Industry Insights Archives - Page 7 of 7

How AI in Retail Is Enhancing Efficiency, Freeing Retailers From ‘Excel Hell’

7thonline sat with WWD to discuss how AI in retail is enhancing efficiency, highlighting the company’s commitment to breaking down operational silos and enhancing efficiency across the board, ensuring tailored and flexible solutions that meet diverse client demands.

Since its inception, 7thonline has worked to revolutionize the retail and wholesale industry by integrating advanced data science with more than 25 years of business acumen. Today, 7thonline is committed to helping the retail industry move away from relying so heavily on manual processes to embracing technologies like machine learning and AI that can boost productivity and enhance profitability. The company has catapulted from a start-up focused on wholesale buying and planning tools to a global leader providing omnichannel merchandise solutions. With a client list including brands such as Patagonia and Calvin Klein, 7thonline maintains its competitive edge by fostering innovation and adapting swiftly to industry changes.

Here, Max Ma, chief executive officer, and Lauren Taubes, director of business development, reveal how cutting-edge retail tech can free retailers from “Excel Hell”.

WWD: 7thonline offers a unique suite of solutions for omnichannel merchandise and assortment planning. How do you maintain your competitive edge in such a dynamic industry?

Max Ma.: We always have the opportunity to collaborate with “best in class” brands that set the industry standard for best practices. We’ve had the privilege to collaborate with some of the best retail brands, like Patagonia, Birkenstock, Calvin Klein, Canada Goose, Bestseller, among others.

It is important to constantly ask ourselves: Are we on the right track? Are we approaching this the best way? We have a passion for the fashion and retail industry that fuels our innovation. Our team is composed of data scientists and former retail executives with extensive experience and this combination gives us insights into the problems our clients are facing and the data needed for the solution. We are able to do this by creating an industry specific platform that uses AI and machine learning to revolutionize merchandise planning and allocation and drives profitability.

Lauren Taubes: There are many retail technology companies out there and some offer services that are similar to 7thonline. But we are exceptional that we are able to integrate with technologies that clients already have and that we provide unique solutions for wholesalers that are breaking down silos and fostering more effective collaboration across the organization.

WWD: 7thonline serves global clients across various regions. Can you discuss any challenges you face while catering to such a diverse clientele and how you overcome them?

L.T.: Serving a global clientele, we see several challenges, primarily around inventory cycles and demand patterns. Each market has unique trends and seasonality, so a one-size-fits-all solution simply doesn’t work. To overcome this, we’ve built our platform to be highly flexible and adaptable, allowing clients to tailor planning and forecasting based on local data.

Additionally, global clients often face logistical and regulatory complexities. To address these, we provide real-time insights and AI-driven recommendations based on their history. This enables clients to make more accurate decisions. We also work closely with leadership to fine-tune our solutions. We want to make sure that we are in alignment with each client’s specific needs.

WWD: How does 7thonline ensure its solutions cater to both well-established brands and emerging players in the industry?

L.T.: By offering a modular, integrated approach, 7thonline helps both established and emerging brands improve speed to market, planning accuracy and greater profitability. Our tools enable businesses to adapt quickly to changing market demands by truly using the data the companies have but do not use effectively.

We offer a flexible, data-driven platform tailored to the fashion and footwear industry, supporting top brands like PVH, Patagonia, Birkenstock, Michael Kors and Canada Goose across both retail and wholesale models. Our platform provides granular, real-time demand insights, down to the SKU level at each store location for each selling week, helping businesses align inventory with localized demand and maximize productivity.

With solutions like merchandise planning, open-to-buy (OTB), pre-season assortment planning and built-in analytics, we enable smarter decision-making. Our tools streamline production forecasts, optimize allocation and replenishment and enhance supply chain efficiency, ensuring products reach the most profitable channels.

WWD: Customer success stories are very powerful. Could you share a specific case where 7thonline significantly impacted a client’s business outcomes?

M.M.: Recently, one large conglomerate that we work with reported that by utilizing a wholesale account planning system, they were able to place their production orders a week earlier. This was due to better planning and led to a $1 cost reduction per garment from their supplier. This is a notable savings in the retail industry.

WWD: How important is data security to 7thonline, especially when dealing with sensitive client information in the digital age?

