Smart Selling

Retailers are gaining insight into customer behavior with real intelligence.

Northern Group Retail and Anchor Blue Retail Group are two clothing retailers that are garnering success with retail profit optimization tools. The tools enable retailers to better manage the fine balance of stocking staples and seasonal items—a balance that can make or break a retailer.

Retail profit optimization software applications help retailers obtain a better understanding of their inventory and price and sell it correctly. Both Northern Group Retail and Anchor Blue Retail Group utilize Oracle Retail solutions, such as Oracle Retail Profit Optimization and Oracle Retail Advanced Inventory Planning, to address merchandising challenges.

Read how these tools help retailers make more profitable and smarter buying and selling decisions based on gathering data about customer spending and shopping habits.

The typical Northern Group Retail customer is a mom looking for comfortable, well-made clothing, for herself or her children. The Canadian-based retailer has more than 225 ladies' Northern Reflections and children's Northern Gateway retail outlets. But there was a downside to the company's success—at the end of the day, although company executives knew how many of its more than 10,000 SKUs of clothing had been sold, they knew very little about what each customer had bought or how frequently they were shopping.

"We had historical information on how a style sold in specific stores. The view, however, was more merchant-centric than customer-centric. A buyer would be able to say, 'I bought 5,000 of this sweater and I sold 4,000 of it. Here are the stores I sold it in and here are the sizes I sold it in.' But that was all," explains Bill Booth, Northern Group's vice president of inventory management. "We used focus groups and talked to sales associates and managers to get more information, but it was all anecdotal perceptions of what was going on in the stores."

As a result, in 2001 the company experienced significant losses after making what were categorized as poorly structured markdowns; executives realized that pricing strategies weren't what they should have been. Too much merchandise was selling at a discount, and inventory wasn't turning over quickly enough. Customers weren't able to buy what they wanted when they wanted, because there wasn't enough space on the selling floor for new merchandise as the seasons changed. This meant Northern Group Retail was not only experiencing capital drain, but a drain of its customer loyalty as well.

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