Part One: Q&A with Aéropostale’s SVP of Planning & Allocation

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"The customer is dictating the way they want to shop and what their new level of service is—we just all need to catch up to them.” Karen Walter, SVP of Planning & Allocation at Aéropostale tweet-image

Retailers have more data than ever before.

However, introducing new technology to leverage data more effectively throughout the merchandising process is a daunting—yet critical task.

In our latest webcast, we had the opportunity to sit down with Aéropostale’s SVP of Planning and AllocationKaren Walter, who shed some light on:

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

Check out the the first part of the Q&A transcript below, where Karen shares her experience and thoughts on how the Planning & Allocation side of the business (and retail overall!) has evolved, as well as some of her biggest influencers throughout her career.

You can (of course) access the full video interview here

Q: What’s your background and have you always been in retail?

I’ve always been in retail. 

After graduating from school, I started out at Gap Inc. working for their management program in stores. Then I was recruited to go into allocation, where I started working for Gap, Inc.’s Planning & Allocation team across all of their brands.

Following this, I moved back to New York from San Francisco to work for J.Crew, where I headed up the Planning & Allocation for crewcuts during its infancy stages. The role consisted of planning & allocation, but it also included strategy, store operations, real estate – everything across the board. 

We were like a little startup in a much bigger company with a lot of shared resources, so you had to make sure everyone understood why crewcuts, as a new business, was a priority. There was tons of learning and growth there. 

By this point, I really didn’t have much e-commerce experience—at least not directly. 

I moved to Ann Taylor and became the head of planning for the Ann Taylor and Loft brand for e-commerce. This was a tremendous learning experience for me, as e-commerce took a different approach to planning. Following this, I moved onto the Loft brand side and took over stores as well.

Finally, I left Ann Taylor to come to Aéropostale which has been a really extraordinary experience.

I’ve been here for about three and a half years and joined when the company was not very financially strong. The stock price was very, very low and I knew change was necessary.

That’s why they were hiring people into certain roles—because things needed to change or else the company wasn’t going to survive. We ended up going into bankruptcy, then (thankfully!) were bought out of bankruptcy.

Now we’re in a really unique situation in the U.S: we’re owned by a brand licensing company, as well as two mall owners.

It’s been a really fantastic relationship and has obviously benefitted Aéropostale as we are now one-year post-bankruptcy. Today we’re looking at what the next opportunities are and how we can continue to move forward. Our investment in Celect is a big step in that direction.

We’re kind of evolving as a same culture, same brand, but new company. 

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Q: It seems really interesting being owned by such a diverse set of minds—with those in the mall business having a stake in Aéro. I’m sure that’s causing you and your team to have different views on things or different outlooks on various types of problems? 

 Yeah, it’s been really fascinating. They would say the same thing.

Even though they are in the business of filling their malls with retailers, they really aren’t experts in “retailing.” They’re real estate experts. Yes, they lease their space to retailers, but there isn’t a lot of communication after that. Once the lease is signed, the two industries really don’t intersect.

We’ve been teaching them quite a bit about the business of retail, and they’ve been teaching us an extraordinary amount about their malls and customers. The assumption, I think on both sides, was we both knew a lot more about what each other did. 

Q: Who was one of your biggest influencers as you moved through your career? 

I’ve been so fortunate to work for amazing companies and amazing brands, surrounded by the best of the best. There are two people that stand out. 

One is probably not surprising given my background, and the other most people wouldn’t know.

Certainly, a major influencer throughout my career has been Mickey Drexler

He was the guy from afar when I first started out. By the time I got to J.Crew, we worked a little more closely together. The lessons of retail I learned from him have been with me throughout my career. They will continue to be with me and I will continue to pass those lessons on to everybody I work with. 

Most importantly, with respect to this conversation, I learned to understand the mix between “gut expertise” and hard facts.

How to lean on the facts, how to lean on the gut, how to mix the two, where to use one versus the other, or both. The way you choose to use those two things in conjunction can mean huge success—but it can also develop into major risks.

Drexler taught the lessons of retail every day, and you could watch him blend those two sides or approaches to the business. It was extraordinary. I was very, very fortunate to work with him and for him for as long as I did.

The second biggest influencer was my director when I first joined the allocation team in San Francisco (at Gap in 1997).

When I first got into allocation, I didn’t know much about retail. I didn’t even know the job existed! However, my director at the time taught me how to analyze the business. 

She literally sat down with me and explained how it worked—how to look at a problem, an opportunity, and break it down into pieces. She explained how you need to find data to support your hypothesis. Then you need to be able to convince others your point of view is based on analytics and data, using it as a way to influence others.

Just breaking it down into those steps, truly teaching me the concept and how to see it through—I’ve used this as a framework throughout my career.

There are shining examples where she still pops into my head, and I still use the same technique with people on my team now.

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Q: During the last 15 years in the industry, have you seen anything like what retail has been going through lately? 

Retail has always been a dynamic industry, and that’s why I think it’s so exciting. 

The pace of change over the last three or four years certainly feels different than the pace of change the time before that. 

Retail is always evolving, it’s always changing, but things have been changing very, very rapidly recently.

Especially when we consider the way the customer is now influencing how things get done –what they want and when they want it—and how much the technology evolved.

We now have access to ten times more types of data than we ever had before. In addition, the evolution of the mall and the e-commerce business is also causing retail to evolve rapidly as well.

Q: Can you breakdown the changes you have seen in the Planning & Allocation end of the business?

When I first started out in Planning & Allocation, it was in a financial position. The analytical expectations – the recommendations that were expected from the group—were nowhere near what they are today.

One of the biggest changes I’ve seen is when we went through a period, probably in the early 2000s (maybe 2005), where it was almost as if we were trying to make Planning & Allocation a “true science.”

The desired candidate pool was coming from engineering and science backgrounds. We were really trying to pull it apart—the gut piece. It seemed as if we were trying to make it only about facts, data, and analytics. We wanted statisticians and scientists to be in the role for a couple of years then.

I feel like, as an industry, we’ve moved past that.

My experience with Planning & Allocation moved through that.

While it is still a role where a set of diverse backgrounds can be very, very successful, it’s come back to a place where Planning & Allocation needs to be more than just financially and analytically-based. 

There is a piece of the art of knowing and understanding what you’re planning and what you’re allocating that is still a critical piece of being successful in the area.

Now we do have people who are oriented toward analytics, statistics and financial metrics, but also love the industry because of what we sell. They like the product they’re working with. I believe this fits very nicely into where the technology is at the moment. 

The technology, especially Celect, is not trying to replace gut, intuition, trend, or go-forward knowledge with data. They’re trying to blend the two. 

Having people who are oriented that way, combined with the technology available fits in the same vein. It’s a very happy marriage right now.

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Stay tuned for part two of the Q&A, where we'll dig deeper into the actual process Karen took to adopt a advanced analytics at Aéropostale. 

*P.S. Don't forget you can always access the full on-demand webcast replay here

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

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