BUSINESS PROCESS SOLUTIONS

Merchandise and Assortment

Planning
Maximised ROI for every product
brought to market

Creating superior margins and a greater consumer in-store experience

Today’s apparel manufacturers and
fashion retailers face an unprecedented
challenge to build sustainable growth
and long term profitability.
Increased competition, growing supply
costs, product proliferation, changing
consumer priorities as well as the
opening of new channels and retail
formats are all generating new levels
of complexity for the sector.
These challenges mean that building
competitive advantage has become
increasingly difficult, for example:
t
There is an increasing pressure to get
collections to market faster against
producing the right products, at the
right cost and in line with overall
company objectives. In order to be
successful, collections need the right
processes and structure behind them
to ensure costs and margin targets are
being met.
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At the store level it is critical to
manage SKU proliferation and high
inventory levels against stock outs and
poor shopper experiences as a result of
empty shelves. In order to be successful
in retail, shelf space must be optimised
to maximise its sales potential, ensuring
an adequate stock turn across all stores
and their individual departments.
t
The importance of understanding
consumer demand and being able to
localise assortments has never been
higher; extended and multi-channel
sales networks have resulted in
completely different consumer profiles
and demand preferences to manage.
Merchandise and Assortment Planning
are two closely linked processes that
can help overcome these challenges
resulting in improved sell-through of
products, higher margins and ultimately
an enhanced bottom line.


  

Merchandise Planning has become a vital process PRODUCT MARKET
STRATEGIC PLAN
for businesses looking to increase their profitability. DIMENSION DIMENSION
TREND Company GROWTH
With so many fixed costs and a lot of upfront investment, Target
companies are using Merchandise Planning to target
margins and product mix – accurate management MERCHANDISE PLAN STORE/CHANNEL PLANNING
& COLLECTION BRIEFING
of these can make the difference between a profit
Category Store Growth
or a loss. More specifically, by creating an effective Forecast Margin Plan guidelines
Merchandise Plan companies can find the optimal
balance between sales and inventory – maximising Consensus, RECONCILIATION
sales opportunities and minimising losses from WSSI & OTB

excessive mark downs and out of stocks.

STORE CLUSTERING

Assortment
Strategy
In order to succeed the process must provide clear Assortment
VISUAL STORE PLANNING

Plan ASSORTMENT
structure and collaboration across multiple functions: PLANNING
Coordinate different departments/perspectives (financial/ Item
Planning
product/channel) so that all functions are all on the


PDM

same page and working towards the same company 

objectives.

Merchandise Planning has also become a vital IN SEASON
aspect of successful Product Lifecycle Management Re-Forcast Replenishment MANAGEMENT
(PLM); helping to identify which product categories/ Markdown
collections need to be developed in relation to the Planning
targets set through budgeting and the analysis of best Merchandise Planning is a key part to any product or collections success,
performing products and attributes. it creates the strategy that the Assortment Plan must adhere to
MERCHANDISE AND ASSORTMENT PLANNING
Maximised ROI for every product brought to market

Specifically Merchandise Planning involves: the required stock levels for both the distribution centers and
stores.


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Review the company 1 – 2 year Strategic/Financial Plan .
(

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Establish the critical success factors to meet sales, margins assortments in every department
and inventory targets
Assortment Planning is essential for retailers as it translates
the Merchandise Planning process into the most profitable
mix of products in every channel and store; enabling customer
preferences and needs to be identified and targeted.
It is a very detailed process that allows companies to go down
to a product line or SKU level; establishing which specific
product lines will be placed into each store by season with
respect to financial objectives and space constraints.
Similar to Merchandise Planning, Assortment Planning is also
a key component to successful PLM; all across the collection
lifecycle PDM can be fed with new assortment strategies & vice
versa.

Specifically Assortment Planning involves:

Analyse data with a variety of tools including: dashboards,

.
(
/
performance maps and composition trees for informed decision t
Create the Assortment Strategy based on the guidelines from
making and optimised planning
the Merchandise Planning process

01 t
Establish the optimal mix of styles and colours for each
category/set of attributes – this is then fed into product
t
Define targets and tactical actions required at a store level by
development for the new season
season to support the Strategic Plan
t
Develop a Sales Plan – take into account: sales growth, the
distribution impact for each season, the impact of new stores,
Assortment Plan
closures and re-fits – reconcile with the Strategic Plan t
Define how to allocate the options created in the PDM
system to the stores
Category Plan t
Determine the breadth and depth of the product assortment
t
Conduct a Sales Analysis to measure the profitability of the t
Analyse the value to buy coming from the Assortment Plan
previous seasons/collections with the value coming from the Merchandise Plan at any level
and correct the gaps
t
Create a Category Level Margin Plan defined according to the
guide lines coming from the Strategic Plan, Store Sales Plan
and the Historical Sales Analysis
t
Top-down and bottom-up planning – reconcile each category
/collection against the input from individual merchandisers
and target margins via gap analysis
t
This becomes the basis for the Category Sales and Buying
Plans

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Reconcile the Store Channel Financial Plan with the Category
Financial Plan
t
Create a WSSI Plan (Weekly Sales, Stock and Intake) that
moves the Sales Plan down to a weekly level – establish a
timed vision of the planned product intake
t
Calculate the Open-to-Buy Plan – ensure an even allocation What-if simulation capabilities; evaluate
alu
luat
ate
te up ttoo 5 different
diff
differ
ff eren
erentt sc
en scen
scenarios
enar
en ariio
ar ios
ios
of products for each period based on projected sales against in parallel
 BUSINESS PROCESS SOLUTIONS