M.M.: In our 25 years of business we have not had a data breach. Data security is extremely important to us, especially given the sensitive nature of client information and the current digital landscape. We are committed to safeguarding our clients’ data through robust security measures and industry best practices. Our cloud-native SaaS solutions are designed with advanced security protocols to protect against unauthorized access and data breaches. We are continuously updating our security frameworks to ensure that client information remains confidential and secure.

WWD: Can you describe any upcoming features or products that 7thonline is excited about rolling out?

L.T.: Here’s another reason why working with “best in class” industry leaders makes a difference. It allows us to develop products that meet their exact needs. For example, we are rolling out several new features designed to enhance both DTC and wholesale operations. For clients, we are expanding our item level planning that integrates sales planning with inventory management. This enhanced tool will provide detailed open-to-buy (OTB) and item level planning.

The benefit is that it will enable brands to track all key performance indicators (KPIs), including on-hand inventory, receipts, sales and transfers at both the distribution center and store level on a monthly basis. Another benefit is this provides real-time collaboration between the sales planning and inventory team so that there will be no more silos between planning and execution. To continue on the path, we are working with a major footwear brand to expand into production planning. This will help us to close the loop of the retail/inventory/planning/execution cycle.

WWD: What are some of the long-term goals for 7thonline, and what strategies are in place to achieve them?

M.M.: Looking ahead, 7thonline aims to eliminate inefficiencies caused by outdated tools like Excel. I like to call it “Excel Hell” because it’s frustrating, time consuming and full of inaccuracies. The biggest offense is that it creates data silos and slow real-time decision-making. As margins shrink, manual processes become unsustainable. The future is about delivering automated, end-to-end solutions that streamline operations and improve results, removing the need for manual inputting.

Embracing AI in Retail

Known as the “science guys of the retail industry,” we’re advancing AI and machine learning through collaboration with leading clients. It’s no secret that AI is part of the future and is transforming buyers’ roles, enabling smarter, real-time adjustments to product assortments, especially for seasonal items. Studies show 60 percent of pre-season purchases are unprofitable due to decisions made without real-time data. By leveraging AI, retailers can respond to consumer behavior mid-season, improving profitability.

Our strategy for the future is to embrace AI and the crucial edge it provides by predicting trends early, reducing reliance on pre-season guesses and enhancing margins, allowing retailers to reinvest in technology and stay ahead.

To read the full article on WWD, click here.

To learn more about the latest in AI for retail demand planning and inventory management, email us at info@7thonline.com or book a demo with our team.

Minimize Markdown Items by 30% Through Smart Allocation and Planning

According to Bain & Co.’s 2024 Consumer Products Report, the industry is grappling with slowing growth and increasing pressures from both the global market and evolving consumer expectations. To remain competitive, companies are being urged to reset their growth strategies, emphasizing sustainable innovation, digital transformation and operational agility. Businesses must adapt to disruptions in the supply chain and shifts in consumer behavior, positioning themselves to seize emerging opportunities while maintaining a focus on long-term objectives.

While it might be perceived as a Herculean feat, reducing markdowns by 30% can be a game-changer for retailers looking to optimize profitability, and smart allocation and planning are key to making it happen. By strategically aligning inventory with customer demand through the use of advanced data analytics, retailers can minimize excess stock and lost sales, reduce markdowns and increase full-price sales. But how can retailers effectively forecast and manage inventory across diverse product categories?

A Focus on Breaking Down Silos

The answer is by facilitating real-time Sales & Operations Planning (S&OP) and enabling better collaboration between sales planning and supply chain planning teams–breaking down silos and fostering more effective collaboration across the organization. This is best done with an industry specific platform that uses AI and machine learning to revolutionize merchandise planning and allocation, and drives profitability. Once retailers and wholesalers are able to move away from manual processes like Excel, holistic approaches that use AI and machine learning are able to provide granular consumer demand insights. Today, the capability exists to dig right down to the SKU (stock keeping unit) at a specific store for a given week. This level of detail allows retailers to make smarter, faster inventory decisions based on real-time, localized demand.

