What’s All this Buzz About New Retail Sector “Super Software” saving the day?

My activities this past month have, surprisingly, been in the Retail sector and hearing witness all their excitement about the software revolution that is turning around their companies balance sheets. Seems the top end sales “are what they are”,  but the bottom lines are improving rapidly due to the emergence of easy, affordable  point and click supply chain software. 

Two software companies generating noise lately are “The Retail Navigator “(http://www.retailnavigator.com/) and Agentrics (http://www.agentrics.com). Seems both are not the long drawn out computer conversions, rather an easy inexpensive middle ware snap on approach (translator of your existing operating system and touch points) that Buyers, DMMs, GMMs, and planners are adopting with minimum intuitive training.

I’m hearing rave reviews, even from the CFO’s, as this apparently has been spreading rapidly and quietly behind the scenes from large upscale department stores, grocery, big box electronic and even small multi-unit mom and pop stores.  Apparently the on demand/real time inventory control and delivery systems have now hatched after studying detailed analytics on retail internet sites as one leg of the three legged stool (Website, Catalog, and Storefronts.)

Perhaps there is a silver lining in the down economy as Retail companies are moving from a spreadsheet culture to the 21^st century! This is great news for the economy and consumers, check it out! Happy days may be here again.

P.S. For the occasional cynical reader, I have "no dog in this fight" with these companies, just passing on what I’m hearing from the street.

Will “Just In Time Inventory” Habits Crush Consumer Spending Come Fall 2010?

Red alert! Sorry for this negative trend forecast but:

More and More CPG importers, manufacturers, retailers, retail distributors, and catalog/internet resellers I’m talking to are playing a dangerous game of "just in time"chicken this fall with product inventory orders. Many are telling me they are placing product inventory orders only on firm buyer purchase orders. The risky strategy includes  squeezing their overseas suppler/manufacturers for delayed payment terms or loans and then stretching invoices 60-90 days for payments to all domestic suppliers (i.e. printers, raw materials, fuel, utilities, credit card/travel reimbursements to employees etc). 

Some disturbing inventory trends to watch that will keep consumer spending down this 4^th quarter even if there is an uptick in demand for goods:

·         USA distributor companies don’t have the strong borrowing  lines of credit from their banks like they used to (No inventory to borrow against to satisfy Asset Based Loans) and are trying to use their suppliers as the new credit source to a larger degree.

·         Distributors don’t have orders yet and the catalog/internet site business model requires accurate forecasting and projections of goods from Asia that take 45-90 day to get into their warehouse. Orders are light trying to wait to the last minute before pulling the trigger, Good luck.

·         Supplier manufacturers will be playing “Gatekeeper” and ship the better/bigger customers first, leaving the marginal risky resellers to a sea of back orders or non deliveries.

·         Back-orders and substitutions will rise and discourage consumer enthusiasm to up selling, reorders, add on accessories,  and higher average orders.

Here we sit in early July and most warehouses are empty of products for fall 2010 deliveries, the scramble for inbound products to ship to end consumers will be a major issue this fall. This full court scramble has already started, consider today's blog  your "canary in the mine" warning.

This situation might even make it on the Jim Cramer Mad Money Recap (albeit in September, after the fact, as he always does!).