Inventory planning, particularly in the months since the COVID-19 pandemic began, has been one of the top challenges for all apparel retailers. These merchants have to constantly balance between possibly having too much product in their supply chain or having too little of it, which can lead to disappointing customer experiences or eroding margins.
But in today’s world, data-driven assortment planning is the only way to keep up with the rapid changes that occur throughout the supply chain. Global athletic brand New Balance is one company recognizing the need for this change, deploying the emerging AI-powered fashion trend forecasting and demand sensing technology Stylumia to better position its inventory to the right consumer, through the right channel and at the right price.
“Most importantly, from a value chain perspective…how do you position your materials and how do you position your factories, so that they can accommodate those reactive needs?” said Ravi Shankavaram, vice president of IT global for New Balance.
Ganesh Subramanian, the founder and CEO of Stylumia, says that customers don’t like as many as two-thirds of products that are pushed out to them, making it imperative to gather and rank customer data on a global scale across various geographies, from luxury to value.
“What is key to win consumers in the time to come is product, product and product,” Subramanian said. “Can we ensure that we take the right merchandise decision for all our target consumers? The focus should be on product and that’s an easier one to start with, then as brands move forward, they should start working on their demand prediction solutions. Get the ‘What?’ right first, then get the ‘How much?’ right.”
Watch the discussion with Subramanian, Shankavaram and Caletha Crawford, publisher of Sourcing Journal, to discover:
- The benefits of data-driven merchandising
- How New Balance’s direct-to-consumer business approach helped optimize merchandising
- Why Stylumia takes apparel forecasting from a “bottom-up demand science approach” instead of traditional “plan, design, push to customer”
- Why reactive manufacturing is going to become a big part of the New Balance equation