ProfitLogic, the industry-leading provider of Retail Profit Optimization solutions, today announced that Reitmans has joined other retailers, including JCPenney and Northern Group Retail, in adopting ProfitLogic’s Assortment Execution solutions for optimization of assortment and allocation decision-making.  Reasons for major retailers’ growing adoption of ProfitLogic’s Assortment Execution solutions include the desire to improve financial performance, the need for better insight into future customer demand in the planning and allocation process, and the competitive imperative to localize assortments. 

Retailers Capture Untapped Comp Store Sales and Gross Margin Dollars with Assortment Execution As a result of significant financial return from applying analytics to pricing decisions, retailers are extending their use of analytics further upstream in the merchandising process to improve buying and allocating decision-making.  Assortment Execution solutions enable merchants to more effectively deliver the right quantities in the right sizes to the right stores at the right time. As a result, over and under-stocks are minimized, excessive markdowns needed to “clean up” inventory mistakes are reduced, and financial performance is enhanced dramatically.  According to a 2002 Retail Out-of-Stock Study, retailers are likely to lose almost one-half of the intended purchases when a consumer confronts an out-of-stock (Gruen, Corsten, and Bharadwaj).  Assortment Execution from ProfitLogic helps retailers avoid such expensive errors, typically resulting in a 7-15% increase in sales and gross margin dollars. 

"Even as retailers become better at forecasting orders in aggregate, many are leaving significant dollars on the table due to poor allocation of size runs to individual stores,” said Brooks Kitchel, Principal of Kurt Salmon Associates.  “Breaking sizes too early leads to dissatisfied customers, uneven presentation and lost sales, while going overboard leads to cluttered stores, reduced turns and increased markdowns. Getting this right can lead to real benefits — we’ve seen 10% increases in full price sell through alone.”

Assortment Execution Complements Assortment Strategy with Next Generation Decision Support Assortment Execution solutions deliver decision support and recommendations where traditional planning systems fall short.  ProfitLogic Assortment Execution solutions assist merchants and planners with key decisions that influence the financial performance of any assortment after the merchant vision and high-level assortment strategy is established.  These decisions include: 

Tailoring assortments - How to tailor the assortment for each unique store group?

Determining optimal buy quantity  - What is the optimal buy-quantity for each item?

Flowing inventory to DCs and stores - What is the optimal way to flow inventory to the DCs and stores during the season by week?

Ordering by size and pre-pack - What is the optimal use of pre-packs to best match store-level size demand by style?  

Allocating to stores pre- and in-season - What is the optimal amount to allocate to each store at the beginning of the season and how much should be reallocated in-season?

Tracking performance - How does actual performance compare to plan? What are the over- or under-performing items and what action can be taken to improve performance? 

Assortment Execution does the computationally intensive work required to optimally match inventory investment and receipt flow to demand by store over time. "It allows the merchants the freedom to create their assortment plan while offering analytical tools to help them make their decisions and execute on those decisions based on up to the minute demand data," stated Noha Tohamy, Principal Analyst of the Retail Practice at Forrester Research in her recent report, Retailers Embrace Next-Generation Merchandizing: ProfitLogic Showcases Its Vision For Bridging The Planning And Execution Gap, Forrester Research, Inc., May 2005.

Assortment Execution Helps Retailers Respond to Competitive Pressures by Tailoring Assortments to Local Market Demand ProfitLogic’s Assortment Execution solutions support the competitive retail imperative of localizing assortments to best match customer demand. ProfitLogic provides retailers with the ability to assess store-level customer demand, at the size and color level, before the key buy-quantity decisions are made. Armed with this information, buyers and planners can more effectively determine the right amount to buy and how to best leverage case-packs to match inventory with store-level size selling patterns. 

“Retailers are broadening the application of analytics beyond markdown management to extend throughout the merchandising process,” said Scott Friend, Co-founder and President of ProfitLogic.  “Retailers like Reitmans, JCPenney and Northern Group Retail are capitalizing on the tremendous opportunity to enhance customer satisfaction and financial performance by leveraging customer demand insight in their buying and allocation processes. The results speak for themselves.”

For more information on how Reitmans and Northern Group Retail are using ProfitLogic Assortment Execution solutions, please refer to the following press releases: Reitmans:  http://www.profitlogic.com/5_24_05_Reitmans.htm Northern Group Retail:  http://www.profitlogic.com/1_04_05_Northern_Assortment.htm

ProfitLogic provides industry-leading Retail Profit Optimization solutions designed for retailers whose top priority is getting the highest return on inventory investments.  ProfitLogic’s customers have found that using insight into future customer demand results in more profitable merchandising decisions and more time to focus on what matters most: the customers and the merchandise.

About ProfitLogic ProfitLogic provides an industry-leading suite of Retail Profit 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, Burlington Coat Factory, Charming Shoppes, The Children’s Place, Gap Inc., including: Gap, Banana Republic, Old Navy; JCPenney, Loehmann’s, Marshall Field's, Meijer Stores, New York & Company, Nordstrom, Northern Group Retail, Reitmans, Sears, ShopKo Stores and Toys R Us. For more information about Cambridge, Mass.-based ProfitLogic, call 617-621-5500 or visit www.profitlogic.com.