How can scenario planning help you prepare for unexpected retail sales changes?

Scenario planning is an approach of understanding future of organization better. Its not about forecasting or probable events but its about plausible events. Scenarios are typically depicted as stories of future. This has become even more critical based on what we saw in Covid, Supply Chain disruptions or effect of climate change etc., Scenario planning helps us to strategize and innovate based on how and what could be potential future We try to do scenario planning for 2, 5 or 10 years based on the industry we work As per Oxford way of Scenario planning, we think how our contextual environment (things directly not in our control like Pandemic Breakout) start effecting our transactional environment (with which we directly interact)

Scenario planning is really important for Retail Sales as we are living in TUNA (Turbulent, Uncertainty, Novelty and Ambiguity) world. We have all kind of issues in our societies from Ukraine War, Supply Chain Disruptions (Suez canal issue, Red Sea issue), Climate Change (50 degrees in Delhi, Fires in California). This makes us vulnerable from business perspective, we need to be ready for any casualties and scenario planning can help us strategize, plan and mitigate to an extent so that we are not caught unaware

Scenario planning can help you to prepare for unexpected retail sales changes by enabling them to anticipate various potential outcomes and develop proactive strategies to mitigate risks and capitalize on opportunities. To create scenarios for retail sales, I would analyze historical sales data, market trends, and external factors such as economic conditions or changes in consumer behavior. By identifying key drivers and uncertainties, I would then develop multiple plausible scenarios that represent different potential future states, allowing for strategic decision-making and readiness to adapt to changing circumstances.

In context of Retail Sales my transactional environment would include my customers, my stores, my vendors, partners and my employees at a very basic level. In the same way my contextual environment will have climate, government rules where I operate, political stability, supply chain in the country so on so forth. We do scenario planning usually for an uncertainty for a time period and then try to do a what-if So if you want to do a scenario planning for a climate change of say 2 degrees after 5 years then we will have to see the impact and start planning for the same so that your sales is not impacted by the event if it occurs

One key factor that can help in preparing for unexpected retail sales is - the seasonal shift: sometimes sales can unexpectedly soar or drop due to seasonal changes, for example a sudden heatwave might boost sales of summer items and vice versa. - economic factors: can affect the sales like a recession or booms wich can impact the consumer spending habits. In general, sales managers should consider all the factors that can impact sales and make scenarios that have the right guidance when these events occur.