5 Ways Merchandise Planning Software Can Propel Your Retail Business (And 3 Ways It Can Tank It)

Merchandise planning is a critical process for retail businesses. It involves forecasting demand, planning inventory levels, and setting prices to maximize profit margins. However, merchandise planning can be a complex and time-consuming task, especially for businesses that have large product portfolios and multiple online and offline sales channels. This is where merchandise planning software comes in handy.

The dominant narrative about merchandise planning software is that it is a must-have tool for retailers and e-commerce. It is believed that merchandise planning software can help businesses streamline their planning processes, reduce errors, and improve decision-making. While there is plenty of truth to this narrative, it is not the whole story.

Let’s explore the pros and cons of merchandise planning software. We will discuss the benefits and limitations of using merchandise planning software and provide some tips for businesses that are considering purchasing and implementing it.

5 Benefits of Merchandise Planning Software

Merchandise planning software can drive huge benefits for your retail and e-commerce business. But it’s important to understand where it can help and where it can’t. Here are 5 benefits that merchandise planning software brings to the table:

1. Streamlined Planning Processes

Merchandise planning software can help businesses streamline their planning processes by automating repetitive tasks and providing real-time data. This can reduce the time and effort required to complete tasks such as demand forecasting, inventory planning, and price optimization. As a result, businesses can save time and resources and focus on more strategic tasks.

2. Improved Decision-Making

Any type of business planning software provides businesses with real-time data and analytics that can help them make better decisions. With access to accurate and up-to-date information, businesses can make informed decisions about inventory levels, pricing, and promotions. This can help businesses optimize their profits and avoid costly mistakes.

3. Better Collaboration

Merchandise planning software can help improve collaboration between different teams within a business, such as merchandising, finance, and sales. By providing a centralized platform for communication and data sharing, the software can help teams work together more efficiently and effectively. This can help businesses improve their overall performance and profitability.

3 Reasons to Not Buy Merchandise Planning Software

However, software tools are just that – they are tools. And tools can prove to be detrimental if they are overly expensive and your team becomes over-reliant on them at the expense of making judicious business decisions. Here are a few things to think about so you can avoid the pitfalls of just blindly investing in technology.

1. High Cost

Merchandise planning software can be expensive, especially for small businesses. The cost of purchasing and implementing merchandise planning software can be a significant investment, and businesses may not see a return on their investment for some time. This can be a barrier for businesses that are operating on tight budgets.

2. Complexity

Any software can be complex and difficult to use, especially for businesses that do not have a dedicated team of IT professionals. It can take time to learn how to use the software and integrate it with other business systems. This can lead to delays and errors, which can be costly. Evaluating a Cloud based software tool which is available in a Software as a Subscription (SaaS) model with easy integration to your e-commerce, POS, ERP and Social Media may be worth a closer look.

3. Over-reliance on Technology

Merchandise planning software can lead to an over-reliance on technology, which can be a risk for businesses. If the software fails or there is a technical issue, it can disrupt the entire planning process and lead to delays and errors. This can have a negative impact on business performance and profitability. It’s vitally important to have the human element and most importantly, human judgement in any automated or AI-powered process. Ya’ll remember what happened at the beginning of the Terminator movie, right? (just kidding…we think…)

5 Tips for Businesses Considering Merchandise Planning Software

So let’s say your company has weighed the pros and cons and has decided you’re ready to go out and purchase and implement a merchandise planning software solution. Well, what should you consider in your evaluation? Here are 5 things to consider as you look at different solutions in the market.

1. Do Your Research

Before investing in merchandise planning software, it is important to do your research and evaluate different options. Look for software that is tailored to your business needs and budget, and read reviews from other businesses that have used the software. This can help you make an informed decision and avoid costly mistakes.

2. Train Your Team

It is important to train your team on how to use merchandise planning software effectively. Provide your team with the resources and support they need to learn how to use the software and integrate it with other business systems. This can help prevent delays and errors and ensure that your team can use the software to its full potential.

3. Use the Software as a Tool, Not a Solution

The software is a tool that can help businesses improve their planning processes and decision-making. However, it is important to remember that the software is not a solution to all of your planning and decision-making needs. Use the software as a complement to your team’s expertise and knowledge, and make sure to review and validate the data provided by the software.

4. Prioritize Data Quality

Retail planning software relies heavily on accurate and reliable data. To get the most out of the software, it is important to prioritize data quality and ensure that your data is clean, completes, and up-to-date. This can help you avoid errors and make more informed decisions.

5. Monitor Performance

Once you have implemented merchandise planning software, it is important to monitor its performance regularly. Keep track of key metrics such as accuracy, speed, and cost-effectiveness, and make adjustments as needed. This can help you optimize your use of the software and maximize its benefits.

TL;DR –Merchandise planning software can be a powerful tool for retailers, but it is not a one-size-fits-all solution. It is important for businesses to carefully evaluate the pros and cons of using merchandise planning software and make an informed decision based on their specific needs and budget. By doing so, businesses can improve their planning processes, make more informed decisions, and ultimately maximize their profitability.