Retail Systems Review: A Demand-Driven Future
By Ronald Margulis
Bill Franks, CIO at Saks, told one of the workshops at the 2005 Retail Systems show in Chicago last week that retailers are “driving our ship watching the bubbles in our wake.”
This was one of the most salient points in what turned out to be a conference loaded with good content.
Mr. Franks said retailers need to “listen to what customers are telling us and then actually do those things they wish.” In other words, retailers need to operate a demand-driven supply chain that is focused on giving the customer what they want, when they want it and how they want it. Easier said than done, Mr. Franks is the first to admit, but technology is helping companies make significant strides gaining customer insight and then, importantly, applying that insight to the procurement and replenishment process.
What Mr. Franks is pointing to is a demand driven supply chain, one in which the customer is listened to, and actions are taken based on what is heard. In the case of Saks, the retailers put in place a methodology called a “Listening System” that funnels all feedback from the point of customer engagement (in the store, on the phone, via email, etc.) and analyzes the data to determine what works and what doesn’t. Mr. Franks gave the example of altering advertising and increasing the number of in-store events as a result of this process.
The topic of a demand driven supply chain was also discussed in the keynote addresses by Peter Boneparth, CEO of Jones Apparel, and Bob Willett, EVP of operations at Best Buy, and by workshop speakers from P&G, Smart & Final, Wal-Mart and Gillette.
Moderator’s Comment: Will demand driven supply chain technologies be the next big thing for retail CIO’s? Why?
P&G is betting on demand driven supply chain big time, and Wal-Mart has always focused on what customers want. More and more vendors are either touting
the demand attributes of their solutions or extending their offering to include solutions in this space. All told, there seems to be a move from “selling what you buy” to “buying
what you sell.” –
Ronald Margulis – Moderator