Every retailer loses a significant portion of sales and gross margin due to a mismatch between store size distribution and local demand.
The amount of data and quantitative analysis involved in determining the optimal size allocation by style by store is prohibitive. Furthermore, the calculations of the size distribution are often oversimplified, not taking into account the price, revenue, and margin impact of missed opportunities, stockouts and overstocks in particular sizes. Without correcting for past mistakes, history is repeated rather than improved upon. These shortcomings in retail sizing result in lower profits and disappointed customers.
Retailers can avoid these unnecessary sales and margin losses with 7thOnline's powerful size analytics and optimization capabilities.
Through historical POS analysis and proprietary optimization algorithms, 7thOnline Size Optimization determines the optimal size distribution by store that will maximize gross margin. For case pack styles, the algorithm determines the optimal size mix for each pack size and the optimal distribution of available case packs to each store.
