What is (Inter-Store Transfer) IST?
The inter-store transfer also referred to as Inter Branch Transfer, is part of the retail supply chain management where the inventory is transferred between different store locations belonging to the same retailer. It is usually carried out for a single, or few items, to meet specific customers’ needs or for inventory consolidation to ensure optimal availability, better exposure of inventory, and subsequent improvement in sales.
Why is it necessary?
Merchandisers allocate fresh inventory at the start of the season based on the initial demand forecasts. However, as the season approaches, the actual store performance may change leading to understocking or overstocking scenarios. Therefore, the reshuffling of in-season inventory between stores becomes critical.
When it needs to be done?
Inter Store Transfer is generally done in the season before the end of the Full price period to improve the availability of inventory by moving it between stores. Retail merchandisers prefer to achieve a higher sell-through on the inventory before it needs to be liquidated or discounted for clearance.
In situations where excess stock is present in stores with low demand, or when the fresh inventory is leaner in terms of width and depth in stores with higher demand, inter-store transfers help in improving stock availability. It helps correct the allocations done during the pre-planning period.
How Increff Merchandising Solution performs IST?
Step 1
Liquidation cleanup of data
The input sales data is cleaned for spikes or dips experienced during liquidation events. Such events tend to distort the actual demand and compel customers to purchase due to low price points. This cleanup is done for each store-brand category and the max revenue that can be cleaned in the process is used as the input. If there are no such sales, i.e., all the sales are at similar discounts, then there is no cleanup.
Step 2
Topsellers identified at Region – Brand – Category level
Step 3
Store Style Ranking
Used to determine the performance of a style in the stores that belong to the same region. This is a very important factor in IST since it determines the movement of the inventory of a style from the least-performing stores to the better-performing stores.
The differentiator in store-style ranking – Usually top styles are allocated to top stores, however, top styles may not perform well in the top stores. Merchandising Solution has a matrix approach to see which style performs in which store, rather than blindly moving top style to top stores.
Step 4
Outwarding and Inwarding of stocks
Maintaining key size availability in stores, the top stores will receive pieces as per the demand. Outwarding and inwarding is done based on the ranking of the style in that particular store. The downloadable report showing source and destination stores is available for direct implementation.
Health Correction
A healthy size set where key sizes are present is maintained. If the store-style rank is low, the stock is outwarded to consolidate at a higher-ranking store. Hence the leftover pieces from cut sizes/extreme sizes get more visibility as well.
