Localizing assortment in fashion retail

CNBC reported today that Macy's recent outstanding results can be attributed to its local approach to customizing its assortment and its size mix (click here).

Chief Executive Officer Terry Lundgren attributed the results to better margins, disciplined inventory management and Macy's program to allow stores greater leeway in catering to local tastes. These factors also prepared the company to woo shoppers despite the threat of a new dip in consumer spending.

Although the department store chain has centralized its buying, planning and marketing operations, it also has local managers on the ground who examine sales data and travel to a specific handful of stores to study customer buying at those locations. Based on their work, individual Macy's stores may decide to stock more of a particular dress size in a particular style, for example.

Other store chains make similar inventory moves, but without the granularity of Macy's approach. For example, a store may ship more of a specific size for a whole range of clothing to a store. That may be all it takes to make more apparel sell at a full price rather than linger on the rack and be marked down.

Kudos to Macy's.

Based on our work for several US women's apparel retailers, I can tell you that assortment localization can be achieved through good analytics. Retailers don't need many local managers to observe the shelves to achieve localization.

The key aspects of analytics for assortment localization include:

• Collating the transactional sales data (gross sales ($,units) , net sales ($, units), cost ($)) at a weekly level across stores for the past few quarters -- typically hundreds of millions of rows
• Adjusting the sales data for stock-outs and negative margin sales (to get a true picture of demand for each style at a store level
• Rolling up the sales data to the desired level of product hierarchy (Department/category/class/section/end-use/Color/Size/etc)
  
• Using the rolled-up adjusted sales data across stores to decide assortment and allocation for the future.

Drop me a mail at raj@knowledgefoundry.net if you want more details.

... phone?... tablet PC?... No it's a Dell Streak Part 2

I have commented earlier on Dell's mobile device strategy (click here) and on the Dell Streak (click here).

Today Walt Mossberg reviewed the Dell Streak (click here) in the Wall Street Journal. Some salient points:

• I couldn’t find, and Dell couldn’t identify, any apps written especially for its larger screen. In fact, a few Android apps I tested seemed to crowd all their icons into just a portion of the Streak’s screen, especially when the device was held vertically, leaving lots of white space.

• It’s much lighter than the iPad, at just under half a pound, but heavier than many smartphones. In my tests, I found I could carry the Streak comfortably in the pocket of loose jeans, or in a suit jacket’s inner pocket, but not in a shirt pocket or the pocket of more fitted pants. It would take up a lot of room in a small or medium-size woman’s handbag. And it looks somewhat ridiculous when held up to the ear to make a phone call.

• When held horizontally, the screen felt luxurious, with lots of room, and good sharpness and color, for playing video or viewing photos. Even in portrait mode, reading books using the Amazon Kindle app was a much better experience than on any smartphone I’ve tested, though not nearly as good as on the iPad or Kindle e-reader.

• Its 5-megapixel rear camera took sharp photos and fair videos, and phone calls sounded clear. The large screen was a big plus for Google’s free voice-prompted navigation app. Battery life was very good, easily lasting a full day, and the battery is removable.

• But the Streak also crashed on me several times. On one occasion, it started vibrating endlessly, only stopping when I removed and replaced the battery.

• The device has a front-facing camera—unlike the iPad, which has no camera at all. But video calling isn’t integrated, unlike on the new iPhone, and requires you to sign up for a third-party service.

• Twice the device proclaimed it couldn’t find the memory card and had to be restarted before it could. Twice, the YouTube app failed to load any content.

• Also, the buttons on the top edge for turning the Streak on and off and for taking pictures are very close together and easily confused for each other. And the camera button eventually stopped working for me altogether. The speaker, located on the back, sounded tinny when playing music. And it was too easy to block the rear camera with a thumb or finger when holding the Streak naturally.

• Dell sees the Streak as a tablet first, with phone calling as a secondary function. It may well appeal to people for whom the iPad is too large to carry around, yet want some of the tablet experience coupled with a phone. But tweener devices can be hard to love and Streak buyers will have to overlook some of the shortcomings I encountered.

No one says it better than Walt.