Apparel collection allocation and markdown planning system
The Product Manager analyzes sales of models, sizes and colors in different locations. The stock can be re-distributed or discounted based on the margin and the rest of the season.
The allocation of the collection does not estimate the demand for a specific size, the rest of the season and stock in other places.
How the solution works
- Sales and balances are compared by model, size and store
- Remaining season and relocation costs limit possible actions
- The category manager selects a redistribution or price correction
- Stocks sold and margin maintained after the action
Key challenges
- Collection stocks are too slowly redistributed based on actual demand
Solution capabilities
Monitoring the sales rate
Models and variants are rated based on the part sold, the rest of the season, and the demand for the location.
Stock Imbalances
The system distinguishes where a specific variant is missing and where it accumulates without sufficient demand.
Depreciation scenarios
The valuation is based on the remaining stock, margin and time until the end of the season.
Recommended Action
The team gets a prioritized list of where to redistribute, where not to change anything and where to start the downsizing.
Business context
- Collection stocks are too slowly redistributed based on actual demand
- The allocation of the collection does not estimate the demand for a specific size, the rest of the season and stock in other places.
- In-demand options for the collection are offered at the right place
- Its size and color are important to the buyer, so the overall balance of the collection can be misleading. Analysis of the rate of sale allows for reassignment of options where they are sought. The pricing decision can be made based on the rest of the season and margin, instead of waiting for the offer to become obsolete.
Core features
- Monitoring the sales rate
- Stock Imbalances
- Depreciation scenarios
- Recommended Action
Key integrations
- ERP and the stock system
- stock, Cost, Commodity Movements and Season Structure.
- Cash register system (POS) and e-commerce
- Sales by option, location and channel.
- Price and stock system
- Current prices, history of depreciations and transmission of approved changes.
- Product Information System
- Attributes of model, color, size and collection.
Potential impact (%)
The ranges indicate an illustrative relative change in the metric under the stated assumptions. Results depend on the starting position and actual use of the solution. Percentages for different metrics must not be added together.
Share of sales with significant end-of-season depreciation
2–12%Decreasing
This illustrative scenario assumes that 10-30% of the metric is attributable to addressable planning and execution shortcomings. That share is assumed to fall by 20-40%. Company data is needed to verify both the addressable share and the resulting change.
The proportion of sales that is realized above the company's fixed threshold for deep depreciation, according to similar collections. The percentage is calculated on the number of units sold by all selected collection.
Share of variants with excess in one location and deficiency in another
3–16%Decreasing
This illustrative scenario assumes that 15-40% of the capacity metric is affected by allocation and preparation. That share is assumed to fall by 20-40%. Company data is needed to verify both the addressable share and the resulting change.
Variants are regularly counted, with one location exceeding the surplus limit and the other having a shortage or unfulfilled demand at the same time. The percentage is calculated on the number of all variants of the range checked.
Conditional calculation scenarios. The assumptions have not been validated against client measurements.
When this solution is relevant
- Seasonal Collections and a Short Full Price Sale Window
- Many shops or regional warehouses
- Regular transfers and downsizings of intermediate collections
- There are enough sales and stock history at SKU and location level
Implementation requirements
Size balances, sales rate and season terms are prepared for the planning of collections. Transfer and depreciation rules are assessed along with logistics costs and actual subsequent sales.
Further development options
- Other collections size proportion planning
- Comparison of depreciation time and residual margin