Automated Allocation Replenishment Module for JIT and OTC merchandise

Lenskart, the tech-driven company that revolutionized the Indian eyewear industry, was looking for a merchandise allocation platform that allows them to:

• Operate centrally with a large network of retailers in India and other potential markets
• Automate daily tasks, including pre-season and in-season planning and execution for both just-in-time (JIT) and over-the-counter (OTC) merchandise.

Increff merchandising solution, with its new feature of managing JIT merchandise, was integrated to handle multiple modes of operation for serving customers – from the store, the central warehouse, or the local distribution centers.

Objectives:

• Demand-based assortment planning and allocation to establish a granular store-wise assortment plan and assign relevant SKUs to meet local demand
• Avoid loss in sales opportunities by filling the gap in demand requirement based on attribute performance
• Generate quantity recommendations at the store level based on True ROS(™) for OTC (Over-the-counter) merchandise to avoid any potential stockouts

Solution:

As it was a critical challenge, the brand started considering multiple global solution providers and big industry leaders. Increff proposed a POC (Proof-of-Concept) of its merchandising tool so the client could experience the impact before it finalizes on which tool to implement, across all stores. Within 4 weeks of implementation, Lenskart experienced clear improvements in ROS, store performance, and inventory accuracy by addressing some critical pain points like:

• Attribute Grouping -Identifying the right set of attributes for each category, with a hierarchy as per the customer decision tree. Automating the creation of attribute groups to look for replacement styles within the same group in case of stock outs and roll-ups. 
• Smart Assortment Planning – Generating an assortment plan for each store at an attribute level based on historical data by correcting for stockouts and identifying the available gap in each attribute group at a store to allocate new merchandise. 
• Replenishment/ Allocation based on store-style ranking algorithms – Placing the right style at the right store based on its estimated selling potential. Automating replenishment daily to fulfill the available gap by restocking fast-moving merchandise and allocating fresh merchandise to stores as a replacement for stockouts. 

Business benefits:

An A/B test was conducted to demonstrate the benefits of implementing the Increff merchandising Allocation/Replenishment module.

• A & B sets have 90 identical stores each

Impact observed (in 4 weeks period post-execution):

*Even with less merchandise exposed, our merchandising tool was able to show a higher ROS and margins.