Inventory Planning: Start Broad, Then Break Down by Channel
Then compare this year’s open-to-buy plans to previous years’ plans so this year’s plan is consistent, Goodman said. Constantly compare your current plan to your budget to see where you can make changes.
“Channel planning is effective only if inventory is allocated to each channel,” he noted. “If you have two separate warehouses with the same products in each, know which products will be used to fill Internet and catalog orders, and retail store stock.”
Broken down by channel, each has its own characteristics so plan accordingly, Goodman said.
Retail: Consider all new stores, comp stores, seasonal curves and store attributes (such as climate and locale), Goodman said. Plan for initial stock quantities and back stock, as well as allocation of assortments to stores.
Catalog: Consider the number of catalog editions, titles and drops, response rate targets and the timings of mailings. “Those all affect assortment plans based on a new vs. a repeat strategy,” he said.
Internet: Consider how many different Web sites you have, landing page changes, e-mail campaigns and conversion rates. Also consider portal plans by planning for increases in volume for orders coming via Web portals. “Know what drives sales to your Web site, such as your catalog, TV ad campaigns, Sunday newspaper supplements and other modes,” Goodman said. “Then plan your assortments seasonally.
In making your assortment plans, determine your merchandise slotting and cross-channel merchandise (the items that are sold on all channels). For instance, if you have products only being sold at retail or in the catalog, “you may not want to have those items on your Web landing pages,” Goodman said. In sum, you wind up with three separate plans that come together in cross-channel forecasting, Goodman said. Keep those plans consistent across your three sales channels so you can have channel accountability.