In addition, AI-driven systems can accurately forecast demand, ensuring optimal stock levels and minimizing the risk of overstocking or stockouts by analyzing real-time sales data, customer behavior and market trends. This advanced technology enables dynamic, data-informed allocation, helping businesses meet customer demand while significantly reducing markdowns and improving profitability across various product categories.

Delivering Real Results Through Smart Allocation and Planning

Clients have experienced firsthand the significant benefits of using these solutions. For example, one large conglomerate reported that by utilizing a wholesale account planning system, they were able to place their production orders a week earlier, leading to a $1/garment cost reduction form their supplier–a notable savings in the retail industry.

7thonline clients have gained increased visibility across multiple continents, allowing them to track local demand in various countries and regions. This ensures that headquarters can stay ahead of demand signals across the entire organization. By breaking down data silos, companies are empowered to use their data to make meaningful improvements in both operations and profitability.

Streamlined Stock Management for Optimal Performance

By integrating demand-driven allocations, tailored strategies based on product attributes and real-time replenishment tools, retailers can significantly enhance their inventory management processes. Balancing push and pull methods, alongside quick reorder algorithms, ensures that stock levels remain responsive to changing demand, reducing the risk of overstock or stockouts. This holistic approach not only improves customer satisfaction by keeping popular items in stock, but also enhances overall profitability through better resource management.

Demand-Driven Allocation for Maximum Sales Potential

Effective allocation and replenishment systems are critical for maximizing product sales and reducing inefficiencies. Demand-driven approaches focus on distributing inventory based on which products have the highest propensity to sell. By analyzing consumer behavior and sales trends, retailers can ensure that the right products are placed in the right location, optimizing the chances of meeting customer demand. This method not only improves stock availability but also minimizes the risk of overstocking less popular items.

Tailored Allocation Based on Fashion, Season and Attributes

To enhance inventory accuracy, optimal allocation methods are tailored to consider fashion, seasonal trends and basic product attributes. This ensures that products are aligned with local market preferences and timely demand changes. For instance, fast fashion items may require more dynamic allocation based on emerging trends, while basic or staple items can be managed with steadier forecasts. Retailers benefit from a balanced approach that meets both store-term trends and long-term needs.

Actionable Insights for Pre-and-Post-Allocation Adjustments

A comprehensive allocation system provides recommendations not just before, but also after allocation, allowing retailers to fine-tune their strategies. Pre-allocation recommendations help in distributing inventory proactively, whole post-allocation feedback allows businesses to adjust stock levels based on real-time sales data. This continuous cycle of adjustments ensures that inventory levels remain optimal across different locations.

Technology’s Promising Future for Enhanced Profitability and Quality of Life

AI is reshaping the role of buyers, allowing them to stay ahead of trends and introduce product assortments that align with customer demand, particularly for seasonal items. According to a study published by Forbes, 60% of apparel products bought by buyers aren’t profitable, while only 40% are. This is because many decisions are made pre-season, long before customers interact with the products. AI enables retailers to gauge consumer behavior at the start of the selling season and make smarter, secondary product assortment allocations based on real-time data. Ultimately, retailers and wholesalers that are able to embrace AI and machine learning will be better able to minimize markdowns, increase profitability and ultimately enhance the quality of life for the stakeholders of the entire retail supply chain.

Read the original article on Fashion Mannuscript here.

To learn more about our AI-based smart allocation and demand planning tool for retailers and wholesalers, email us at info@7thonline.com or book a demo with our team.

Insights from Max Ma: Retail SaaS & Innovation in the Industry

Max Ma, CEO and Founder of 7thonline, shares insights into his journey from a retail software engineer to leading a successful retail SaaS company. Max founded 7thonline in 1999 with the vision of improving retail inventory management and demand planning, leveraging advanced analytics and data-driven solutions. The company has grown to serve major fashion, footwear and accessories brands like PVH, Patagonia and Canada Goose, offering multi-channel solutions that enhance inventory productivity and profitability.

Ma discusses the technological innovations behind 7thonline’s platform, including machine learning and AI, which help retailers make smarter inventory decisions by providing granular demand insights. He also highlights how 7thonline’s specialized focus on the apparel and footwear industry gives it a competitive edge, addressing challenges like seasonal demand forecasting, supply chain disruptions and shifting consumer behavior.

