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Why Decision Making Is Becoming Retail’s Biggest Differentiator

Black Friday may be the focal point of peak trading, but many of the decisions that shape performance have already been made by the time it arrives. As customer behaviour becomes harder to predict, forecasting, inventory planning, and visibility are playing a much bigger role in retail success.

Around 46% of consumers now start their holiday shopping before traditional peak events, while online sales account for approximately 27% of UK retail sales. Customer journeys are longer, buying behaviour is less predictable, demand moves between channels, promotional activity can quickly influence purchasing decisions, and shoppers often spend more time researching before they buy.

As a result, peak now spans a much longer trading period. Consumer demand, stock requirements, marketing activity, and supplier performance can all change far more quickly than many planning teams are used to.

Drawing on insights shared by Ollie Slade and Paul Hillier at DTC Live’s London Deep Dive Workshop, Preparing for Peak, a consistent theme emerged: forecasting now influences far more than inventory planning. It helps retailers decide what to buy, where to invest inventory, and how quickly to respond when conditions change.

Better Forecasting Creates Better Outcomes

For years, demand forecasting in retail relied heavily on historical performance.

Questions such as:

  • What sold last Christmas?
  • Which products performed best during Black Friday?
  • How accurate were last year’s forecasts?

Historical performance still matters, but it only explains part of the picture. Promotions, weather, social trends, supplier disruption, and changing customer behaviour can all influence demand throughout peak.

As Ollie and Paul have highlighted through their work with retailers, the businesses most prepared for peak are rarely those relying solely on historical data. They’re the ones continuously reassessing demand signals, supplier performance, promotional activity, and inventory risk throughout the season.

Forecasting now affects far more than stock planning. It shapes inventory planning, influences working capital decisions, and helps retailers respond more effectively as conditions change.

More Inventory Is Not Always the Answer

When uncertainty increases, many retailers respond by buying more stock.

The logic is understandable. Running out of high-demand products during peak trading can have an immediate impact on sales and customer experience.

Stock brings risk too. Excess inventory ties up cash, increases storage and fulfilment costs, and can lead to heavy discounting once peak has passed. Products ordered to protect sales can quickly reduce margins if demand doesn’t arrive as expected. Striking that balance is one of the most challenging aspects of peak planning. As Paul Hillier discussed during the workshop, protecting availability is essential, but every additional inventory purchase carries a cost.

For that reason, leading retailers focus on inventory productivity as much as inventory volume. The objective is to place inventory where it is most likely to generate a return, rather than simply increasing stock levels across the board.

Every inventory decision is ultimately an investment decision.

Visibility Gives Teams More Options

Strong forecasting depends on strong visibility.

Without a clear view of demand, inventory performance, stock risk, and purchasing requirements, teams can spend valuable time validating information rather than responding to change.

Inventory visibility helps retailers identify potential stockouts earlier, spot slow-moving products before they become a problem, and make more informed replenishment decisions.

Having that visibility early makes a difference.

As Ollie and Paul discussed during the workshop, better visibility gives teams more time and more options. Teams that can identify emerging issues early have far more flexibility to adjust purchasing, replenish stock, or redistribute inventory before problems begin affecting sales and customer experience.

Peak Performance Is Determined Long Before Black Friday

As Ollie and Paul highlighted during the workshop, the retailers best prepared for peak don’t rely on historical data alone. They track changing demand, monitor inventory risk, and make adjustments as new information becomes available.

The retailers that manage peak most successfully rarely have perfect forecasts. What sets them apart is their ability to act early. They spot potential issues before they affect availability, margins, or customer experience, and they make changes while there is still time to influence the outcome.

Inventory decisions made weeks or months before peak trading can have a significant impact on revenue, cash flow, and profitability. The earlier teams can identify risks and opportunities, the more options they have to respond.

As peak seasons become longer and customer behaviour becomes harder to predict, retailers need accurate data, clear visibility, and the confidence to act on what they’re seeing. Those that do are better placed to protect margins, maintain healthy stock levels, and go into the new year in a strong position.

5 Top Takeaways From Our ‘How to Cut Costs and Boost Profit in 2024’ Webinar

Having weathered the overstock and stockout challenges of the last few years, prioritizing precision in demand forecasting is a top goal for every retailer – especially those seeking to reduce expenses and enhance profits.

To help, we recently hosted a webinar titled Expert Inventory Insights: How to Boost Profit and Cut Costs For a Brighter 2024, featuring industry experts from retail giants like John Lewis, as well as e-commerce disruptors like Sparkle in Pink and MAX + STONE. It was a popular session, packed with practical insights, and the feedback has been excellent.

In case you missed it, here’s a roundup of the top takeaways:

It’s all about inventory balance.

The big challenge for retailers is striking the right balance between overstock, which ties up cash, and stockouts, which annoy customers. All panelists stressed the importance of taking proactive measures, predictive analysis, and strategic planning for successful inventory planning, which can all help reduce lost sales, avoid necessary markdowns and lower costs.

 Technology is your friend.

Advanced technology offers valuable insights and can help you accurately forecast demand and always know what to buy, and when to buy it. The panel universally agreed on its instrumental role in controlling and planning inventory.

However, they also noted that the essential assistance provided by tech should be combined with sound strategic and logistical planning. Technology is a powerful tool, but not a magic wand.

Open-to-Buy (OTB) can change the game.

Implementing an OTB plan can bridge planning and trading, ensuring businesses have the necessary cash to meet future sales and inventory demands.

Alison Metcalfe, in particular, shared how OTB can be used to indicate budget allocation for inventory purchase and ensures businesses have the necessary cash to meet future sales and inventory demands. Open-to-Buy planning doesn’t have to be complicated and stressful if you have the right technology in place (like Inventory Planner).

Collaboration is key.

Effective inventory management requires a well-connected and communicative organization. Whole teams across departments need the same access to inventory insights and data to ensure informed decisions, collaborative working and alignment of strategies.

Don’t forget about the impact of ‘stock age’.

Stock age refers to how long inventory has been held or stored in a business without being sold. Panelists highlighted how stock age can have a huge impact on revenue and profit. They outlined the reasons it should be minimized – namely to avoid selling at reduced prices and to maintain product relevance.

These five key takeaways offer a glimpse into the wealth of knowledge shared during the webinar. But there was lots more covered, too, including:

  • How to have tricky conversations with suppliers about performance
  • Real-world examples which show the importance of syncing marketing with inventory planning
  • Why strategically handling returns is critical to inventory planning, especially for the apparel and fashion sector

Dive deeper into all of the strategies mentioned in this blog – watch the full recording here.