The ups and downs of the pandemic exposed a key flaw in retail: the industry’s overreliance on long planning cycles.
When the pandemic hit, no one was buying anything. Widespread lockdowns forced store closures, and uncertainly over the economy led consumers to tighten their pocketbooks.
As consumers settled in for the long haul, they began shopping again. Stuck at home, they suddenly had money to spend on things—and spend it they did. Digital sales exploded, particularly in categories like apparel, department stores, and beauty products.
Many retailers found themselves caught on the back foot, scrambling to implement omnichannel strategies like curbside pickup and trying to respond to widespread supply chain disruptions and shortages. They ramped up production, only to find themselves with too much inventory as inflation surged and consumers once again cut back on spending.
It had become crystal clear—across industry segments, regardless of the size and maturity of the organization, retailers simply didn’t have the fundamentals in place to react as quickly as the market demanded.
As a result, a growing number of companies are now looking to reinvent how they track and manage inventory. With decent growth predicted for U.S. retail sales in 2024, they’ve increased their investment in technology, including AI-driven automation for demand forecasting and inventory planning, articulate demand prediction, and customer sentiment analysis.
But AI, hampered by data siloes and the need for models trained on that data, continues to fall short when it comes to decision-making. Increasingly, future-looking industry leaders are looking to reinvent how they track and manage inventory management in a fairly non-technological way: by creating a "war room."
Head over to Chain Store Age to learn more about the role of a war room in reinventing inventory management.