Looking ahead, Ma emphasizes the importance of data analytics, automation and AI in shaping the future of retail, and advises aspiring entrepreneurs to build with passion and a long-term vision. With a proven track record of innovation, 7thonline continues to evolve, preparing to lead the next phase of technological transformation in the retail industry.

Please tell us more about yourself.

I’m Max Ma, Founder and CEO of 7thonline, a retail technology platform that provides advanced demand planning and inventory management solutions for retail businesses. I founded 7thonline in 1999 to help streamline retail and wholesale planning to be more efficient. For over 25 years, we’ve been empowering retail businesses with unmatched demand visibility, advanced analytics and actionable insights. As both a data scientist and an experienced retail tech industry executive, I am passionate about merging cutting-edge technology with proven business practices.

Before founding 7thonline, I served as the lead developer for Pantone’s Electronic Color Systems. In addition, I was a member of the Board of Trustees and Treasurer for the Yale-China Association. I hold an M.S. in Electrical Engineering from Polytechnic University, where I also served on the board of the Center for Technology in Supply Chain and Merchandising. My experience extends into media as well, having worked at HBO.

7thonline has made a significant mark in the retail SaaS space over the years. Can you take us back to the beginning; what inspired the founding of 7thonline, and how did the company evolve into what it is today?

When I started working in retail as a software engineer for a CAD software company, I quickly realized that the industry needed more effective ways to boost inventory productivity. Early on at 7thonline, we introduced tools for wholesale buying and planning, partnering with major wholesalers like Liz Claiborne, Jones Apparel Group and Kellwood. Over time, we evolved our solutions to focus on cross-channel inventory planning and execution, enabling both wholesalers and retailers to align supply with consumer demand, ultimately improving margins.

Today, 7thonline is committed to helping the retail industry, which still relies heavily on manual processes, by offering technology solutions that enhance profitability. We believe that this ultimately will improve quality of life as there is a more efficient use of time, better results and cost efficiencies. We constantly ask ourselves: Are we on the right track? Are we approaching this the best way? Our passion for supporting the industry drives us forward. Though we’re still at the beginning of this journey, there’s a great deal of excitement about the future and the possibilities ahead.

Your platform is praised for its data-driven approach. Could you explain the core technology behind 7thonline’s platform and how it empowers retailers to make smarter, faster inventory decisions?

7thonline specializes in multi-channel demand planning for leading apparel, footwear and accessories brands like PVH, Patagonia, Michael Kors, Tommy John, Birkenstock, Alexander Wang and Canada Goose.

We stand out by offering a data-driven platform that specifically caters to the fashion and footwear industry, supporting both retail and wholesale models. We’re revolutionizing merchandise planning and allocation to drive profitability, enabling planners and allocators in the industry to access deep demand insights and leverage robust optimization tools for achieving critical margin breakthroughs and maximizing inventory productivity.

What sets us apart is our ability to provide granular consumer demand insights—right down to an SKU at a specific store for a given week. This level of detail allows retailers to make smarter, faster inventory decisions based on real-time, localized demand.

Our platform offers several key modules:

Merchandise Planning with Integrated OTB: Flexible planning levels for analyzing business from multiple angles.
Pre-Season Assortment Planning and Order Entry: Maximize selling potential by reverse-engineering clusters down to the style/color level by door and by week.
Easy Reporting with Built-in Analytics and BI: Comprehensive reporting tools that provide actionable insights.
Production Demand Planning: Streamline production processes with accurate demand forecasts.
Allocation and Replenishment: Ensure products reach stores and online channels where they have the highest selling potential.
Factory to DC Replenishment and Order Aggregation: Optimize supply chain efficiency from factory to distribution centers.

Our modular, integrated solutions allow retailers to improve speed, accuracy and profitability while driving higher customer satisfaction and operational efficiency.

The retail SaaS solutions market has grown rapidly in recent years. What do you believe sets 7thonline apart from other competitors in this space, and how do you maintain your competitive edge?

What sets 7thonline apart is our ability to provide a holistic platform managing the total demand across stores, ecommerce and wholesale distribution. While many companies offer solutions that address parts of what we do, none integrate these elements as comprehensively as we do, especially with the inclusion of a wholesale component. Our platform is specifically tailored to the apparel, footwear and accessories (AFA) market, which is notoriously challenging for technology solutions. By focusing exclusively on this sector, we’ve honed our expertise and developed solutions that meet the unique needs of retailers in this space, maintaining a competitive edge through specialization and deep industry knowledge.

