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The retail industry is in the midst of a profound transition. Channel blurring, price deflation, declining loyalty, and hyper-competition define the environment. Retailers must adhere to customer-centric strategies to protect and grow market share. Such strategies demand unprecedented precision, speed, and coordination in anticipating customer needs—down to the store level. Success in executing customer-centric merchandising strategies requires a next-generation approach to buying and assortment management.
The i2 Solution: i2 Buying and Assortment Management
i2 Buying and Assortment Management is a comprehensive assortment planning solution for the top- and middle-tier retailer.
Some of the key challenges faced by retailers can include:
- Determining how to cater to target customers, at the local level, with a compelling product selection, pricing, and promotions
- Inability to plan down to detailed style-color levels
- Buying process not integrated with local market needs
- Receipts-driven planning philosophy as opposed to sales-driven
- Difficulty managing assortments in-season based on point-of-sale performance
- Difficulty managing seasonal transitions
- Inability to manage assortment breadth in a manner that’s consistent with top-down guidance
Leveraging the i2 Agile Business Process Platform - Retail, this highly interactive solution enables buying and planning from the early conceptual stage to the final creation of market-tailored store assortments.
The i2 solution is designed to provide retailers with the ability to:
- Bring science to the art of preseason sales forecasting with “pattern-after” intelligence and seasonal sales profiling
- Plan by store cluster using multidimensional attributes and performance measures
- Conduct the buying process in parallel with assortment planning from early concept stage through to receipt planning
- Support constraint-based optimization of receipt flow with respect to an entire supply chain
- Support the complexity of managing assortment down to the style-color or SKU at the local market level
- Plan pricing promotions and markdowns to shape demand, managed inventory, and exploit opportunities
Key capabilties of i2 Buying and Assortment Management can include:
- Profile discovery process in conjunction with sophisticated techniques allows for a robust scientific basis for sales forecast
- The buyer’s worksheet is the repository of style-color attributes and sourcing information, providing both historical and current (real and dummy) style-colors that are available for inclusion in the assortment plan
- Store-group assortments captures the richness of product, store, and shelf attributes required to build an effective, targeted range by store group, together with readily-interpreted summary information for effective reconciliation to the merchandise plan
- Choice of interactive or fully automated in-season planning process using adaptive smoothing forecasting algorithms
- Analytical support helps identify key assortment planning parameters, such as assortment breadth
- History summarization and in-line views support informed decision making on planning the distribution and options using historical “pattern-after” workflows
- Plan different price points across locations by time period
- Include dummy style-colors for “what-if” planning with supporting workflow
- Receipt planning—provides the logic required to generate the receipt flow required to support the sales and inventory requirements dictated by the assortment
- What-if" analysis—ability to make changes and run rapid incremental what-if scenarios
- User-friendly and interactive interface
Key benefits that retailers of i2 Buying and Assortment Management can include:
- Improved customer centricity by offering targeted assortments tailored to local market conditions
- Improved plan execution through integrated allocation/replenishment
- Automatic reconciliation to open-to-buy/open-to-receive
- Improved ability to account for seasonality and the buyer’s knowledge of market preferences
- Store sales plans drive receipts that are optimized to minimize inventory in the retail extended supply chain while achieving target turns/sell-through percentage/weeks-of-cover
- Improved targeted markdown decisions to maximize margin and minimize leftover inventory
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