Problem

The leading brand in eyewear (sunglasses)wanted to improve its sales and inventory management function in the sales channel of organized retail (departmental stores).

Solution

The brand planned its 3 main season launches through the year. We analyzed that in organized retail channel, the new product range in the merchandise did not move quickly enough to occupy the retail shelves. It stayed in the central warehouse and was supplied over a period of time.

This was on account of the Company policy of not withdrawing its old merchandise from the market until a year with the assumption that its shelf life was longer and did not diminish with the passage of time.
We analyzed the data to show the policy was based on a wrong assumption by comparing the contribution of stock to contribution of sales in the old merchandise vis-à-vis new merchandise.

With this knowledge, we drew guidelines on timing of fresh season merchandise despatch to the market, discount structure to be offered after certain shelf life, old merchandise withdrawal time table and subsequent discount structure.

Outcome

The client teams now followed clear guidelines and rule book on timing of merchandise drops at the retail front end, its later withdrawal, sales performance monitoring techniques, and discounting guidelines, reducing dependence on top management at all times for all decisions.