Intelligent Retailing: How To Optimize Your Stock At The Shop Level

Marcel de Bruin

When you think of intelligent retail, all kinds of smart solutions come to mind. Humanoid robots that interact with customers are a great example, as are digital humans like Amazon’s Sumerian Hosts, cashless vending, digital signage that informs people about products and discounts, and interactive mirrors in fitting rooms. However, delivering an unrivaled customer experience is not just a matter of enhancing your shop floor; it starts with making smarter choices in your business processes. The foundation of those decisions? It should be fueled by data intelligence.

The right item in the right size

The fashion retail industry is going through a rough patch. The digital age has put the consumer on top (and rightly so), and e-commerce is a fierce competitor to physical stores. To distinguish yourself in the high street, your focus should be on your customer and delivering the right item, in the right store, at the right moment, and – even more important – in the right size, even during a typical retail season when collections change every eight weeks. These days, an item just can’t be out of stock. This involves a lot of effort from label managers and business controllers. They need all the data intelligence they can get to make an accurate forecast and supply each individual store with the most fitting assortment and stock.

Managing customer demands with smart redistribution

Fulfilling this ambition, in which customers always find the item they want in the right size in your store, begins by making your business processes smarter. That’s exactly the challenge The Sting, with more than 100 stores in The Netherlands, Germany, and Belgium, tries to tackle. The Dutch fashion retailer teamed up with the experts of the Mobile Innovation Lab to come up with a smart solution that helps business controllers cope with inventory redistribution and replenishment. In just five days, the team delivered a prototype of the In-Season Stock Redistribution Tool, which supports controllers in the redistribution of inventory among stores in season. This is a process that used to be complicated, with a lot of transactions, and – most of all – time-consuming. 

Inventory redistribution made easy with a user-friendly workflow

Of course, based on historical data, knowledge of different stores, experience, and good old fingerspitzengefühl, label managers can already give an accurate prediction of which items will sell best at specific stores. It’s a challenging task, considering the fact that a seasonal collection at The Sting (for example) consists of more than 20,000 items. Unfortunately, nothing fluctuates more than fashion trends, and with the short lifecycle of clothing, inventory redistribution in season is almost inevitable. That’s where the business controllers come in. They try to match stocks on the shop level to the customer’s demand to minimize lost sales and prevent items needing to be marked down.

With the user-friendly digital workflow of the redistribution prototype, controllers can make smarter and faster decisions. In the application, historical sales data are collected and processed with advanced analytics, and a proposal for redistribution is made to the business controller. When she opens the application, the controller sees the top 10 best-selling fashion items. When she clicks on a piece, she can view exactly which stores are lacking items and which stores have a surplus. With just one click, the controller can redistribute the items to the stores where they are top sellers. This is a world away from collecting and analyzing all this data manually in Excel.

Maximize sales with optimal redistribution

The first test runs of the prototype are promising. But it’s not just the speed that a redistribution can be made that had The Sting jumping for joy.

What Bart Overbeek, IT director at The Sting, valued most, is that the tool contributes to a bigger digital picture of the company. “The In-Season Stock Redistribution Tool works through all layers of The Sting. The redistribution proposal that the controller makes gets forwarded to the regional manager and, if approved, sent directly to the hand-held scanner as a picking order for employees in a specific store. It’s an effective end-to-end solution and a very user-friendly process,” he says.

The prototype redistribution tool has shown The Sting the possibilities of incorporating data intelligence into its business processes. The biggest gains? “The solution will save us a tremendous amount of time. Data analysis becomes an automated process that gives our business controllers breathing space to optimize our operation,” explains Overbeek. The second advantage is the option to redistribute individual sizes of popular pieces to complete a size range in a certain store. Overbeek says, “previously, we looked at the number of items, and not necessarily at the available sizes. With this feature, our redistribution process gets even smarter.”

All in all, the prototype of the tool promises to not only maximize sales by making an optimal inventory redistribution throughout stores across the nation, but it also helps to get down to the core of customer satisfaction: happy consumers that leave the store with the items they love.

Watch our video to learn more about the In-Season Stock Redistribution Tool.

Marcel de Bruin

About Marcel de Bruin

An experienced SAP Data Platform Architect with a demonstrated history of working in the computer software industry, Marcel de Bruin focuses on how data can make business processes more intelligent.