Intelligent Inventory Management of Apparel, Seasonal, & Short Life Cycle Products
Increff named as a Representative Vendor in the 2021 Gartner Market Guide for Retail Assortment Management Applications (RAMA): Short Life Cycle Products
Covid 19 exposed inefficiencies in processes and systems, highlighting the need for preparedness and resilience through digitization. In the report, Gartner predicted that “by 2024, Tier 1 retailers in North America and Europe will reduce inventory carrying costs by 30%, dramatically improving free cash flow for digital investment, while revamping balance sheets. Much of this reduction will be effected in seasonal, short life and apparel categories where manual processes and gut feel are no longer enough”. The report further states, “Customer’s expectations of a unified retail commerce experience continue to challenge multichannel retailers to pursue digital business transformation”.
Accurate merchandising requires complex orchestration across all processes such as assortment planning, in-season analysis, space management, allocation, pricing, replenishment, and supply chain. Modern cloud-based solutions, like Increff Merchandising Solution, incorporate advanced algorithms to create location-specific assortment to drive transformation through better customer understanding and alignment to limit excess inventory. Shortened product life cycles are due to fast-changing customer preferences e.g. in fashion, or rapid technology innovation e.g. consumer electronics. For such products, production and procurement decisions need to be made fairly in advance, or JIT (Just-In-Time) so production can start as soon as an order is received so no finished goods are stocked.
Task automation enhances speed and shifting from excel to purpose-built applications augments human activity. Retail Assortment Management Applications (RAMA) for omnichannel brands are foundational for modernizing merchandising processes and form an integral part of the core merchandising application suite. Using big data, both historical and near real-time, with advanced analytics and algorithms helps create store-specific assortments aligned to specific customer behavior segments.
Increff Merchandising Solution (MS) considers the uniqueness of each store up to ‘segment of 1’ for managing merchandising processes accurately.
- Assortment & Planning – Right assortment planning is critical to achieving a competitive edge in the industry by reducing carbon footprint and wastage of resources. Increff MS helps determine and allocate the right set of inventory to the right sales channels. It closes the gap between financial planning and store planning by determining the optimal mix that makes stores more attractive for local shoppers thus improving profitability and sales efficiency. It provides the ability to plan complexities in a user-friendly, cost-effective manner that maintains in-season and new-season inventory freshness, event-based allocation, and proper markdowns during liquidation scenarios for maximizing sales.
- Automation – Increff MS is an algorithm-driven SaaS platform that leverages scientific decision-making to determine the right store-wise allocation, based on real-time data analysis of 17 layers of attributes. It considered factors like style attributes, True ROS™, in-store style health, etc, to increase gross margin and maximize return on investment through item-level visibility and granular data analysis. It facilitates the automation of buying cycle by setting benchmark indicators to signal when a style’s quantity is depleting and requires reordering considering the lead-time. It allows auto-replenishment and replacement by identifying non-moving dead styles to suggest pullback to the warehouse.
- Inventory Management – Regional Utilization and inter-store transfers bring brands closer to customers by intelligently distributing, and re-distributing, inventory according to the local demand. It improves stock health, optimizes inventory, helps in efficient order fulfillment, and prevents extra buying by utilizing the existing inventory to the fullest. Fulfilling orders from the nearest store or warehouse helps brands experience significant savings in logistics costs and manage faster deliveries efficiently. Timely order fulfillment reduces the rate of returns and increases customer loyalty.
- Reporting and Analytics – Increff MS’s customizable BI dashboards are capable of generating 50+ analytical reports that provide a highly visual, end-to-end workflow and detailed review of business performance to take focused action on improving traffic conversion and increasing demand fulfillment. Brands can analyze Target vs Achievement, month-on-month store performance for managing operations efficiently, and customize viewability of dashboards based on stakeholders for Category performance reports by calculating sell-through-rate, Planogram adherence, Top seller, and Deadstock.
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Gartner, “Market Guide for Retail Assortment Management Applications (RAMA): Short Life Cycle Products”, Robert Hetu, May 28, 2021.
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