Skip to content
Microsoft Industry Blogs

Since 2016, the media has talked up the impending Retail Apocalypse, claiming that high-profile retailer bankruptcies and store closings signal the demise of brick-and-mortar retail. But retailers in the know understand their conclusions bear little resemblance to the true state of the industry. Despite mass store closings, 2017 saw a net increase of approximately 4,000 stores.1 This is no time for complacency, however, because leaders in retail are fundamentally changing the way they think about their stores and businesses. Successful retailers will adhere to certain strategic motions that address retailers’ past performance and overcome perceptions around the Retail Apocalypse, to stay successful and relevant in 2018.

Demand Planning Tips, One: Refine your digital strategies

The effect of the Retail Apocalypse was touched on above, with leaders in the industry embracing fundamental shifts in how they think about retail. To compete and win during 2018, brick-and-mortar retail must embrace external factors such as digital, which is driving a notable percentage of sales. According to Senior Economist Andrew Duguay, online sales have grown rapidly, by about 12 percent year over year.2 This growth is from a variety of factors, but it is certain that data-driven insights have given retail executives visibility into industry shifts such as these.

In embracing digital strategies brick-and-mortar stores should avoid common misconceptions around digital business decisions. For example, it is commonly misunderstood that to compete online retailers should pull the pricing lever to match or beat lowest prices found online. Data-driven insights, however, reveal that such a strategy would be inadvisable. Brick-and-mortar stores should instead focus on more nuanced strategic insights, such as incorporating micro-holidays (think Mother’s or Father’s Day) in marketing instead of going big at the end of the year in November and December. There is less competition during these times, yielding an increase in sales for retailers who adopt this strategy. By putting an increased emphasis on digital strategies, and avoiding common misconceptions, retailers will be successful in 2018.

Demand Planning Tips, Two: Understand the external indicators that affect your business

Many retailers, especially those with brick-and-mortar retail locations, tend to rely on historical performance data when forming their business strategies and forecasts. While that is a good place to start, there are a variety of factors outside of a retailer’s control that affect their customers’ ability and willingness to buy. And while these external factors may be outside a retailer’s control, retailers can still take them into account in demand planning, and adjust their strategies accordingly.

One challenge in identifying these external factors, such as macroeconomic trends, is that looking at individual components in a vacuum can cause confusion. For example, inflation and employment are typically good indicators of the spending power of U.S. consumers, and ultimately, of the performance of the retail sector. Lately, however, unemployment rates have been consistently under the 5 percent mark, meaning that more jobs are available to Americans. Yet inflation is also rising—and at a faster rate than non-management wage earnings—thus creating a gap that has the potential to hurt spending power.3 By combining macroeconomic trend data with geographic, demographic, and company-specific data inputs, retailers can create a highly accurate company sales-channel forecast model, and use the insights they produce to refine their strategies around demand planning.

Leverage Prevedere Demand Planning for a successful 2018

Prevedere, an industry insights and analytics company, has partnered with Microsoft to provide actionable data driven insights at the speed of business. ERIN, their patented analytics engine (using Microsoft technology) enables industry leaders to monitor global economic and industry activity to forecast future demand spikes and declines 12 to 24 months ahead of the competition. The Prevedere Demand Planning for Consumer Goods and Retail solution is just one example of how Microsoft and its partners are providing a suite of solutions for retailers to better enable their digital transformation. Learn more about Prevedere Demand Planning on AppSource and start a free trial today.


2 Prevedere

3 Prevedere