By Aimee Chanthadavong

Global supply chain management company JDA Software has launched an allocation campaign for Australia and New Zealand to show retail businesses how proper merchandising can help them boost profits.

David Bray, vice president, retail industry APAC, JDA Software told RetailBiz the art of merchandise allocation demands that retailers transform key consumer insights into the right mix of products at each store.

“Our experience with our retail customers around the world demonstrated that the allocation process is a very important step for retailers with seasonal merchandise to be able to optimise and provides a fast ROI with low risk. In assessing the local regional market we believed there was untapped potential for improvement in this important last step in managing inventory,” he said.

Understanding consumer preference is one critical part to driving an optimal merchandise allocation strategy, Bray said. “Most retailers start this process through developing assortments across their stores and channels based upon consumer insight. The final key step is to then fine tune this merchandise allocation based upon recent changes and trends.”

Understanding the three R’s or retail – right product, right place and right time – are also crucial.

“Too much of the wrong stock to the wrong stores means costly markdowns or transfers, too little stock to the wrong stores means lost sales and decrease in customer satisfaction/loyalty,” Bray said.

JDA Software recently assisted international brand Guess? grow its comparative in-store sales by 10 per cent. With the integration of the JDA Merchandise Management System (MMS) solution, JDA was able to separate the retail group’s inventory from the wholsale group’s inventory.

“By consolidating retail’s inventory into JDA’s solutions, the buyers’ workload was cut in half. They now have complete visibility into their inventory ownership and also have the analytics to more successfully manage and allocate merchandise rather than sifting through data in various applications,” Michael Relich, chief information officer at Guess?, said.

JDA’s solutions have also provided a foundation to support Guess?’s retail growth. When the retailer introduced its more upscale, contemporary Marciano line, positive customer response prompted the company to launch its Marciano retail chain. Additionally, Guess? Seized the opportunity to sell more of its highmargin accessories by launching its Guess? Accessories chain.

“Retail is all about planning. If you get the planning right and make sure you get the right products in the right quantities at the right time, you’re going to be successful. As we’ve gotten more sophisticated in our retail operations and opened more doors, planning has been key to our profitability and success. JDA provides a powerful integrated planning platform for the precise execution of our weekly sales and inventory plans,” Relich said.