Think about it: If inventory is constantly in motion, then shouldn’t the transportation strategy be linked to this more dynamic allocation strategy? In fact, agile retailers are beginning to think about their business in a highly integrated fashion, understanding the implications from a sales and cost perspective and how all the parts fit together. This, de facto, is what separates an agile retailer from others. Not only are they constantly analyzing what is selling, but how to sell it better to create a profit-making enterprise. (Silly me to mention profit, don’t you think?) One only has to look at the lackluster retail financial reports to realize even a few extra pennies per item count. Only the best retailers survive and thrive.
We recently wrote a white paper called The Agile Retailer. In it, we examined how allocation practices are changing, especially for fashion retailers. As retailers face stiffer competition they are discovering and implementing new methodsnot just faster fashion, but often introducing new brands and lines to capture distinct customer bases. Further, they are designing dynamic supply chain practices that hold lower inventories while serving those distinct new markets and customers. Specific to allocations, rather than having one big push out to the stores, the agile retailer has a data-driven approach to how, where, and when they stock, with dynamic movement of goods for rotating selections based on promotions or location-specific-demand, and fine tuning inventory stocking locations to support Omni-channel.