The Challenges of Clustering

As the seasons change and the weather starts to warm up, I found myself on the hunt for a new summer outfit – ideally a lightweight blouse paired with a matching skirt. While the merchandise I’m looking to buy isn’t necessarily relevant, the situation I found myself in is.

It’s the kind of situation consumers experience waaay too frequently and, frankly, a large reason why providing a stellar customer experience while improving sell-through is such a challenge for many retailers today. 

The story goes like this: 

I came across THE perfect blouse/skirt on a retailer’s e-commerce page. Sizing is always a potential issue so instead of making an online order, I resort to a brick-and-mortar visit.

As I make my way to this retailer’s store, ready and willing to spend, I ultimately find:

  1. The blouse isn’t available at that particular location
  2. The skirt isn’t available in the size or color I wanted
  3. The sales associate was super unhelpful (irrelevant to the point I’m trying to make – but argh—still worth noting) 

Okay, fine. It happens. How was the retailer to know I was going to waltz into their Newbury location looking for product A and product B?

The thing is, businesses “doing retail right” do know – and plan their assortment accordingly. Successful retailers know when it comes to finalizing their assortment plan for the upcoming season, they must rely on truly localized demand to ensure they stock the right product at the right location (and in this particular instance, in the right color and size).

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Topics: retail clustering, customer choice, customer experience, merchandise planning, assortment optimization, allocation, merchandise buy, customer preference

The Need for Retail Speed and Accuracy in an Ultrafast Fashion World

“Consumers are rabbits in today’s supply chain, and brands, retailers and manufacturers are the too-slow turtles that can’t keep up—despite knowing they need to.” – Spencer Fung, CEO of Li & Fung 

Speed is the name of the game. 

The see-now-want-now mentality isn’t going away anytime soon. While convenience and access continue to drive the consumer desire for immediacy, the gap between customers and retailers expands even more steadily.                       

The number one problem on every top retailer’s mind is this: What can we do to shrink this gap?

“What’s been made very clear in recent years is that the entire supply chain is being disrupted because of consumers’ see-now, want now mentality, because of e-commerce and the convenience it offers, and because of new business models coming from startups that aren’t bogged down by remnants of the old days and ways.” – Sourcing Journal

At the end of the day, leads times cost. The old days of showcasing designs months in advance before delivering to stores are long gone. The speed to market issue is where the problem lies – and slight improvements year over year are not enough at the rate consumers are going today. 

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Topics: inventory optimization, data, convenience, fast fashion, advanced analytics

3 Takeaways from Cowen’s Re-Think Retail: The Store Must Do More

Customers require an easy shopping experience, a focused product assortment, and an experience which connects them to the brand, retailer, or other people. – Cowen Research, Re-Think Retail: The Store Must Do More 

How are you breaking into the new world of retail?

Obviously, times have changed. Consumers have changed. How we do business has changed.

Technology has really changed. 

With all this change going on in our world, it’s inevitable retailers must change too. But how can retailers ensure they’re adapting to survive? To succeed? To thrive? 

In a recent retail manifesto, Cowen and Company gives their two cents on how retailers are “rethinking retail” as profound shifts in customer expectations continue to force traditional retail business models to innovate and change. 

From Cowen’s perspective, it’s all about the store.

Just like the title of the report illustrates, the store must do more to “maximize a customer’s experience” and “minimize tasks” as their purpose has fundamentally shifted. In today’s new world of retail, stores must act as customer acquisition points where convenience, curation, and culture trump all other factors.

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Topics: inventory optimization, data, predictive analytics, convenience, customer experience, in-store assortment, in-store experience

The ROI of Optimization: A Case for the Board

In a retailer’s perfect world, knowledge of what your consumer wants to buy (along with when and where they want to buy) would be instantaneous and inventory lead times would be nonexistent.

A retail utopia.

Unfortunately, this isn’t how it works. Instead, merchants are tasked with predicting enormous (sometimes erroneous) investments to: 

  • Determine the optimal assortment/mix of product to sell
  • Determine the optimal store location to allocate each product
  • Determine the optimal fulfillment path for online orders

As a merchandiser, you’re on a perpetual quest to provide the right product your consumer base demands.

So many variables come into play as you try to accomplish this.

Furthermore, it can be very difficult to make the best merchandising decision when the data required to make future decisions isn’t accessible or, best case, spread out across various systems.

As a result, retail professionals globally are looking to invest in advanced analytics optimization technologies. Whether your organization is searching for ways to buy less inventory or improve fulfillment efficiency for online orders—the case for AI-driven inventory optimization is a no-brainer for many once they gain a clear understanding of its ROI.

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Topics: inventory optimization, advanced analytics, data, predictive analytics, merchandise planning, allocation, fulfillment

Part Four: Q&A with Aéropostale’s SVP of Planning & Allocation (Bonus Questions!)

“Emerging technologies driving disruptive innovation, many yielding transformational benefits, must be prioritized for investigation, even though the ‘buzz’ and expectations for them are just on the rise.” – Gartner, Use Cases Harness Emerging Technologies to Deliver Delightfully Disruptive Customer Experiences 

How are you keeping up with disruption in the industry?

This question resonates with merchants globally—from luxury to fast fashion to off-price—as most are challenged to meet consumer expectations, anticipate future demand, and make the right investments and decisions throughout the merchandising cycle.

Given the circumstances retail is in today, the technology available to help businesses become digitally enabled provider[s] of unified retail commerce is, as Gartner so accurately highlighted, “yielding transformational benefits.”

As an example, retailers are expected to use AI to hone the accuracy and speed of human decision making well beyond current levels by 2020. 

And 2020 is RIGHT around the corner.

As such, we wanted to share some final insights from our recent Q&A with Aéropostale’s SVP of Planning & Allocation, Karen Walter, who shared plenty on how her team is incorporating emerging technologies (like advanced analytics!), as well as:

  • A new approach to the Merchandise, Planning, and Allocation process (Part One)
  • How new technologies are blended with existing business process (Part Two)
  • Why and how Aéropostale adopted analytics in today’s retail environment (Part Three

At the end of the Q&A, we gave retailers a chance to submit their own questions to Karen, which we outlined below! We hope her responses help provide some clarity on any looming questions you may have on Aéropostale's newly AI-enabled merchandising process or strategies you may be considering at the moment.

Also, feel free to access to full webcast Q&A video here for more context! 

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Topics: inventory optimization, advanced analytics, data, predictive analytics, merchandise planning, allocation

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