Ninja Retail: Winning Companies Think Faster

Our Ninja Retail blog series focuses on the ways in which retailers can reduce inventory and working capital requirements. Read the introduction here. This blog post discusses the speed of thought of your organization as a whole.

Humans think fast, companies think slow and computers think the fastest.

Humans have imagination, companies have bureaucracies that attenuate imagination, but they also have structure. Computers utterly lack imagination but make up for it by performing more calculations in seconds than humans can in years. How you leverage each of these resources decides how fast your company thinks. That in turn drives the speed of enterprise response to sales and customer behavior trends.

Danny is a buyer at Erratic Retail. He is an absolute champ at picking products that fly off the shelves. He works closely with Sandra, a merchandiser, who is a wizard with numbers. Customers tell Danny and Sandra what they want by buying some of the thousands of SKUs Erratic Retail puts on sale at hundreds of stores and websites and ignoring others. Customers also respond to some marketing campaigns and ignore others. Now Danny and Sandra make mistakes sometimes, they are human after all. But they listen to customers by reading reports and Danny picks better products while Sandra makes sure they get assortment depth, allocation, placement, and pricing right. 

The problem is listening can be a real effort sometimes. Danny and Sandra need to go through a multitude of different reports to find out what different types of customers are telling them. Sometimes they need to ask their colleagues in IT to share information. Sometimes information that can help simply isn’t available. 

Once Danny and Sandra identify a specific issue, like maybe they have ordered too many red t-shirts for women and too few for men in a cluster, they are great at figuring out ways to improve sell-through. Computers can help by running hundreds of simulations and presenting the best options to Danny and Sandra. Unfortunately, Erratic Retail is behind the times, so Danny and Sandra need to run simulations manually or fiddle with excel.

If listening is an effort, implementing solutions can be an even bigger effort, from getting approvals to communicating with colleagues managing channels, operations, stores and supply chain, to ensuring correct execution of their solution can be taxing.

So in a nutshell Erratic Retail, as a company, doesn’t think fast enough to reliably spot potential stock-outs or overstocking early enough to pre-empt. Even when they do, their response is often sub-optimal and slow and it’s not because Danny and Sandra are slow.

Now Danny and Sandra are at their best when they are designing solutions to improve sell-through and avoid potential stock-outs or overstocking for specific items. But the time they spend collecting information, running manual calculations, sharing information, getting approvals, and expediting execution reduces the number of in-season adjustments they can make. This is what really makes Erratic Retail a slow thinking company. Since Erratic Retail doesn’t want to lose out on sales, they end up ordering larger quantities than they should.

So how do you turn Erratic Retail into Ninja Retail?

Much of what Danny and Sandra do follows pre-set business rules and can be done more efficiently by bots. Whether it is collecting data, monitoring performance against plan at the level of each store/website and SKU, simulating hundreds of scenarios or tracking execution, bots can do it much faster and with 100% accuracy. But bots cannot replace human ideation, intuition, and common sense. To think faster as a company you need to build processes that assign data collection, routing and crunching to bots, ideation and decision making to people, all within a structure that incorporates organizational knowledge and expertise. If you think that’s just a platitude check in next week to see how no-code automation can accelerate how fast your company thinks.

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