How are your teams translating strategic goals and objectives into actionable initiatives that can be measured and reported?

Our solution enables clients to take a more proactive approach, effectively shaping their merchandising strategies and driving financial performance. By aligning strategic goals with actionable and measurable initiatives, we help clients translate high-level objectives into tangible outcomes. This approach delivers key benefits, such as lowering markdowns, increasing full-price sell-through, reducing lost sales, improving inventory turns and minimizing administrative tasks. With this results-driven model, clients can track progress and continuously optimize their merchandising strategies for maximum impact.

You serve a diverse range of clients in fashion, sports, and other retail sectors. What types of challenges do these industries typically face, and how does 7thonline tailor its solutions to meet their unique needs?

There are many reports about challenges at retail. Recently, Bain & Co. published their 2024 Consumer Products Report. It highlights that the industry is facing slower growth and rising challenges from both the global market and shifting consumer expectations. To stay competitive, companies are being encouraged to revamp their growth strategies, with a strong focus on sustainable innovation, digital transformation and operational agility. Businesses must adapt to supply chain disruptions and evolving consumer behavior, positioning themselves to capture new opportunities while keeping long-term goals in sight.

We understand that the retail industry is primarily focused on short lifecycle and seasonal products. This makes demand forecasting extremely difficult because historical data is limited and consumer demand is constantly shifting. 7thonline leverages a wide range of data sources such as POS data, shipment data, logistic and warehouse data and marketing data to analyze the demand signal from every single channel of distribution.

In the past decade, 7thonline has experienced impressive growth. Could you share a few key success stories that highlight your company’s innovation, problem-solving capabilities, and customer impact?

We have clients with firsthand experience of how they benefit from using our solutions. One large conglomerate told us that by using our account planning system, they were able to place their production buy one week earlier. This resulted in the supplier offering the client a $1 lower cost per garment. This is a huge number that is truly exceptional in the retail industry.

Another example our clients have seen is the ability to have visibility across different continents to know the local demand of different countries and regions so that HQ can always stay on top of the demand signals of the entire company. We’re removing silos and helping companies use their data to make a meaningful difference in their business.

How do you see the role of data analytics evolving in retail, and what steps is 7thonline taking to stay at the forefront of technological innovation in this rapidly changing industry?

At 7thonline, we leverage machine learning and advanced algorithms to stay at the forefront of data analytics in retail. Data analytics has always been the core of our business, providing clients with powerful insights. However, with rapidly changing consumer shopping habits, traditional statistical methods are no longer enough. That’s why we’ve adopted AI and machine learning to enhance our capabilities.

For instance, we developed a fast fashion demand forecasting application that uses AI to predict in-season consumer preferences with minimal data. This enables our clients to quickly respond to shifting consumer demand and stay ahead in a dynamic market.

Retailers are dealing with significant changes in consumer behavior and supply chain disruptions. What strategies or features has 7thonline introduced to help your clients navigate these new realities?

Over a decade ago, 7thonline partnered with a major retailer operating 8,000 stores to implement a demand-driven allocation and replenishment solution. This system allowed the retailer to make data-driven allocation decisions by indexing each product at every store location, aligning product assortment with local consumer demand. By staying closely attuned to the unique consumer behavior at each location, the retailer ensured the right products were available at the right places, reducing stockouts and maximizing sales.

We continue to build on this approach by helping clients test consumer preferences before committing inventory to all channels and stores. For example, by indexing each product, retailers can accurately assess the propensity to sell and determine the optimal allocation and replenishment levels. This tailored, data-focused strategy ensures that retailers are responding effectively to specific consumer demand, rather than applying a one-size-fits-all approach.

As a company that has been leading in SaaS retail solutions for years, how do you balance innovation with stability, ensuring your platform is cutting-edge yet reliable for large-scale clients?

At 7thonline, we strike a balance between innovation and stability by closely collaborating with leading clients. This ensures that the features we develop are not just cutting-edge, but also practical and aligned with the real needs of the industry.

