Retail margins are under pressure. Retail planners with the ability to make faster, better decisions are withstanding margin erosion and building competitive advantage.
When Blue Yonder surveyed nearly 700 supply chain leaders for the 2026 Supply Chain Compass report, faster/better decision-making ranked as their second-highest strategic priority, up from seventh in the previous year.
That reflects a world in which planning processes must adapt to constant disruptions on all sides, as covered in the ebook Battling the retail disruption hydra. Like the mythical beast, when one disruptive issue is dealt with, another arises instantly. The tool of choice for retailers fighting this ongoing battle? A planning team that moves faster, more accurately and with greater cohesion across functions.
What are the pressure factors affecting retail margins?
1. Rising input costs
Inflation in raw materials, labor and energy is cutting deeply into retailer margins as their inventory and operating costs are pushed upwards.
2. Logistical and supply chain volatility
Tariffs and major logistics disruptions force unexpected costs, or out-of-stocks and missed sales opportunities.
Strikes and port delays have driven up handling charges, and a tight labor market makes warehousing and transportation more expensive too.
3. Value-oriented, promotion-heavy consumers
Shoppers remain extremely price-sensitive after notable inflation in recent years, putting pressure on retailers to offer discounts and compete on price, eroding full-price sales.
How decisions get made faster, and more accurately
83% of retail supply chain leaders agree that real-time visibility and real-time decision-making are crucial to success. In pursuit of those real-time capabilities, planning teams are moving towards a unified approach across forecasting, inventory management and replenishment.
Similarly, 80% of retail supply chain leaders agree that end-to-end data connectivity is fundamental to their success. Breaking down siloes within planning is critical to faster decision-making and greater accuracy.
Integration across pricing, promotion and assortment
Disconnected systems for pricing, promotions, and inventory erode margin efficiency. By running pricing logic, forecasting, replenishment and supplier deals on a shared data platform, planners eliminate manual gaps and data transformation work.
These planning teams encounter fewer discrepancies, reduced out-of-stocks during promotional peaks, and more stable forecast performance, helping to stabilize gross margin during promotions.
Unifying data and processes end-to-end
Unifying planning processes helps retailers pinpoint waste and margin leakage. For example, as much as 15% of returns are estimated to be fraudulent. Identifying and preventing these can significantly protect margins, especially in categories with higher return rates like apparel.
Having a single view of inventory enables replenishment planning to reduce rush shipments and overstocks, balancing inventory across the network to maximize sell-through and minimize inventory costs.
AI and automation
The more accessible data is, the greater the benefits of AI automation. Automation in planning has to work across the planning process, not just in one silo.
Automatically generating forecasts that then have to be manually brought across to planning systems, or automatically collecting in-store data that is held in a reporting tool and has to be manually exported into planning software—these are automations that don’t stitch the process together, and can’t help planners to make faster or more accurate decisions.
Deeper integration brings speed and accuracy to margin preservation
Unifying planning and connecting data end-to-end makes planning faster by saving time for planners, and by enabling AI and agents to reason over data with fuller context, improving accuracy and decision speed. While margin pressures continue to squeeze retail, real-time intelligence is a crucial capability for maintaining profitability.
