Assortment Planning

Here's something a bit different? Ideally you'd want to see this for one single store grade by phase as well. I can't stop playing with this - it's very gratifying to see the range suddenly appear visually!

Nice to see a client doing well!

Sainsbury TU clothing have increased sales by 65% in the 2 years since they launched.

I recall that one Merchandise Planning vendor on our forum tried to blame the misfortunes of several US companies on their use of one of his competitor's merchandise planning software offerings. That wasn't very fair so I don't suppose I can claim too much credit for the fact that TU clothing use our Impact Planner software, but it's nice to think we might have made a small contribution!

If you can't stand the heat....

So the "Achieving Merchandising Excellence in Fashion Retail" conference came and went.

There was some interesting content which I may comment on once I have had a chance to digest it. I missed the end though because I just couldn't stand to stay in the room any longer. This had nothing to do with the content or the company.

The room at the Cafe Royale was so cramped that we were jammed in with shoulders touching the people next to us and the air conditioning, on a moderately warm late September day, simply couldn't cope.

It takes a lot for me to walk away from something interesting that I have paid good money to attend, but this venue was just the pits.

I was really starting to feel decidedly uncomfortable by about 3 p.m. so I made for an early train.

Let's hope Drapers choose a better venue if they run another of these, or they certainly won't get any repeat business from me.

Ah the poor dears!

On the one hand:

"The British Retail Consortium (“BRC”) has argued that, in a time of rising property costs and falling retail sales, landlords should abandon the traditional requirement for rents to be paid three months in advance in favour of rents being paid monthly and in arrears. The campaign is intended to improve struggling retailers’ cash flow and bring property more in line with ‘standard business practice’.

On the other I get this from a client:

"Dear Sir ,

"I am writing to inform you that our payment terms will change to 60 days. This will bring BadCo in line with the the terms used by the majority of businesses in the retail sector"

The words "Have", "Cake", "Eat" and "It" it spring to mind ;-)

Perhaps I should write back telling them that my response times have gone from immediate to next day for those clients who don't pay on time according to our mutually agreed terms.

Obviously I won't, but I shall be adding one month's worth our standard late payment penalty of 2% per month to all invoices (just to keep in line with standard consultancy industry practice you understand) .

They will then have the option to pay according to our mutually agreed terms and not pay the penalty. Time is money after all.

Maybe I'd feel different if they had thought to discuss this rather than just telling me, (but I doubt it).

The £17 Million squeeze?

According to Retail Week "Debenhams has written to a number of suppliers demanding a 2 per cent cut in the price the department store pays for goods. Bhs, Arcadia and Marks & Spencer have all made similar moves to get better terms from suppliers."

That probably equates to a full 1 percent hike in Gross Margin if they can achieve it which on sales of £1.7 billion would equate to £17 million if it was successful across the board!

So have Debenhams buyers been being ludicrously generous to these suppliers in the past? I find that hard to believe, but if not and the previous deals were fair to both sides, then you have to ask if this is a viable long term strategy. as it relies on the suppliers still being around to deliver the stock doesn't it ;-)

Of course you might argue that in the face of constant retail price deflation they are just sharing out the pain.

You have to wonder how long we can expect to see men's trousers being sold for less than £5 though.

Merchandising gets some attention

For the first time for a long while the UK is having a conference dedicated to Merchandising and Merchandise Planning - Achieving Merchandising Excellence in Fashion Retail.

It is taking place on Thursday September 28th 2006 in London.

It promises to be interesting - if I get time I'll post some comments here.

At the same time there seems to be an increase in interest in planning solutions all of a sudden. These things tend to be cyclical - I recall that a few years ago Merchandise Planning was on the agenda at every conference here, but of late it seems to have slipped off the radar a bit. Last time I saw a similar increase in interest it co-incided with a downturn as things got toughter. Hold on to your hats!

Are we like daffodils?

In the UK Sunday Telegraph this week there was an article that suggested that the emergence of flowers like daffodils was dependent on the number of days where the temperatures exceeded a given level (Growing Degree Days) - I think the article suggested it was 6 degrees C. For daffodils the figure was 50 positive days +/- 10. Negative days don't count as there is no such thing as negative plant growth. This allows you to predict with some certainty when the daffodils will appear in any given area.

I wonder if a similar principle could be applied to consumer behaviour with regard to purchasing spring/summer ranges. It would be interesting to test the theory. I suppose that the problem would be that a:) weather is local and b:) long range weather forecasts are pretty unreliable.

Back again!

It's amazing how things like this blog get forgotten in the face of a large volume of real work!

It's been an interesting summer over here in Europe with the trade "problems" with Chinese goods dominating the retail news. Rampant protectionist disguised as naivete seems to have been the order of the day. Italian manufacturers who have had years to anticipate the end of the MFA were apparently taken by surprise by the volume of imports and need time to adjust.

The UK government surpassed even themselves in a demonstration of total lack of understanding of the retail market. It never seemed to occur to them that lead times and plans were in months not hours, and that supporting a quota on imports with no notice was going to damage an awful lot of retail businesses (Mind you this is a government that thinks retrospective tax legislation is a fair way to deal with people)

Our merchandise planning training course has been gaining in popularity. We have some very good feedback and look forward to continuing to shed a little light on this area. Maybe we should add a chapter on anticipating government legislation in the Strategic Plan!

Imitation is the sincerest form of flattery!

"Meanwhile, i2 also unveiled a deal with Microsoft, which would enable customers to use Excel as an interface for i2 applications. Executives at i2 admit that end users frequently prefer to use Excel as entry point to supply chain planning because of unfamiliarity with its own tools; integrating i2 applications with Excel should lower barriers to adoption.
....i2 is also revamping its sales structure, placing a greater emphasis on consulting and pre-built application aiming to reduce the complexity of deploying its applications."

Infoconomy 13th May

Some of us have been using Excel as an interface to robust planning applications for years! Our own IMPACT Planner for one.

But putting a spreadsheet in front of the users is only part of the issue - you have to give them performance that sings too! You don't seem to get that from the monster ROLAP based planning systems these days (in spite of their inflated price tags)

How many WSSI applications out there can load a full year's worth of history data and calculate a top level summary in less than one minute? We can do that with IMPACT Planner!

It would be fun to do a Merchandise Planning Olympics and to measure the performance of the behemoths against the nimble, smaller players in the game. It's not too much of an exaggeration to say that most of the "major" systems would still be loading their splash screens after we had finished!

I wonder if the last part about "pre-built applications" means that they are resuscitating the old Quickstart model from the late 90s! I don't suppose anyone is going to argue that the major cause of merchandise planning project failure is over-complexity, but am I alone in wondering how you square off "placing a greater emphasis on consulting and pre-built application aiming to reduce the complexity of deploying its applications". I can see how the latter works, but I am not sure how more consulting does that. After all it's not often you find consultants who "reduce complexity" ;-)