Forecasting Trouble Ahead
November 8, 2004-- Home Textiles Today,
WORKING ON THE STUDY of who is doing what to whom and where regarding offshore sourcing, along with the type of sourcing they are doing, one tiny tidbit mentioned almost in passing by a couple of fabric folks was — forecasting.
It would almost seem a basic in retailing 101 in the 21st century that accurate forecasting would be as normal to retail executives as brushing one's teeth or walking the dog.
But it seems that ever since the mid-1900s, when forecasting became part of the retailing mantra, most of the players still haven't got it right — yet!
From the comments of suppliers, within and without the home textiles world, the lack of forecasting prowess is one of the major hindrances of working within the parameters of today's sourcing challenges.
In fact, in conversations with senior executives of some of retailing's marquee names, these sheepish guys (yes, once again guys) admitted that they just haven't been able to get the forecasting challenge together.
With all the sophisticated devises that can immediately charge back a nanosecond's early or late delivery from a supplier, pro-rate markdowns or ad allowances; it seems remarkable that retailers just can't develop a formula for forecasting needs — even of basics.
Until they get this seemingly minor chore right, sourcing, whether here or there, will pretty much be up to chance.
And that's where the replenishment issue raises its head.
Typically in home textiles, retail profits accelerate when a strong item stays on the floor for more than a nanosecond. With today's sourcing challenges — and the shrinking opportunities for reorders on strong sellers due to distances from supply — there's going to be more in and out across the board.
Suppliers, increasingly loathe to be the bankers for the offshore reorders and retailers, certainly are not going to pay upfront for them. Just think of the massive numbers of mismatched bed skirts, pillow shams, accessories items and the like that would result from a reorder, if not from the first order. But even more importantly, the lack of a semblance of continuity will impact overall business.
The question this space has asked more than once — who eats it?
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DayThree from the NY Textiles Market