Posts Tagged ‘assortment and range planning’

Fashion Innovation Series: Part 2 – Assortment Planning and Range Planning Localization

by Chris Allan • April 25th, 2010 • Write a comment »

This is the part 2 of a 4 part series on Fashion Innovation and Optimization.

KEY TOPICS IN THIS SERIES:

  1. Size & Pack Optimization
  2. Assortment & Range Planning
  3. In-season Replenishment
  4. Allocation Optimization

Look out for part 3 next week, to read part 1 – CLICK HERE. Please engage, start a discussion, or leave a comment if you like this post.

Assortment and Range Planning Localization

Customer behavior has changed…unfortunately retailer processes and systems have not kept up with the pace of that change. The way that stores are assorted needs to change – to reflect how and where the customer now wants to shop and what they want to spend their money on.

Retailers need to focus on changing the way that they plan their assortment and identify opportunities to align their offering with their customers, to drive profitability of every product in every store. To achieve this, retailers need to identify not only the financial objectives for each product in their assortment, but also the merchandise objectives – as these are key to creating a credible offering in the eye of the consumer.

The most important, but over-looked questions for assortment optimization today:

Why is this product in my assortment?

What strategies do I have in place to decide what products to include?

How am I measuring the performance of my assortment on a continuous basis?

How will this product perform in the future?

How am I aligning my assortment with local demand?

When retailers align both the breadth and depth of their merchandise offering with the localized demand of their customers, it increases full price sales and product availability, and ultimately lowers markdown spend.

There are two main areas in planning that retailers should focus right now:

Sku rationalization //

How well is the breadth of the offering aligned to the customer? It is important to identify where you have too many or too few choices for the customer and have the flexibility to execute on those decisions. If you are not doing this, you are creating both markdowns and lost sales. Retailers need to keep this flexibility and continuously monitor the profitability and contribution of each product. This will allow each store to reveal its own patterns and tell the retailer how to best align their SKUs with local demand.

Localizing inventory //

The customer is the most important element of today’s retail strategies. In order to compete in today’s market – retailers of all verticals need to focus on availability and local consumer behaviors. This kind of granular detail cannot be obtained with traditional, data aggregating systems. Retailers need to remove the simplification from their inventory planning process and focus on real-time local demand. This means creating a dynamic inventory plan that is highly reactive to local demand fluctuations, allowing the retailer to be flexible and respond to how their customers are behaving now. This allows the customer to have product available when and where they want it, in the right size, the right color, and the right style at every store and in every channel.

5 Ways to Innovate Assortment Planning

1. Optimizing inventory:

Retailers need to focus on optimizing their assortments and shaping their offering based on both the merchandise and financial objectives of those products. Many retailers are focused on shrinking their offering, but fewer wrong products will not create more sales, it will only frustrate customers. Investing in the right brands and the right products will ultimately bring new energy to the retail market. Understanding exactly where the offering should be contracted or expanded is they key to achieving those goals.

2. Better placing inventory:

Some of the best retailers have not scaled back on their inventory investments, but focused instead on where to place their inventory. Over the last year, ‘flat’ was the new ‘good’, but by putting inventory where there is demand, retailers can increase their sales and profit, while better serving their customers at the same time. Retailers can also hold back inventory to see where it is performing best – and use precision placement of their remaining inventory to increase profit and create fewer markdowns.

3. Increasing availability:

Focusing on which products need to be made available at what locations and when is a difficult task. But when the right products are available, in the right sizes and colors and in the right amounts, stores increase sales and increase customer service levels.

4. Focusing on the intelligent consumer:

The market has shifted with the intelligence of consumers. The economy has further focused the customer on seeking out the highest value for the lowest cost. The environment has also brought to light new values and new criteria that the customer has begun to judge products on. Retailers need to recognize the needs of their customers and give them products that meet these new expectations – and remember, these expectations will continue to change.

5. Focusing on newness:

If a retailer can continually have something new for the customer to see, it will increase the frequency of customer visits and increase turn rates. This is especially important in fashion and consumer electronics, where customers have become increasingly knowledgeable and demanding. If a retailer can keep up with the pace of fashion, they’ll be able to keep their inventory fresh and unique.

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Learn how to implement better planning practices to manage the breadth of your assortment

Chris Allan, Chief Strategy Officer, Quantum Retail

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You can also follow our 4-part 2010 Retail Outlook series here.

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Are you ready to know exactly what your customers are asking for at every location and to have the ability to react as their wants change? If you are looking for a solution that can drive momentum for your business this year, check out the solutions offered by Quantum Retail. Our customers see valuable results in 8 to 12 weeks and our implementation approach gives your team access to the system from early on, so you can manage changes to your processes with ease. Quantum Retail continues to help all of its clients drive positive business value more rapidly than anything seen in retail.

