Data-driven inventory control is critical to ensuring shelves are stocked with the right product at the right time. As many retailers know, having the right products to meet demand can be the difference between happy customers and lost sales.
But in the footwear and apparel industry, where trends come and go so quickly, brick and mortar stores have an ever-quickening cycle they need to keep pace with in order to stay competitive with the online retail marketplace
Luckily, forecasting fashion trends isn’t as difficult as it may seem thanks to customer data, a retailer’s biggest competitive advantage. Those that analyze it consistently can identify upward trends earlier and get ahead of the curve quicker.
RICS clients Dan and Marci Ungar, owners at Mar-Lou Shoes in Lyndhurst, OH, know the positive effect data can have on making informed and timely inventory decisions. Vanessa Reese, Mar-Lou Shoes’ Marketing Director, uses data from RICS on a daily basis to track trends and create effective targeted campaigns.
Since 2006, women’s footwear has been more profitable than men’s footwear for Mar-Lou Shoes. In fact, since 2012, women’s footwear has accounted for more than three-fourths of their company volume and profit.
With their women’s footwear business as a clear priority, the team at Mar-Lou Shoes closely monitors their inventory performance by analyzing data through RICS. In 2015 they recognized growth across in-store sales of women’s athletic, casual, and flat footwear styles. The numbers show annual sales revenue for three of their top “casual” brands has risen 50% over the past three years, increasing their share of Mar-Lou’s annual profit by 52%. This is a result of honing in on what is good, and making it better, through analyzing detailed information in RICS.
Not coincidentally, a new trend has emerged in women’s footwear fashion across the U.S. Multi-purpose comfort shoes are increasingly modish while high heels are declining in popularity and sales (BizJournals.com).
By analyzing their data, the team at Mar-Lou Shoes was able to take action before this trend became widely known. They understand well that benchmarks like turn, gross profit percentage, ROI, and aging, for example, are critical to managing inventory at all levels, right down to SKU sizes and widths. So they increased the amount of “trendy” casual inventory on their shelves to deliver upon the consumer demand.
Purchase Order Frequency, Quantities & Suppliers
By analyzing their increasing sales and revenue between 2011 – 2012, Dan discovered the need for more inventory in certain categories and brands. Not only did they increase the number of orders purchased for women’s footwear, they increased item quantities purchased; a strategy that has proved itself to be profitable every year since.
Similarly, Mar-Lou Shoes has increased the number of women’s footwear suppliers from whom they purchase. Since 2012, Dan and Marci have added more than 20 new women’s footwear brands, allowing them to replace at least 10 other underperformers to better meet customer demand. Dan likes the ability to view the business from 10,000 feet or drill down to the one-foot view in just seconds. It’s this attention to detail that allows the company to closely and constantly monitor the needs of the number two asset of the company (employees and customers are number one!): inventory.
Meeting Customer Needs
Along with the continued use of highly-targeted marketing campaigns, segmented by shopper’s preferred brands, unique sizes and widths, etc., Mar-Lou Shoes’ data-driven inventory management strategy has helped them meet more customers needs more often by stocking not just trendy items, but staple footwear in the sizes and widths needed.
Purchasing changes have helped women’s footwear ROI and gross profit grow significantly the past two years. Markdowns for items in women’s footwear have dropped over 10%, helping drive margins up 1.5%; to levels above industry benchmarks for footwear retail margins.
By The Numbers
Since 2006 at Mar-Lou Shoes:
- Annual sales revenue has increased 43%
- Total tickets have increased 129%
- Total multi-item tickets have increased 123%
- Average ticket value has increased 50%
- Average multi-item ticket value has increased 54%
The power of accurate data allows for detailed analysis to identify not just strengths, but weaknesses as well. The resultant reporting allows for better communication with suppliers to address concerns – allowing for better inventory management.
Trends don’t stay trendy for long. Mar-Lou Shoes proves that retailers who can identify upward trends through data can build a profitable business around them. With detailed, accurate and timely data the team at Mar-Lou can stay laser-focused on building on the strengths of their inventory and customer data to drive sales and profits.