Labor day is just around the corner, and a strong retail sales figure could be just the boost to reinforce consumer confidence in the US and global economy. What do retailers typically do for such events and what role does an ERP application play?
Retailers are used to seasonalities in their business, sales are usually skewed towards weekends and major holidays. Labor day marks the end of the summer season in US, traditionally similar to May Day celebrations, US version is more marked for resting, picnics and enjoying the last days of summer. This event is also popular as it is the last opportunity to buy before the schools start. It also marks the start of the hugely popular NFL and College football seasons.
All of the above create a fervor and activity in retailers around putting their best foot forward to meet the customers and converting every single opportunity of sale. Some of the areas where the enterprise application (Oracle, PeopleSoft, Retail etc) plays a big part are
Pre-Event
1. Procurement
As you can imagine planning for such events requires lead time to procure the necessary goods across the entire supply chain. Typical peaks for procurement occur around August timeframe, at least a month before the actual event, some retailers vary this depending on their lead times to procure.
This is typically carried out based on the sales forecast with additional considerations given to the economic environment. Planning modules of Oracle are typically utilized to generate the sales forecast and from that POs are created and sent.
2. Receiving and Store Allocation
The merchandise procured has to be received in the warehousing system and distributed across the various stores. This function is typically carried out using Oracle Transportation Management or Manhattan products.
3. Labor Scheduling
Store operations require special care and planning to address the volume of traffic that goes through Retail Stores. This is usually done using specialized labor scheduling packages such as Kronos, Red Prairie.
This involve setting the staffing levels based on skill and need to carry out the operations in a store. The planning is done based on needs as well as cost by taking into account various factors such as the different compensation types - cashier, sales, shelf stocking etc.
4. Multi Channel Order Management
On the days of the sale and preceding the event, the various channels of order management will witness a heavier volume of orders flowing through, often any errors in these have to be resolved with high priority due to the increased focus on the event. This includes credit card processing as well as order allocation activities which are carried out in order management systems such as Oracle, PeopleSoft or Sterling commerce OM system.
5. Financial Transaction processing
Given the volume of transactions flowing through, the revenue side transactions have to be processed with a higher focus. The cost accruals typically occur during the procurement phase and actual liability postings are delayed until the invoices are matched and paid. This is the core function of the GL/AP/AR teams.
6. Reporting
Finally, the most important piece of this entire event is to be able to turn around reports showing various parameters such as item category, store, department, vendor based reports.
Most retailers release the labor day sale statistics within days of the event and this requires gathering, reviewing and verifying the sales data through the various Sales, Order and Financial systems. This is often best sourced from the ERP systems. No report is worth sharing until the financial verification of the data has been carried out.
What other areas are you seeing activity in, in preparation to the Labor Day Sale?