For more information, visit: http://quantumretail.com/services/size-pack-optimization

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Aberdeen Group Reviews Q Assortment and Range Planning

by Quantum Retail • September 29th, 2009 • Write a comment »

Quantum Retail Launches Assortment and Range Planning: Potential for Tailored Assortments in Retail

SAHIR ANAND, On September 22, 2009 - Quantum Retail launched an assortment and range planning merchandising module to expand its merchandising suite’s (termed “Q”) footprint in retail. This module is geared towards fulfilling a localized merchandising need that exists in the retail industry today due to the ensuing tough retail economy. Quantum’s latest module comes at a time when there is a willingness among leading retailers to tailor or customize their assortments to more closely match the needs and wants of their customers. This Market Alert will outline the potential opportunities and pitfalls of Quantum’s strategy at a time when product localization and store-centric assortments are gaining traction in the retail industry, yet the purse strings are not exactly loose when it comes to retail IT spending. This Market Alert also assesses this development from an end-user’s perspective.

READ MORE» Q: Assortment & Range Planning solution

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Quantum Retail Releases Q: Assortment and Range Planning

by Quantum Retail • September 22nd, 2009 • Write a comment »

Managing the inventory mix for every store in the chain is the art of retail. Q: Assortment and Range Planning merges that art with science, automation and simplicity, allowing retailers to strategically merchandise and assort their stores to drive category performance.

MINNEAPOLIS, September 22, 2009 – Quantum Retail announces the general availability of Q: Assortment and Range Planning, a new module running on its Q platform, which will enable retailers to optimize the way they approach the art of assortment and range planning, financial reconciliation and product exit management.

The software has the smarts to perform all functions of product forecasting, assortment rationalization, intelligent store clustering and behavior modeling. The module also offers advanced size, pack and markdown optimization as a service, focused on giving the retailer the highest return on the inventory they are buying. It does this by analyzing the demand of each store individually and rationalizing the product mix in each department to make recommendations to buyers as to which stores are over or under assorted, and identifies which products are holding back the category from reaching its goals. In turn, it has the know-how to calculate the best strategy to manage a product exit and phase in a new set of inventory.

“Q: Assortment and Range Planning redefines how buyers and merchants leverage planning applications. It starts with the one critical quality missing in conventional approaches: it’s actually usable,” stated Chris Allan, Quantum’s chief strategy officer. “The pace and unpredictability of retail today is challenging. Local demand changes at every store on a daily basis. Q understands that – and it helps retailers monitor the changing demand at every store, so they can align their assortment in the way that is most profitable and most strategic.”

Like all Q modules, Quantum decided to approach the assortment planning process from a different angle. Instead of managing hundreds of spreadsheets, the module constantly updates data on product performance and customer behavior, which it then uses to automate the way retailers manage and assort their stores. This allows retailers to easily determine what products should go into which locations and when, ultimately optimizing to merchandise objectives – like profitability, sales and service levels.

Continuous store insight helps Q: Assortment and Range Planning align the merchandise offering to ever-changing localized customer needs. Retailers can set strategic plans to phase out under-performing merchandise and phase in a new mix, while identifying high performing products for continuity lines. The Q module can either bolt-on to a retailer’s current system or completely replace it with the powerful Q engine which will then make sure that those categories remain stocked at the appropriate levels according to individual store demand.

Automated store clustering and assortment rationalization functions let retailers optimize their assortments immediately. Retailers do not need to wait months or years to see results; the answers from this technology are immediate and ongoing. Q helps users see the impact on their profitability and service levels with any assortment changes before they make them, as well as create several drafts to ensure that they can quickly respond when the market does not behave as expected.

The system is configured at implementation to a company’s specific merchandising goals and metrics, enabling the retailer to make strategic decisions on its assortments. Similar to other Q modules, Q: Assortment and Range Planning has a value-driven implementation approach and an expected six-month return on investment. The benefits from this product are incredible for retailers seeking rapid results.

When retailers align the breadth and depth of their merchandise offering with the localized demand of their customer need, it increases full price sales and product availability, and ultimately lowers markdown spend. Q: Assortment and Range Planning ensures that a retailer can create a product range that will meet both its merchandise and financial objectives, simplifying the complex art of merchandising.

READ MORE» Q: Assortment & Range Planning solution

About Quantum Retail Technology, Inc.

Quantum Retail has created a revolutionary merchandise optimization system, called Q, that aligns the art and science of modern retailing to the challenges of the 21st Century. Every Quantum Retail customer has achieved 100% return on investment in less than 6 months.

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