Assortment planning is one of the biggest challenges in fashion retail and one that can make or break company performance. Determining which products customers will want to buy and estimating the right amounts to order for each location is an immense task that merchandisers have to perform regularly. Order too little of an in-demand item and you’re leaving money on the table. Order too much and you’re not only reducing your profit margins but also wasting materials and polluting the environment when getting rid of them. In fact, nearly 20% of global wastewater is produced by the fashion industry, as much as 12% of fibres are still discarded on the factory floor, and 25% of garments remain unsold according to McKinsey. Those are staggering statistics, but what if there was a way to minimize risks when it comes to assortment planning and instead create an ideal product mix that boosts your profits and reduces waste every time?
What is an assortment mix simulator?
Usually, merchandisers have to work together with designers and vendors to come up with the ideal product mix that will sell. They have to consider past performance, trends, markups, and at times rely on their gut instincts. Intricate and enormous workload has to be performed to accomplish the ultimate goal - create a strong assortment that will keep the brand profitable and customers satisfied. However, some merchandisers struggle to develop this ideal product mix and may require a little help from artificial intelligence and machine learning technologies. It is for those merchandisers that we have developed a matrix simulator platform that creates an optimized assortment mix for the next season at the click of a button.
GFAIVE’s assortment mix simulator lets fashion retailers create an ideal product mix based on past assortment performance, meet KPIs, view forecasts for one year ahead while collections are in the planning stage, and most importantly - it can simulate performance and come up with various scenarios based on the input data you provide. Let’s say this season, you really need to meet your revenue KPIs and you have little margin for error. With our new tool, you can set the KPIs and the algorithms will optimize the suggested product mix to make sure you reach your goal.
What are some of its key features?
Flexible dates - set a period relevant for your assortment planning.
Past collection filter - create an ideal product mix based on your past collections.
Category filter - discover a perfect mix for each category inside your assortment.
Ideal mix - explore the suggested assortment plan, created through a complex AI prediction model developed by our team.
Store and store cluster filter - generate accurate allocation predictions per store and have a better understanding of regional merchandise reach per store cluster.
Handy results - upload the assortment plan to excel spreadsheets.
KPI settings - if needed, optimize suggested product mix by the desired margin, revenue, or model count.
Compare results - study your results and get more insights about your assortment planning.
How hard is it to implement?
We can hear you exclaiming, “this sounds way too complex and I may not have time to integrate such tools into my existing systems!” Well, you don’t have to. GFAIVE’s assortment planning simulator lets you upload your data to the platform via an automated data loader, requiring absolutely no integration. All the work happens on our platform, all you have to do is observe the simulations the platform runs and take note of the recommendations provided to make the best decision for your brand. It really is that simple. We took all the complicated work and placed it on our end, with AI working hard to ease your life as much as possible.
Fashion retailers all across the world are adapting and transforming their operations to minimize overstocks, understocks and taking steps to be truly sustainable. Are you still not convinced that it’s time to jump on the digital transformation train? Don’t take our word for it, instead check out the BOF-McKinsey State of Fashion 2021 Survey and you’ll see that overstocks are a real issue in the fashion world and one that “will only get worse in the future if companies fail to adapt to the consumer’s new mindset. Consumer attitudes are changing in the wake of the pandemic, as many embrace a “less if more” approach that coincides with industry changes in the fashion cycle”. So how are fashion executives responding? The below graph illustrates that revising the assortment structure is one of the top strategies fashion executives plan to employ to avoid future overstocks.
To conclude, fashion business leaders are not leaving assortment planning and overstocks to chance any longer. In 2021 they are actively innovating their supply chains and the processes around creating the perfect product mix that sells. This isn’t the time to wait, it’s to act if you want your brand to stay competitive. The ability to simulate performance and outcomes of assortment mixes will be a game-changer in the fashion space, so the only question that really remains is - what are you waiting for?