Managing Promotions is Number One Retail Supply Chain Headache – Report

11th May 2017

Logistics BusinessManaging Promotions is Number One Retail Supply Chain Headache – Report

‘The State of the Retail Supply Chain 2017’ research study, conducted by research firm Martec International and commissioned by RELEX Solutions, provider of integrated retail & supply chain planning solutions was published this week. It highlights the key business challenges and priorities for supply chain managers across the European retail industry.

The research, for which 80 retailers across France, Germany, Italy, the Nordics, Spain and UK with sales in excess of €100 million per annum were interviewed, indicates that managing promotions remains singularly the biggest supply chain business challenge. 40% of retailers interviewed cited ‘handling promotions effectively’ as their main supply chain planning & execution issue, whilst ‘forecasting more effectively for promotions and promotional lift’ ranked as the most significant forecasting challenge. Moreover, only 18% of retailers are satisfied with their current promotion and new line introduction planning and forecasting system.

Further significant findings include:
• Only 24% of retailers interviewed are satisfied with the analytical and reporting capabilities of their supply chain systems;
• For the majority of organisations, the supply chain is still managed in its own silo and does not take into consideration either ‘space’ or ‘external’ data, such as weather or competitive pricing. On average, retailers scored 5.1 and 4.3 out of 10 respectively for these aspects of supply chain management.

Mikko Kärkkäinen, Group CEO, RELEX Solutions, comments: “In an increasingly tough trading environment, retailers are recognising the importance of managing promotions effectively to gain competitive advantage, but the majority are doing this without suitable systems support. In a fast-changing business landscape, the fact that only 18% of supply chain managers are satisfied with the support they get for promotion and new line forecasting is not only shocking; it indicates that an overwhelming majority of retailers are not harnessing the benefits of the latest generation of supply chain technologies.”