ProfitLogic fills gap in retail planning software with unique next-generation merchandise optimization solution for assortment execution

Assortment Execution Picks Up Where Traditional Merchandise Planning Stops and Helps Merchants Optimally Drive Assortment Strategy to the Store

BOSTON, MA, Jan. 4, 2005 -- ProfitLogic, the industry-leading provider of Merchandise Optimization solutions, today announced the availability of Assortment Execution, a software solution that fills a gap in the market for decision support around execution of the assortment strategy. Assortment Execution does the computationally intensive work required to optimally match inventory investment and flow to demand by store over time. This solution is designed for planners and allocators who need to better tailor assortments to local demand, flow and allocate merchandise to stores, and manage the lifecycle of merchandise in line with the financial plan and merchandising objectives.

ProfitLogic has spent significant time with forward thinking retailers both in North America and Europe validating and developing a solution that truly reflects the scale and complexity of the 21st century assortment process. Assortment Execution picks up where traditional retail planning software stops and assists merchants with key decisions that surround an assortment strategy after buyers have selected the styles and determined the ideal "shopping list." These decisions, which span both pre-season planning and in-season tracking include:

* How to tailor the assortment for each unique store group?
* What is the optimal buy-quantity for each item?
* What is the optimal way to flow inventory to the DCs and stores during the season by week?
* What is the optimal way to order by size and pre-pack to meet store demand?
* What is the optimal amount to allocate to each store at the beginning of the season and how much should be reallocated in-season?
* How does actual performance compare to plan? What are the over- or under-performing items and what action to take to improve overall season performance?

ProfitLogic's Assortment Execution solution provides planners and allocators with the tools and insights needed to develop buy quantities, build flow plans to the DCs and to the stores, set size profiles and determine the best use of pre-packs. It analyzes the impact of seasonality, price, low inventory, and promotions on customer demand at the local level and item level and considers operational constraints such as presentation minimums, shipment minimums, and safety stock levels to operationalize the assortment strategy. This results in creating orders that reflect just the right amount to buy at the right time to more effectively manage cash flow while driving increased return on investment.

"Retailers are reaping the benefits of understanding sales performance at the local-level and using optimization capabilities to drive better pricing decisions," said Noha Tohamy, Principal Analyst in Forrester Research's Retail Practice. "The next logical step is using these tools to make better assortment decisions both pre-season and in-season."

"ProfitLogic's Assortment Execution solution is built upon the market- tested and scalable demand analytics of our flagship Merchandise Optimization solutions," said Scott Friend, Co-founder and President of ProfitLogic. "It provides operational workflow that flexibly addresses the needs of merchants from plan development and execution through in-season management."

Tailoring Assortments

Most planners would welcome the opportunity to better tailor assortments to local needs. However, most have no choice but to rely heavily on averages and key item plans because they don't have the tools or systems in place to take local market needs into consideration for every item. Homogenous store assortments and imprecise buy quantities across the assortment result in stock outs and lost sales for some items and overstocks and greater markdowns for others. Even small errors in the calculation of store-level quantities can lead to large declines in sales and gross margins. Assortment Execution helps planners and allocators effectively execute the assortment to the store by providing decision support that maintains merchandising objectives, like color stories and assortment mix, within the constraints of the financial plan.

Flowing Merchandise to the Stores

The challenge with flow planning is predicting how each market's demand will unfold over the season and creating a flow that satisfies both demand and operational constraints. Front-loading receipts often results in carrying excess inventory and reduces the ability to react to in-season performance. In one case, a specialty retailer determined that the optimal number of deliveries to the store was three instead of one for the same total quantity, and the company drove a significant increase in turns and return on investment.

ProfitLogic's Assortment Execution solution does all the computationally intensive work to generate DC and store flow recommendations, allowing planners to focus their time on issue resolution rather than tedious analysis.

The result is a timely executed receipt plan that effectively manages cash flow and drives increased return on investment and turns, and allocations based on the intent of the assortment.

Extending Beyond Traditional Systems

Because traditional assortment and allocation systems do not support the ability to plan merchandise, time and locations simultaneously, merchants are forced to make decisions without an understanding of true market-level demand. ProfitLogic applies an integrated approach, supporting time-based planning by location and providing detailed visibility into customer demand. As a result, the Assortment Execution solution helps merchants follow their merchandise throughout the entire lifecycle and execute the best strategies to gain the most from their inventory investment.

To read more about Assortment Execution in action click here: (Northern Group Retail Extends Use of ProfitLogic's Merchandise Optimization Suite to Pre-Season Planning).

About ProfitLogic

ProfitLogic provides an industry-leading suite of Merchandise Optimization solutions designed for retailers whose priority is getting the highest return on inventory investments. ProfitLogic's solutions provide merchants with day- to-day operational decision support and workflow for making better-informed assortment execution, allocation and fashion replenishment, promotion, pricing and markdown decisions. ProfitLogic has delivered fast, flexible solutions with significant financial benefit to industry leading retailers such as American Eagle Outfitters, AnnTaylor, Bloomingdale's, Charming Shoppes, The Children's Place, Gap Inc., including: Gap, Banana Republic, Old Navy; JCPenney, Marshall Field's, Meijer Stores, New York & Company, Northern Group Retail, Sears, ShopKo Stores, Target Stores and Toys R Us. For more information about Cambridge, Mass.-based ProfitLogic, call 617-621-5500 or visit

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