What: Customer lifestyles are drastically evolving and the pandemic continues to influence customer purchasing priorities and penetration in the omnichannel environment, which is affecting assortment mix and demand at each location.

Why it is important: This is creating new challenges for retail operations, including a particular demand for agile merchandise planning and supply-chain processes. These activities require frequent decisions on product assortment, store, and floor-space allocations. Such decisions are not new but they are now occurring outside of typical planning cycles and with less data to guide them.

Retailers are redefining their customer strategy, promise, and journeys based on an accelerated omnichannel environment in a disrupted retail industry. They are rationalising their assortment profiles and principles by channel, analysing their online and bricks-and-mortar ranges, and ordering allocations and product space by location.

The Work From Home phenomenon

Remote working created spikes in demand for product categories and high demand in new locations, with no historical data or trends to help prepare for this change. While the trend of working from home is expected to continue, the spikes in sales and locations have eased and retailers have established new buying patterns – but the volatile environment still exists, as the impacts of the pandemic are constantly changing.

Having adjusted for the impacts of working from home and a migration away from city centres, retailers are establishing their competitive advantage by focusing on customer experience strategies. Managing omnichannel complexities is how retailers will deliver on their customer promise and expectations.

The complex shift to omnichannel

With the online business rising, retailers will reshape their online product profiles and reconsider their store footprint for products and categories. It is predicted that, by 2024, up to 10 per cent of floor space will be repurposed in department stores as the shift to omnichannel continues.

Retailers are finding omnichannel fulfilment complex. Merchants must adapt their allocation and replenishment models to support total demand, rather than basing them on sales units by location. The challenge for retailers is to adjust allocation for efficient and profitable fulfilment through the most appropriate methods, to prevent unbalanced inventory by store.

Customers’ evolving expectations

Click-and-collect and curbside pick-up are now terms widely used in homes. Home delivery has increased, with the parcel carrier acting as an extension of the retailer. Leading retailers are establishing a competitive advantage by responding with agility in their operations and re-emphasising their customer-first approach across the entire organisation. This requires the whole business to buy into a seamless, end-to-end customer-centric view.

The supply chain and last mile delivery are playing a key part in the customer journey and the after-purchase experience is important, too. This creates an added complexity for the omnichannel promise to the customer.

Retail’s new range: The evolution of merchandise planning