Our focus goes beyond simply implementing the latest technology. It’s about providing meaningful solutions that drive profitability and improve the quality of life for those managing large volumes of goods on tight margins. In today’s data-driven economy, technology is the key to breaking through the typical 5-10% margin barrier. By reducing turnaround time, minimizing human error and enhancing overall business operations, we help our clients achieve significant breakthroughs.

An example of how we improve internal and external collaborations through the latest technology is helping clients make better supply chain decisions. By facilitating real-time Sales & Operations Planning (S&OP), we enable better collaboration between sales planning and supply chain planning teams, breaking down silos and fostering more effective collaboration across the organization.

Looking forward, what trends or developments do you anticipate will shape the future of the retail SaaS landscape, and how is 7thonline preparing to lead the way in this evolution?

Excel has become a major pain point for retailers, creating data silos and delaying real-time decision-making. As margins shrink, relying on Excel reaches a point where it’s no longer scalable. That’s where 7thonline steps in with end-to-end solutions that automate processes and deliver better results. Our goal is to eliminate the need for manual intervention by making everything automatic.

Often referred to as “the science guys of the retail industry,” we are continually enhancing our AI and machine learning capabilities through collaboration with leading clients. For us, AI and ML are not just marketing buzzwords—they’re essential tools that help retailers improve margins by allocating inventory based on current trends and customer preferences.

In the apparel and retail space, AI offers the critical advantage of predicting consumer trends early, reducing reliance on pre-season inventory bets and managing the constraints of the supply chain. Retailers using AI can enjoy higher margins, which in turn allows them to invest further in technology and stay ahead in an increasingly competitive landscape.

Lastly, what advice would you give to aspiring entrepreneurs looking to build a successful business in the technology and SaaS industries, based on your journey with 7thonline?

You have to have the passion for what you do and “build to last” instead of “build to cash out.” With 25 years and still going, I still have the passion and excitement to continue to partner with our legacy clients and obtain new partners in the fashion, footwear and accessories industry. I feel that the best is yet to come and I hope that entrepreneurs looking to build a successful business find that same excitement and feel that what they are doing will ultimately help people have a better quality of life.

Read the whole interview on TechBullion here: https://techbullion.com/from-vision-to-leadership-the-journey-technology-and-future-of-7thonline-in-retail-saas-interview-with-ceo-max-ma/

To discover the latest in retail SaaS innovation, email us at info@7thonline.com or book a demo for a sneak peek at our cutting-edge inventory management and demand planning solution.

Maximize Inventory Productivity with Multi-Channel Demand Planning

At 7thonline, we understand the challenges brands face in maximizing inventory productivity across wholesale and direct-to-consumer (DTC) channels. 7thonline’s DTC Demand Planning is ‘Store-Based’ (Yin), while its Wholesale Demand Planning is ‘Account-Based’ (Yang), for a comprehensive and complete view of Corporate Demand. The two approaches are equally vital to your business yet when they are integrated as part of a whole, the combined benefits are significant.

Through decades of collaboration with clients like Patagonia, Canada Goose, PVH, Under Armour, Oakley and VF Corp, we have learned, refined and developed an end-to-end multi-channel demand planning technology that is purpose-built for inventory management, planners and account executives/salespeople.

Unfortunately, many people think they can manage wholesale with Excel or treat it the same as retail by using a ‘store-based’ solution, which leads to overstock and lost sales. Recently, several leading, innovative brands have approached 7thonline seeking a technology that can help them overcome the unique challenges of wholesale channel demand planning.

Traditional demand planning tools were originally developed as ‘store-based’ solutions for CPG and food and beverage. After all, these are the largest consumer consumption categories so it makes sense.
However, while ‘store-based’ approaches are great for DTC brick and mortar, they cannot be retrofitted to work for wholesale demand planning—period.
Our wholesale demand planning is purpose-built as an ‘account-based’ system which is the only way to effectively manage wholesale.
It enables Account Executives (AEs) to take early demand signals from customers and provides demand visibility across all accounts.
It also enables quick order aggregation from brick-and-mortar and other channels, as well as effective planning for future demand with the aid of ML&AI forecasting.