Item Planning Explore the functionality

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Create product profiles showing the volume needed for
each SKU at store level % 
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Use weekly profiles for products that are replenished usability
in-season The TXTPERFORM2008 planning client IS Microsoft Excel.
All product & store information is available at a glance; any
Initial Allocation decisions are immediately reflected on the TXPERFORM2008
analytics dashboards.
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Define the initial quantity to send to stores for each option
depending on the flow
) 
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+,*
Store performance is analysed in season in order to manage Supports complex workflow design (any number of steps,
the allocation, replenishment, markdown and OTB processes sequential, parallel, loops, nested workflows). Improves
in the most profitable way. communication and speeds up process execution in global
organisations.
!""#$ Native multi-dimensional attribute-based
Merchandise and Assortment planning
Planning Store clustering with variables such as sales velocity, store size
TXTPERFORM2008 provides the ideal Merchandise and and consumer behaviour; plan with an unlimited number of
Assortment planning solution through its’ seamless attributes with the flexibility to add new ones at any time, in
integration of all processes, from Strategic Planning to accordance to changing demand and evolving priorities.
creating the Assortment Plan and all the way through to the Analysis by attributes for products and stores; identify “like
Allocation process. performing” stores for faster decision making.

Live integration between Planning and

Performance Management
CDMi Easier root-cause analysis (embedded strategy maps) for faster
Collaborative Demand
Management & intelligence problem solving and correction of the plan; see the effect of
----------------------------------
Demand Forecasting decisions taken on operational and financial KPIs. Improve
Sales Budgeting
Promotion Planning in-season planning through an efficient Open-to-Buy process.
Assortment Planning TXTPLAN
PDMi Replenishment Supply Chain
Product Data Planning Planning
Management & ------------------------------
intelligence Production Planning
--------------------------------- Procurement Planning
Intelligence
Point to note
PDM Inventory Optimization
Distribution Planning
Collection Development
Co-design & Collaboration & Optimized Advanced
Workflow
TXTPERFORM2008
Replenishment Planning

TXTCHAIN TXTMAKE
Supplier Relationship Manufacturing Based on Microsoft technology
Planning & Scheduling
Management
---------------------------- ------------------------------ all modules are unified on a single
Sourcing & Negotiation Order Management
Order Management Operations Planning & platform and combine Demand &
Logistics & Progress Control Scheduling
Event Monitoring MES Supply Chain Management with
Performance Management
to support not only Merchandise
and Assortment Planning but also
an end-to-end PLM process.
TXTPERFORM2008 supports planners and buyers in every phase
of Merchandise and Assortment Planning in order to bring the most Planners and buyers can now

 

drill down from the overall
It assigns the right targets in terms of margins, price ranges,
categories to push and attribute mix to hit the company’s
Strategic Plan into the Merchandise
strategic objectives. Plan with complete control and visibility
through strong OTB and WSSI
TXTPERFORM2008 is built with a Microsoft Excel user capabilities; this becomes the foundation
interface for ease of use; enabling quick adoption for all for an optimised Assortment Plan that
planners and buyers making spreadsheets a thing of the past. positively impacts the bottom line.
Real time what-if analysis to explore new Merchandise and Assortment
business scenarios 
 

A high level of flexibility with the ability to link what-if to
Optimised Merchandise and Assortment Planning is providing
attribute values to support more advanced analysis.
our apparel and fashion customers with significant business
benefits including: Lower inventories and increased margins,
Identify new opportunities around changes in product mix,
sales & stock turns; at the same time it helps improve
potential cost reductions and effects on the bottom line.
productivity and communications, not just for planners, but
for the entire business.
Highlight and analyse different scenarios in terms of financial
KPIs for greater decision making capabilities; create multiple
All of this allows the retailer to provide a more consistent
scenarios using powerful forecasting algorithms.
product offering and shopping experience to the consumer.

Tight integration of assortment with
correlated processes for one version of the
truth
Reconcile plans at different steps of the Merchandise and
Assortment Planning process.
Top-down and bottom-up planning, from clusters

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to stores, from categories to items, and vice versa –
plan and re-consolidate plans automatically.



One common analytical environment across processes; rapidly
understand the impact of any decision on plans.
AMR Research finds that by getting your assortment right
there are some real tangible business benefits to be had:
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Merchandise and Assortment Planning as

part of an extended PLM Source: Increasing Localisation: Adopting a Comprehensive
Assortment Planning will drive product development Assortment Management Strategy for GMA Retailers” by AMR
(collection definition). Research, 2008.

Point to note
WHY TXT?

Over 20 years experience in

providing best-in-class SCM solutions;
TXT e-solutions now accounts
for over 240 fashion and retail customers
worldwide, among which:

Champion Europe, Dolce & Gabbana,

Gucci Group, Hugo Boss,
Louis Vuitton Malletier, Lotto Sport,
Planners can associate an image with its respective style code Marc Jacobs, Russell Corporation,
within their plan; enabling a unique insight helping them to intuitively The North Face (VF Services), VF Europe Bvba,
identify the best combination of products and attributes to drive
sales Loewe, Auchan, Desigual,
Nicolas, Groupe Zannier, Monoprix,
A properly structured and communicated Assortment Valentino Fashion Group
COD. 10700 UK 120410

Strategy optimises product development; able to check on

adherence with season and strategic goals.
Planners can visually navigate from product picture to real
time figures.

Milan - Rome - Paris - Halle - Barcelona - London - New York | www.txtgroup.com/scm/uk | marketing@txtgroup.com |