PMC Retail's Danny Rappaport discusses planning for change in an unpredictable world

The better you plan what you’re doing, the better the outcome. That's just as true in retail as it is in life in general.

The oversimplification of retail into Plan - Buy - Move - Sell always suggested that the critical functions of the retail business start with planning, and if we get that right everything else would be fine. But is this still true?

In fashion retail certainly, the standard four-season buying calendar brought with it a reassuringly predictable cycle that meant you had a pretty clear idea of when to stock build, phase in and out new lines/ranges, mark down (if at all) and run promotions.

Reflecting back on earlier in the year, when the tripling of container costs and the unprecedented build-up of shipping stuck in and around Shanghai was headline news. 

And with the huge increase in energy costs and the reappearance of retail inflation, I’m wondering if all that planning based on supply chains, budgets and historical data actually achieved much at all.

In such uncertain times in climate, political and financial terms do we need to embrace the ethos behind the old joke, “How do you make the good lord laugh?.. Tell him about your plans for the future…”?

So, if we can no longer accurately predict the criteria that affect the market, costs, demand and sales, perhaps it's agility and the ability to change fast that matters, at least as much, if not more than the plan? 

Digital transformation by Covid

For those of us that earn our living in the field of digital transformation, the inescapable truth is that Covid prompted faster change in retail digital adoption and practice in two years of pandemic than the previous ten years of efforts without it.

A recent McKinsey report suggested that across industries digital adoption leapfrogged seven years of progress.

Apart from proving that necessity is the mother of invention, it also raised big questions about the value of effectiveness of change programmes and our ability to drive change in the organisations we work in.

Broadly, the retailers and their partners that could drive and cope with change quickly survived and prospered and those that couldn’t, didn’t.

Retail showed great inventiveness in the pandemic and as a vital industry helped to save lives and do things differently. Most people believe that the changes we saw are here to stay. The barriers to digital adoption have certainly reduced if not disappeared altogether.

So how do we make sure we are able to drive change quickly and effectively? While the pandemic as a catalyst for change was unprecedented in recent times it may not be the last of its kind.

Who could have predicted the around 50% increase in online retail in less than a year, and some of the other Covid consequential impacts on our buying habits - like the near 20% reduction in sales of makeup as we go out less and work from home more?

Suits have almost disappeared from the high street, as even M&S have withdrawn that most iconic of business uniforms from many stores.

The retail industry and retail people are remarkably resilient and innovative. Retail is still the largest private sector employer in the UK, and with 1 in 3 of those jobs being held by under 25s, it has to be the biggest training ground for customer facing experience there is. If any industry can cope and thrive in times of change it’s retail.

Change as a constant

Big changes often fail, small changes have a much bigger chance of success. 

It’s not as easy as “small change – good , big change – bad” but in terms of risk it's certainly true.

Sometimes big change is necessary, but how change is implemented, as well as the tools and architecture to enable change to happen, is increasingly important.

We all know 'agile' is a science in itself. That’s the 'how' but what about the building blocks of the architecture to enable change to happen safely?

The idea of 'modularity' isn’t a new one, but the implementation of separate functional components, underpinned by microservices architecture, flexible APIs and low code, is now a reality behind many of the retail package solutions and bespoke 'best of breed' combinations that are used widely.

Accepting the idea that 'change is the only constant' is behind some of the most innovative and best value projects we see at PMC Retail.

Nothing is ever completely future-proof but keeping up with constant change, and being able to react to the market quickly and safely is now a basic requirement.

The acceptance of the limitations and cost of legacy debt, and the traditional retail habit of sweating the asset to the point of extinction, is now much more dangerous than ever before. 

Creating the conditions for agility

Everyone agrees that agility (business and technical) is a good thing, but when modularity (functional and architectural) is adopted as a principle in the way solutions are defined and underpinned, the chances of success in implementing change increases exponentially. 

The days of the monolithic, multi-year programme are gone, and we all need to do things quicker, more efficiently and cheaper so the time to address agility through modularity is now. Strange as it sounds we need to be able to be proactive and reactive at the same time.

We may not be able to plan for all eventualities in the way that we’d like but perhaps the combination of a living/breathing plan (in-season planning) and the ability to respond and react in an agile way is the best of all possible worlds.

About the author

Danny Rappaport leads the technology consulting division of PMC Retail, supporting their clients on IT and business strategy projects.

He has a wealth of experience in providing technology and business services to the retail, finance and CPG sectors, and is extremely passionate about the markets and opportunities that exist for customers in today’s global digital economy.