Available to Sell (ATS) Reports can be created instantaneously versus aggregating bookings from hundreds of Excel worksheets. As mentioned earlier and in stark contrast, our approach to DTC demand planning is ‘store-based’. Utilizing both strategies for multi-channel demand planning is crucial for success.

7thonline’s unique approach of combining Yin and Yang has enabled brands to have a holistic view of demand planning across all channels, helping them drive revenue growth for nearly 25 years.

To learn more about 7thonline’s multi-channel capabilities, book a demo or email us at info@7thonline.com.

How Retail Giants Can Get Ahead of Inventory Management Issues

Amid supply chain woes, retailers are struggling to keep products on shelves and satisfy consumer demand—even retail giants are facing unprecedented inventory management problems: shortages, overstock, markdowns and lost sales.

The problem is systemic. Companies worry about shortages and err on the side of caution, ordering more than necessary to get inventory in the door. However, as demand softens, they end up with too much inventory and have to cut back and markdown existing inventory.

So how can retailers address and get ahead of inventory management issues? In 2022, Walmart was caught with 32% more inventory year over year.

“It’s crazy. 8% would have been high, 15% would have been terrible, 32% is apocalyptic. I mean that’s billions of dollars of inventory. That’s just frankly not managed very well.” – Former Walmart President and CEO Bill Simon told CNBC

Introducing Inventory Control Desk, by 7thonline. Inventory Control Desk addresses the challenges retail executives are facing regarding managing inventory level liquidity and optimizing working capital, resulting in improved customer satisfaction and increased profits.

Developed in collaboration with industry-leading clients, Inventory Control Desk was designed. Inventory Control Desk affords visibility to plan and execute promotions, markdowns, transfers and closeouts—addressing growing inventory management problems for multichannel retailers grappling with lost sales. The application provides daily, weekly and monthly sales and inventory positions and generates sales forecasts and alerts for re-orders when inventory positions are at risk.

For over 25 years, 7thonline has been helping the retail, wholesale and supply chain industries optimize demand planning and inventory management. Deployed as a cloud-native SaaS enterprise solution, 7thonline applications optimize merchandise planning and demand forecasting for clients such as Calvin Klein, Patagonia, Tommy Hilfiger, Michael Kors, Nautica, PVH and more.

Discover how 7thonline can help you minimize your inventory risk. Book a demo or email us at info@7thonline.com.

Optimizing Product Distribution with New DTC Forecasting and Planning Solution

The latest in retail innovation: 7thonline introduces Test Buy, a game-changing direct-to-consumer (DTC) forecasting and planning solution—powered by 7thonline Lab’s machine learning (ML) and artificial intelligence (AI). The Test Buy module empowers retail professionals to make smart merchandising decisions by capturing the latest consumer trends and recommending inventory to specific retail locations. Analyze inventory demand to eliminate the need to commit to large initial buys, drive margins and optimize product distribution by strategically allocating inventory.

Developed in collaboration with a long-term client, Test Buy’s cutting-edge features effectively address inventory risk and enhance retail processes to advance inventory management at the style, color, size and door level. The module’s ability to forecast and recommend based on two data points (days/weeks) empowers retail decision-making teams to allocate inventory to brick-and-mortar locations with the highest propensity to sell at full price. Utilizing ML & AI, Test Buy extracts meaningful information and predicts consumer behaviors to improve the retail forecasting, planning and management process.

Industry analysts estimate that, on average, 60% of traditional initial buys are unproductive— resulting in missed sales targets, shrinking margins and forced markdowns. Test Buy mitigates risk by delivering visibility to productive and unproductive inventory situations, prompting smart decision making regarding overstock, stock outs, omnichannel allocation mismanagement and beyond. Retail and supply chain industries are undergoing a dramatic shift where industry leaders are placing more importance on data, data science and software to gain a competitive edge. One of 7thonline’s client partners has already seen a 35% increase in gross margins after implementing Test Buy recommendations.

