Assortment Optimization

7THONLINE SOLUTIONS

Overview

Retail Solutions

› Assortment Planning

› Collaborative Buying
Platform

› Optimization Services

›› Assortment

›› Cluster

›› Size

› Visual Merchandising

› Outsourced Services

Vendor Solutions

In order to determine optimal store assortments, retailers must consider financial and strategic objectives, historical sell-thru and missed opportunities, local demographics, and many other factors. Though much of this data is available to them, the volume and complexity prevents them from effectively leveraging it. Instead, merchants are forced to rely on intuition and their own number crunching, resulting in unnecessary missed sales opportunities and excessive markdowns.

With 7thOnline Assortment Optimization, retailers can be confident that they are investing in a merchandise mix for each store that maximizes profit potential. Based on historical performance, customer data, and strategic objectives, 7thOnline Assortment Optimization generates the optimal category, class, and SKU breadth and depth to meet local demand while incorporating the necessary constraints. The optimization can be performed at various levels depending upon the retailer's requirements:

Inventory Optimization: Generates the recommended distribution of purchasing dollars across various categories of merchandise (e.g. fashion, basics, key items, etc.) required to maximize gross margin

Class/Location Optimization: Recommends the dollars and units by class for each store required to maximize gross margin

SKU Optimization: Recommends the number of style/colors by class by store and the associated units required to maximize gross margin

KEY FEATURES

Estimates sales potential at different price discount levels Identifies the top selling styles and recommend the quantity needed to maximize margin contribution Identifies and accounts for lost sales on styles with under purchased units Identifies and accounts for an under-purchased breadth of styles Considers the potential price erosion as more units are added to styles Determines the optimal balance of adding units to the top selling styles or adding additional styles Customizable to meet specific retailer requirements

KEY BENEFITS

Increased SKU productivity (identify and reduce under-performing products and invest more in top sellers) Increased full-price sell-thru and reduced markdowns and stock-outs Improved customer satisfaction and loyalty through localization of assortments Reduced administrative costs and errors Proprietary algorithms built specifically for apparel, footwear and accessories User-friendly interface facilitates rapid user adoption