CHICAGO — In a push to create the best merchandise mix on a store-by-store basis, Belk is expanding its use of Web-based assortment-planning software beyond women’s apparel to nearly every other product category.
New assortment-planning processes and systems will be fully rolled out in October, according to Bill Keith, vice president of merchandise support at Belk, the privately owned Charlotte, N.C., department store chain. He said the assortment-planning system, Belk’s fourth iteration in 15 years, provides for greater collaboration opportunities, both internally and externally, with trading partners.
Belk, which operates about 275 stores, has annual sales of $2.97 billion.
Assortment planning is a challenging task for all retailers because the ideal mix of product styles, colors and sizes for a particular store is greatly influenced by that location’s unique attributes, such as size, customer demographics and proximity to a beach. Belk’s stores range in size from 40,000 to 260,000 square feet.
“This is my fourth time and hopefully my last time implementing assortment planning at Belk,” said Keith, a 28-year veteran of the company. He outlined Belk’s vision for improved assortment planning and collaboration during the Retail Systems conference here last week. He said the new system would be used across all product categories with the possible exception of cosmetics.
Belk’s previous attempts at refining the assortment-planning process were based on technologies available at the time — Excel spreadsheets — that have built-in limitations. Managing great volumes of data via spreadsheets is time-consuming and error-prone, and results in assortment plans being developed in a “silo environment” — disconnected from corporate strategic objectives, he said. “There was no visibility across the organization.”
Because Belk’s new assortment-planning software, from 7thOnline, New York, is Web-based, its merchandising group, the planning organization and the allocation team can easily access the same information and work together more cohesively, Keith said. The assortment plan also can be reconciled with Belk’s merchandise financial plans, which are developed using Arthur Planning software from JDA Software Group, Scottsdale, Ariz.
The 7thOnline assortment-planning tool supports electronic exchange of sketches and product images so everyone has a visual reference of various styles.
Keith said the ability to view images premarket, on a laptop computer during market and post-market is especially helpful to buyers.
The software also can be used to share financial targets with select trading partners, who then can develop better store-level product assortment recommendations for Belk — accompanied by product images. Buyers then can review the suggestions and adjust assortment plans as needed. Keith said this communication can be happening in the weeks leading up to market, before buyers ever see actual merchandise in vendor showrooms.
Belk currently uses the software in this way to collaborate on assortment planning with Liz Claiborne, Jones Apparel and Kellwood, for women’s apparel only.
By getting the financial components of planning in place before market, Belk and its vendors can anticipate and react to developments during market that ultimately would affect stores’ merchandise assortments. Keith gave a hypothetical example: If Belk buyers planned on buying a particular style, and the vendor already knew none of its other retail customers were buying that same style, the vendor might choose not to manufacture it. “So we can adjust [for that] while we are in market rather than wait three or four weeks later,” said Keith.
With streamlined communications internally and externally, along with better reporting and analytics, Belk will have a better grasp of which stockkeeping units are performing well and which are not meeting profit goals.
“Our number-one objective with assortment planning is sku reduction,” Keith said. “We have a lot of sku’s out there that are not as productive as they could be.”