Introduction and challenges
Distributors and brands are currently facing structural changes in the market including unified commerce – promoting a customer experience without borders between physical and digital channels, leading to a “one stock” logic, accessible via a multitude of channels (store, web, store to store, web to store, store to web. In addition to this, the focus is now on zero waste, a new sustainable development requirement requiring increasingly precise management of stocks and the end of life process. There are also accelerating sales cycles and intensifying seasonal demand.
To deal with this, companies must set up agile commercial planning processes with an integrated vision: budgets, collection planning, assortment management, merchandising, allocation and restocking, markdown management, inventory and transfer management.
This involves ensuring the proper integration of value management processes (sales and purchasing budgets, margin management) and operational management processes (forecasts, procurement/production, store allocation and restocking, and transfers, etc.). Collection plans and assortments must be defined with an overview of the different distribution channels (physical network, e-commerce, s-commerce) with dynamic links between assortment, merchandising in-store and sales forecasts. Finally, organizations must be agile to manage and deal with variations in demand: short supply cycles, stock projections to identify as soon as possible the risk of shortages or overstock, data science to evaluate sales potential and optimization algorithms for restocking or transfer decisions.
How we can help
Argon & Co supports distributors and brands in improving their merchandise and assortment planning (MAP) process:
- Redesign of merchandise and assortment planning processes for seamless integration to meet the brand’s challenges (turnover, seasonality, sales, and margin)
- Implementation of best practice in terms of organizational design: organization by category, governance and RACI between functions (finance, marketing, merchandising, collection, supply chain, and commerce), between central and local, and between distribution channels
- Assistance in the choice and implementation of appropriate tools (multi-dimensional or vertical planning tools on a particular component)
- Simulation and modeling under linear capacity constraints of the impact of the assortment and/or merchandising choices on sales
- Use of data science to help to optimize assortment choices or sales forecasts (calculation of initial sales potential, short loop forecasting after testing or first days of sale)