With retail and service markets experiencing remarkable growth, multi-channel businesses emerge as an inevitable trend. No longer restricted to brick-and-mortar storefronts, these enterprises expand their reach across diverse sales channels, from e-commerce websites and mobile apps to social media platforms. However, planning demands for multi-channel models pose more complex challenges that need to be navigated.
The current multi-channel retail landscape
The multi-channel retail sector witnesses a significant surge in new businesses, leading to fierce competition. According to eMarketer, global online retail sales are projected to reach 5.7 trillion USD in 2023, a 12.9% increase from 2022. Consequently, businesses must intensify competition on all fronts, demanding a sharp and efficient demand strategy.
The retail industry is evolving beyond traditional websites and venturing into new avenues such as marketplaces, social media, comparison shopping engines, and other platforms. Businesses are capitalizing on multi-channel retailing as multi-channel shoppers tend to spend up to three times more than single-channel shoppers.
To adapt to consumer expectations, more trends in 2024 have emerged that require businesses to keep up with, such as AI. Even though AI adoption is still in its early stages, 87% of retailers have already deployed the technology in at least one area of their business. As AI’s presence grows, retailers can embrace it by integrating with chatbots to support customer inquiries, enhancing the customer experience quickly. Specifically, by 2027, chatbots will become the primary customer service channel for roughly a quarter of organizations, according to Gartner.
Current challenges of multi-channel retail
Despite the market growth, multi-channel businesses need to navigate 3 main challenges, including:
Demand forecasting
Accurately predicting demand across multiple sales channels can be complex due to fluctuations in customer preferences, seasonal variations, and the impact of external factors such as economic conditions and marketing campaigns. This challenge requires the capability to gain, extract and analyze vast amount of historical data. Inaccurate demand forecasting can negatively impact inventory management, leading to overstocking, excess holding costs, or understocking, resulting in lost sales and dissatisfied customers.
Capturing and understanding customers’ behaviors
Capturing and analyzing cross-channel data becomes crucial for understanding customer behavior. While 95% of marketers recognize the importance of multi-channel marketing, only 73% report having a concrete strategy in place. This gap highlights the need for businesses to bridge the disconnect between recognizing the value of multi-channel marketing and implementing effective strategies to leverage it.
Difficulty coordinating inventory across sales channels
In a traditional single-channel model, inventory levels directly reflect product availability. However, multi-channel environments involve independent sales channels that requires individual inventory updates. Additionally, limited resources can make planning and choosing the right retail channels problematic for small and medium-sized companies. Thus, investing in the right tools is highly critical. For this reason, around 53% of retailers are investing in the tools that will allow them to sell anywhere in response to consumer behavior and online demand.
Demand planning with FPT Software’s Streamline
Therefore, businesses require a comprehensive and efficient solution to address the challenges of multi-channel retail. Streamline is designed to tackle these challenges, offering a comprehensive demand planning solution for a variety of distribution channels. FPT Software’s Streamline helps businesses enhance efficiency in sales forecasting, achieve more accurate predictions, and efficiently manage inventory.
Streamline brings numerous benefits and tackles demand prediction challenges in multi-market businesses, including:
- Provide a unified planning platform for data visibility.
- Automate data collection and analysis to save time and effort instead of using Excel files to predict and manage customer demands.
- Automate calculations (such as regular baseline, total baseline, baseline after adjustment, or uplift volumes) instead of manual calculations with Excel sheets.
- Accurate demand prediction with advanced machine learning to accurately forecast demand for each product, distribution channel, and region, optimizing warehouse and production operations.
- Flexible planning with multiple "what-if" simulations based on marketing strategies, promotional programs, and market fluctuations helps businesses make informed and effective decisions.
- Enhanced collaboration by connecting different departments and sharing real-time information.
- Provide predefined promotion mechanisms that cover almost all types of promotions so planners can easily plan sales promotion strategies.
Elevate your business operations with Streamline.
Effective demand planning is the key to thriving multi-channel businesses in the booming market. Streamline, an advanced Demand Planning solution, provides businesses with the right platform to optimize business efficiency and gain a competitive edge.
To maximize business efficiency with multi-channel retail, don’t hesitate to contact us.
