Retail Forecasting Becomes Increasingly Dependent on Technology

Planning can take some of the risk out of running a company. However, businesses have had to do extra hustling in the increasingly unpredictable fashion market in the past couple of years.

“The apparel industry always has been changing. The change has been radical in the past few years,” said Frances Harder, executive director of the nonprofit business incubator Fashion Business Inc.

Harder outlined some of the ways retailers have rolled with the changing economy during an FBI-organized panel discussion called “Financial Planning for Retailers.” It was held May 18 at the California Market Center in Los Angeles.

The panelists were Don Stephens, director of global business solutions for BCBGMaxAzriaGroup; Frank Kaufman, business-assurance partner in accounting firm Moss Adams LLP; and Allie Samek, who runs planning and back-end operations for boutique chain Ron Herman Inc.

The panelists said retailers adapted to an increasingly unpredictable market by running leaner operations. Sometimes, forecasting ends up being as difficult as reading tea leaves. “Forecasts always are a roll of the dice,” Stephens said.

The panelists said businesses often base their forecasts on their previous couple years of business. But it is increasingly tough to do in a global market, where financial conditions and tastes in fashion change quickly.

When the market gets risky, many companies increasingly rely on their brands’ reputation, Kaufman said. “Sometimes the strength of the brand will carry the day,” he said.

Investment in business technology has taken some guesswork out of the forecasting game and has allowed executives to quantify their company’s operations as much as they can.

Technology skills are becoming increasingly vital these days. Samek said getting a job in a buying office increasingly depends on expertise in technology that measures what is selling and not selling on the shop floor.—Andrew Asch