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CASE STUDIES

Merchandise Planning & Management

Issues on hand

This brand in accessories had a target to grow SSS (same store sales) in double digits across a large number of points of sale running into several hundred.

The brand also wanted to have a method to arrive at right size of quantity per design and to distribute it in the most optimal manner, given that sales level differed from location to location.

Idea was also to hold down value loss due to discounting to a minimal % and earn profits in the retail business.

Approach

Despatch frequency per point of sale over 52 weeks was analysed to check how often each location received the stock feed in a period of a year.

Delivery lead times of transporter to various cities were analysed over a period of year to identify gap between receipts of two consecutive stock feeds at respective locations/points of sale.

Sales locations were analysed for studying patterns of sale depth per SKU in a given category per month and their design display capacities. Exceptions which were far off from the average were highlighted and checked for patterns.

Retail software was asked to report on sales velocity of SKU as rate of sale when stock was present.

Solution

To aim at SSS growth, the first step was to identify high selling potential locations and increase their replenishment frequency where cost of transport would have been more than compensated by incremental sales. Next, for others, dispatch schedule was fixed in a manner to reach the goods to be able to capitalize on week-end sales.

A distribution matrix was plotted for a ‘buy-plan’ of items to groups of sales locations by classifying them on certain parameters. This formed the basis of quantity to be produced for an item/SKU in the category. The same matrix was used in fixing base stock per SKU per location and was fed into ‘replenishment logic

The brand grew by 21% in SSS (same store sales) and had the highest growth compared to its competition.

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