyway, it seems fairly apt ;-)

Retek Saga Rumbles On!

"Oracle upped its takeover bid for Retek to $11.25 late Thursday, a move that comes less than 24 hours after competitor SAP raised its offer price for the retail software applications company. "
There is an interesting article about the motivations of the companies involved here

Advertising a Merchandise Planning Course

So Google doesn't like my advert!

AD TEXT:
e-Learning CourseAn Intro to Merchandise Planning"a terrific resource", "invaluable"www.planfact.co.uk

Action taken: Suspended - Pending RevisionIssue(s): Punctuation~~~~~~~~~

SUGGESTIONS:-> Ad Text: Please remove the excessive or unnecessary punctuation fromthe following phrase(s): ""a terrific resource", "invaluable""

It's hard enough fitting your ad into 11 words without some illiterate criticising your perfectly valid punctuation! I wouldn't mind if they had criticised the irregular capitalisation of e-Learning, or the lack of an abbreviating stop after "Intro" ;-)

I suppose I can try changing the double quotes to single ones and see if they notice.....

"As If" analysis

Yesterday I read on the comp.databases.olap newsgroup

"We've had a new requirement from our users where they would like toperform 'as-if' analysis on the data."

and in today's Independent

"To listen to what retailers are saying, it's amazing there haven't been more profit warnings."
Perhaps the two phenomena will combine.

We will see a rash of profits warnings and as usual these will be blamed on external events like:
The bad weather
The royal wedding (II)
The state of the housing market
....
We can all analyse the reasons given and say "as if!"

Can people have too much choice?

All range planners should read this article !!!

Barry Schwartz - The Paradox of Choice - http://www.changethis.com/13.ParadoxOfChoice

Here's an excerpt:

"When people have no choice, life is almost unbearable. As the number of available choices increases, as it has in our consumer culture, the autonomy, control, and liberation this variety brings is powerful and positive. But as the number of choices keeps growing, negative aspects of having a multitude of options begin to appear. As the number of choices grows further, the negatives escalate until we become overloaded. At this point, choice no longer liberates, but debilitates. It might even be said to tyrannize."

How many of your options are duplicating something else in the range, or confusing your customers?

Cockney Chef in Assortment Planning Row

"Jamie Oliver was so appalled by the state of school lunches that he decided to sort them out. But, he tells John Crace, it's not easy providing pukka tucker for 37p a head "

The Guardian

What has that got to do with merchandise planning then?

Well - it's interesting to see consumer selection in action isn't it. In this case it's small kids choosing rubbish to eat rather than green veggies. (and their parents feeding them MacDonalds through the bars in the school gates so they don't have to !!!)

I used to think Jamie was a real merchant banker until I discovered "Jamie's School Dinners" (and the Smirnoff helped too).

Now though, like every other middle class parent, I feel that he has become the saviour of my kids' health, and he is fast becoming a national treasure (Bless 'im). Bring on Sir Jamie!
But like most merchandisers selecting according to his own tastes and not being led by the market he is having a torrid time.

In this case I think (no, I know) that he is dead right. This "market" has to be wrong as nobody in their right mind would say that reconstituted rubbish with added chips is what our kids need for school lunch instead of a balanced meal, but it is what the market (The kids) want.
The dynamic is interesting though isn't it!

This programe shows us something that all range planners should take to heart. If you apply your own taste to the product you sell, rather than what your public want, then you are on a hiding to nothing unless your range is "enforced" by a very scary dinner lady!

Most of us don't have that kind of back up do we?

Giants battle for minnow

"Oracle, SAP ... Retek? Giants battle for minnow

Oracle has responded to SAP's $US8.50 per share bid for retail software company Retek by jumping in with a $US9.00 per share cash counter offer."
The National Business Review

And the winner will be.....

We have no idea but the Googlefight looks like this ;-)

http://www.googlefight.com/index.php?lang=en_GB&word1=oracle&word2=sap

It doesn't matter how well you plan if....

... the execution fails!

I wonder how quickly ASOS's merchandise plan reforecast alerted them to this problem..
(and I wonder what planning system they are using !!!)

Online fashion retailer Asos says discounts used to clear winter stock after warehousing problems will dilute full-year profits.

"Operating out of four warehouses has led to a delay in stock appearing on the website. As a result, we have had to heavily discount winter stock across January and February, which should have been selling at full price pre-Christmas."

The discounting has led to a significant increase in sales, and "as a consequence, we are bearing the costs associated with very high sales volumes but without the gross margin to support them." ASOS Chief Exec - Nick Robertson

Starting a blog

How do you start a blog? Like this I suppose ;-)

I am going to ramble about the world of merchandise planning . I may also pass the odd acerbic comment on the related area of financial budgeting.
Stay awake at the back please!
So what happened today then?
Well we got some more consolidation in the industry. SAP just bought Retek for $494 million or $8.55 a share. According to Yahoo finance Retek's share price closed at $6.00 last Friday.
It is interesting to see the way in which the big companies just seem be eating up the smaller ones (Retek small?). Soon we will have one mammoth software company serving one huge retailer - Walmart or Tesco ;-)
And who is next on the takeover list?
Having seen Retek's stock price rise from 6.00 to 8.50 overnight I wouldn't mind knowing who is next in line!