4 Critical Components to Open-to-Buy Planning
Retail operations live and breathe by their planning methods. You need to be able to make accurate forecasts and plan for all seasons based on sales, inventory, and proper budgeting for your retail sector. There are a lot of factors that can influence these dynamics, and not all of them are in your control. For instance,
- You can’t control the economy
- Geographical demographics could be different from store to store within the same chain
- Manufacturing trends are generally out of your control as a retailer
- Whether or not customers are interested in your merchandise from one season to the next
Every retailer must face the same planning decisions based on factors that are based both within and outside of your control. But these four factors are critical to the success of every retail operation.
4 Factors That Will Impact Your Open-to-Buy Planning
While there are a lot of factors that impact your retail operation’s open-to-buy planning practices, these four are absolutely critical:
- Accurate stock level forecasting – If you can’t predict how much stock you’re going to have on each item in your store, you could be in trouble. How you forecast stock levels make a big difference. With the right solution, you can make accurate predictions based on stock-to-sales ratios that lead to operational profitability.
- Allocation – Simply buying the right products in the right amounts is not enough. You’ve got to allocate that merchandise to right stores. Some products sell better in certain geographic areas. Some merchandise sells better at different times of year. Knowing how to allocate your merchandise is a huge part of planning your retail operations.
- Planning for multiple seasons simultaneously – Every season has its trends. You’ve got to be able to plan for each season months in advance. By the time the Christmas season is over, it’s time to prepare for Easter. If you haven’t thought about Easter before Christmas begins, it’s too late.
- Point-of-sale integration – The best way maintain a handle on open-to-buy planning is to keep your inventories connected to your point-of-sale terminals.
Open-to-buy planning is an ongoing activity for retail operations. Do it right with the right software components.