… for an apparel retailer

apparel retail-1

Business Challenge

  • A leading US apparel retailer with 500+ stores wanted to optimize its assortment (what items to carry at each store) and its allocation (how much stock of each item to carry)

Analytics Approach

  • ‘True Demand’ was calculated by adjusting sales for stock-outs and markdowns
  • The 10,000+ products were grouped into 12 attributes (Casual Missy, Petite, Footwear, etc) based on the product hierarchy, the seasonality and growth of True Demand
  • The stores were segmented into 2 Tiers (for each quarter and attribute) based on GMRoI and sales performance
  • Assortment strategy was based on sales per style within each tier (for each quarter and each attribute)
  • Allocation strategy was based on simulation to minimize stock-outs and low margin sale

Impact

  • $54 Million gross margin opportunity was identified by leveraging allocation and assortment recommendations

Apparel retail-Assortment Allocation