"Crop tops are out, puffer jackets are in"

Alex and Maxine (Max), both worked for a large national fashion retailer. They sat in the office canteen and frowned as they sipped on their coffees, not saying much.

They’d just come out of a big meeting headed by the CEO and to both of their surprise, were mentioned specifically during her impassioned speech.  “I want this company to qualify as a Retail Winner”, she said, “and Maxine and Alex, I am relying on you two, in particular, to help us  achieve this.”

Although shocked to be called out in a big staff meeting like that, they’d understood why the CEO had targeted them directly. They knew that insufficient supply chain management, analytics limitations and inadequate merchandise optimization were responsible for much of the company’s profit leakage. This was frustrating because they knew they had made the proper strategic calls in selecting trending products and yet this hadn’t reflect in the results.

The CEO wanted them to plug those leaks ASAP before they transitioned from the summer to the autumn season and wanted to see dramatic results before the winter season ended. She also wanted them to pay attention to high logistics costs and stores out-stocking too frequently.

Their company wasn’t exactly lagging behind the competition, but to qualify as a Retail Winner, the CEO said that they would have to start growing 50 per cent faster than the rest of the women’s fashion segment and obtain an annual sales growth of 4.5 per cent or more. This was achievable but Alex and Max knew that they would have to seriously hustle to make it so.  

As the Merchandise Planner and Retail Supply Chain Manager, respectively, Alex and Max already had their hands full prepping for the ranges that would be on offer for each season, and now they would have to figure out how to eliminate all the itty bitty things that were eating into the company’s profit share too.

Where would they even start to become Retail Winners?

‘Improving our customers' experience was the company’s motivating slogan for the upcoming season, so it seemed the obvious choice for Alex and Max as a point of departure. They planned to do this by streamlining the supply chain process in such a way as to optimize fulfilment.

They knew that stock-outs, heavy shipping charges, inefficient returns processes and inconsistent logistics were often the cause of customer disappointments, but how could they analyze and improve these from a holistic perspective -urgently- when they needed to?  

1. Failing to plan - planning to fail?

In preparation for autumn, Alex (the Merch Planner) had already assessed previous sales and done the research to determine which items would be on trend and, hopefully, fulfil customer demands.

He’d been tracking consumer demand patterns and believed he knew what clothes would move well, and in which stores across the country.  He had an uncanny reputation for knowing what would be in fashion next season but Alex longed for a world in which he was not constantly spending his time sifting through different data sources to back up his intuition.

There needed to be a constant feedback loop between the supply chain, inventory, and the merchandise planner, but it wasn’t always possible to keep this loop going and up-to-date in real-time.  

Meanwhile, in her role as Supply Chain Manager, Max was concerned with the costs of fulfilment options, the handling of returns, optimized shipping costs, delivery details, and numerous other supply chain intricacies.

All of this data needed to be captured and analyzed to tune the supply chain and keep operational expenses down. But this was easier said than done and Max didn’t see it as a chain at all and more like a multi-faceted and complex network that needed to be managed.

Without a consistent way of capturing data from these various sources added to the complexities of the supply chain, it was almost impossible for Alex and Max to bring about a ‘water-tight’ financial plan they could bank on and comfortably manage to this plan in real-time.

The words “failure to plan is planning to fail”, came to Max’s mind as she considered what the CEO had tasked them with.

2. From targets into SKUs

Alex had done his research.  He had a very good idea of who the retailers target market was, but he didn’t always have up-to-the-minute data on them and their behavior.  

He knew that it was vital to ensure that customers got what they wanted, when and where they wanted it and that running out of stock or any other failed attempt at customer fulfilment was bad for the bottom line, but he wasn’t always in a position to prevent this from happening.

Ignorance is bliss but not when it comes to business.  

If only there was a way that he could access data on who was buying what and where, as it happened, then Max would be able to ensure that there would never be a stock-out on their fast-moving clothing or too much inventory of items that nobody really wanted.

If Alex and Max had a steady stream of that data readily available they could save significant costs on logistics and warehousing for the stock that didn’t move and increase the profit they could make ensuring they had enough of the garments that would sell where they would sell.

The accuracy of allocation and replenishment would have a large effect on item availability in all channels, which would be critical for good customer experience, in-store and online. How could they implement this?  Unified data.

3. Up-market guesswork

The more information Alex could harvest about the market, the better he could move their stock.  

If he could overlay data between regional demographics and store-level sales, he could better predict where to send the new clothing lines being introduced by the Merchandise Planner.

If he had access to information about which of the stores were located in colder climates for example, and knew for a fact from the data that they would be more inclined to buy warmer and bulkier clothing, he could make the necessary provisions for this.

He also knew that data that would allow him to customize how he promoted his range of clothing to different markets in different places, he just needed to find a convenient way to get his hands on it in a unified way.

But for the most part, Alex was making these calls on snatches of data he collected from all over the place, guesswork and gut feeling, which he knew were not good enough.

4. The good, the bad and the underselling

To manage as smooth a supply chain process as possible, there were many variables that Max would have to consider as Supply Chain Manager.  

She would need to be able to audit which vendors could be relied upon to deliver and which of them might leave them in the lurch, unable to satisfy customer demands.

She constantly had to update her records of who had been good and who had been bad to prevent making the same mistake again. Then there were those unexpected setbacks, like the previous winter when some of the distribution centers had been snowed in and vendor deliveries were not able to be on time.

Her life seemed to be an unending culmination of lists about which supplier was capable of what and when which store preferred delivery of stock of what and where in addition to a neverending deluge of logistics information that needed her constant attention.

It was getting harder for her to keep track of all this information and still manage to stay on the same page as Alex, nevermind the rest of the retail company.  They all had so much data stored in so many places that could make them help one another be more efficient, how could they get it all into one place?

How could they share this data efficiently?

5. The admin beagle and record keeper

Max often referred to herself as a “paper wrangler” because supply chain management required so much admin.  For compliance and other legal purposes, part of her accountability involved being on top of heaps of important and not-so-important documents and knowing the difference.  

Max needed to know which vendors were supplying fashions that were the real deal, and which were ‘knock-offs’ or fakes.  She needed to ensure she had all the necessary paperwork (certificates and licenses) in place to make sure that the labels they were selling were authentic, not cheap imitations. This was very important to their customers.  

She wished there was one place she could go to put all this data in a customizable way that she could later revisit whenever she needed to.

6. Here we go again - the cycle continues

Before they could blink it was already the end of autumn and Max and Alex would have to begin the entire process again to prepare the distribution of their winter range.

Max had not been able to gather all the figures from the autumn sales yet and Alex was sure that the next season would, once again, have to rely on a lot of his guesswork.

Alex and Max sat together and frowned over their coffees once again because they just didn’t know what they would tell the CEO when she expected “Retail Winning” results in just a few weeks.

Max was frustrated because she knew that with “one version of the truth” (the right data in the right format, streamlined and available in real-time), she and Alex would’ve been able to achieve this goal.

“If you can’t measure it, you can’t improve it”, Maxine thought to herself sipping the last of her cold coffee.

Retail-winners streamline their data to act swiftly, explore these solutions with us.