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7thOnline Advances Collaborative Assortment Planning

New York, NY - April 2005 - Visionary companies such as Dillard's, Federated Department Stores, Jones Apparel, Kohl's, Liz Claiborne, May Merchandising Co., Nordstrom, Saks, Villager, and others have been steadily gaining an advantage by collaborating electronically with trading partners on assortment planning. With this collaboration, retailers and consumer goods companies are reducing markdowns, time-to-market, and inventory redistribution costs. They are also streamlining the overall error-prone buying process.

For example, Liz Claiborne has rolled out collaborative assortment planning and streamlined buy-sell merchandising processes involving its core apparel brands at all top-tier department store accounts. Liz Claiborne is also rolling out the program to its other brands and accounts. (See Liz Pioneers Collaborative Assortment Planning, VICS Newsletter, January, 2005.)

All of those companies use 7thOnline as the enabling technology for real-time collaborative merchandising and assortment planning at the store level. "Over 650 buyers from the top department and fashion specialty stores are collaborating and completing transactions with a major brands," says Max Ma, CEO of 7thOnline, a member of VICS. 7thOnline's approach integrates joint assortment and financial planning, visual merchandising, inventory optimization, and production planning. It ties into leading merchandising and visual planning applications and Excel worksheets. "Historically," continued Ma, "retailers have allocated inventory to stores inaccurately, resulting in added shipments from stores, lost high-margin sales, and excessive clearance markdowns. Unfortunately, today's intense level of competition leaves little tolerance for error, but errors abound - and the cost of errors often equals or exceeds the margin."

May and Liz Achieve Big Gains At a recent VICS conference, Cheryl Huckabee, Senior Vice President at May Merchandising Co. said [about using 7thOnline to collaborate with Liz Claiborne] "The order fulfillment improvement [using collaboration] is substantial. That clearly has benefits of improving the overall sell-through, margins, reductions in markdowns, and overall profitability - not only because of the improved shipping fulfillment, but also because of the additional time spent and the quality put into the assortment plan in the first place. We can also see the total corporate buy in advance and influence it at the corporate level."

At that same conference session, Anne Cosini, Vice President e-Commerce/Customer Service at Liz Claiborne, said [about using 7thonline to collaborate with May Merchandising] "Now the [assortment] plan is more accurate, and it stands to reason that the out-of-box shippable is more accurate. We can adjust production to demand 2-3 weeks earlier and now the plans match the shipments much more closely. The better assortment and the more product-right, store-specific delivery yields higher full-price sales."

Said 7thOnline's Ma: "Collaborative assortment planning has been proven worthwhile for all shorter life-cycle products. While many buyers and sellers use it for basic products too, the big benefits are made on seasonal and fashion goods. It is also proving worthwhile with category management. After the initial high-level plans are determined at the category level, collaborative assortment planning properly extends the category plan to the SKU and store-level inventory."

"There are good ideas that cross industries," said Ma. "If we learn about them soon enough, we can put them to the benefit of our clients. For example, VICS sees that we need to put more into education on implementation, and we are expanding our educational efforts too. VICS sees that clear performance metrics are needed, and 7thonline is adding performance assessment modules in our next version."

About 7thOnline -- 7thOnline provides comprehensive inventory and assortment planning solutions specifically targeted to the unique planning, buying and ordering processes of the global apparel, footwear, and accessories community. 7thOnline's web-centric solution suite encompasses visual and quantitative merchandising and assortment planning tools, powerful analytical and optimization engines, and automatic order transmission capabilities in multiple formats. 7thOnline's collaborative capabilities enable real-time sharing of key business information, both internally between colleagues and externally with trading partners, resulting in better-matched supply and demand. Customer results include higher sell-thru and lower markdowns through better assortments at the door level, better inventory matching due to earlier supply/demand visibility, shorter cycle times due to the streamlined process, and reduced operational costs resulting from significantly reduced administrative tasks and error rates.