Fully integrated within our Open-to-Buy (OTB) module, the Test Buy dashboard provides necessary data that allows retailers to:

Evaluate initial test store effectiveness
Expand store count based on a sophisticated clustering algorithm
Determine optimal quantity for the initial and expansion store locations
Calculate each location’s size profiles based on current trend

7thonline’s continuous dedication to innovation and R&D brings the most cutting-edge, cloud-native solutions to life. The introduction of Test Buy continues to transform the way retailers and wholesalers are making merchandising decisions. The Test Buy module further enhances those processes to optimize inventory management at the style, color, size and door level; using AI and ML to forecast and recommend based on two data points (days / weeks) allows the retail decision making teams to allocate inventory to the locations with the highest probability to sell the product at full price. Spanning across all key channels—retail, wholesale and ecommerce—7thonline utilizes the power of integration to understand consumer demand, react to emerging trends and drive revenue and margin growth.

To learn more about our suite of cloud-native solutions, email us at info@7thonline.com or request a demo.

Demand Prediction Models & The Path to Retail Recovery After COVID-19

Just do it. Getting out of the gate quick and fast will give retailers an immediate advantage in their pandemic recovery—especially when reopening brick-and-mortar stores. Making smart decisions on inventory levels, promotions, purchases and future forecasts will be critical from the start. Having a tried-and-true way to determine and guide retailers will be paramount in determining whether the brand will prosper or fail to recover. Here’s the dilemma retailers are facing in the wake of COVID-19 and the steps retailers need to take to weather this unique situation.

The Retailer Recovery Dilemma

Locking down during the COVID-19 pandemic forced retail stores to close en masse, accelerating the digital disruption of ecommerce. In order to survive and thrive, it was, and still is, critical to adapt.

The post-pandemic commerce world is shaped by three forces:

Short-term consumer behavior shifts
New economic realities for shoppers
A different competitive and partner landscape

For retailers to regain business activity, they have to understand how they fit into the “new normal”, addressing slow momentum, aging inventory and shaky forecasting for the future. Consumers are still spending, but it’s important to note where and how their preferences have changed.

Aligning with New Consumer Preferences

According to Thomai Serdari, a professor of luxury marketing and branding at New York University’s Stern School of Business, “there’s likely to be pent-up demand, but possibly tempered by a new appreciation for consuming less, especially as a recession bears down”.

This pent-up demand is already being seen in China where retail stores have begun to open and consumers are reacting positively. Some fashion retail companies have achieved 80% of their 2019 revenue within the first four weeks of reopening and 95% of their 2019 revenue within six weeks. While encouraging, breaking this down by category revealed shifts in consumer preferences. Basics, such as denim and outerwear, rebounded quicker while others like accessories and dresses lagged behind.

To align with new consumer preferences, retailers should look to rebalance their supply chain and manage assortments accordingly and boost their digital presence. Companies that have embraced and invested in advanced data analytics, machine learning and automation are better prepared to react dynamically.

Leveraging Demand Prediction Models to Regain Profitability and Market Share

Advanced analytical forecasts will provide a significant advantage for retailers looking to reopen retail locations, online and offline. 7thonline has taken a scientific approach to data analysis, creating numerous velocity trend conditions to reconstruct historical data and apply forecasting algorithms down to the style/color level.

7thonline can take the zero sales data points by style/color/location and apply different velocity trends to predict the location’s sales recovery. These velocity trends—slow rebound, medium rebound and fast rebound—can be applied to predict future sales performance. The demand prediction models are based on the expected sales rebound and consumer sentiment in the US, derived from the trends, sentiments, promotions and processes in other countries.

The module is very powerful in adjusting the stores closure data and future weeks forecast after reopening, providing default adjustment values after reopening and monitors the actual performance every week, automatically re-adjusts as needed. It also provides insights on the level of promotion required to rebound sales by category and position within the lifecycle. After the sales rebound to normal levels or when the brand sales achieve a steady state, the module permanently adjusts the sales data during closure to set the stage for accurate long-term forecasting and processes. When dealing with millions, if not billions of dollars’ worth of inventory coupled with the changing consumer lifestyle evolution emerging out of this historic singular event, retailers today need sound and quick scientific advice to get them out of the gate faster than their competitors.

7thonline is a leading provider of cross-channel merchandise planning and assortment management solutions, enabling more effective planning, demand forecasting and inventory optimization for leading retailers and wholesalers. With embedded business intelligence and rich analytics, the company’s solutions offer complete demand visibility and planning capabilities for wholesale, retail and ecommerce. To learn more, email us at info@7thonline.com or book a demo with our team.