| Oracle® Retail Assortment Planning User Guide for the RPAS Fusion Client Release 15.0 E64557-01 |
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| Oracle® Retail Assortment Planning User Guide for the RPAS Fusion Client Release 15.0 E64557-01 |
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This chapter provides an introduction to Oracle Retail Assortment Planning (AP).
The assortment planning process establishes the breadth and depth of the product offering (including the color/fragrance/flavor and size level), for Points-of-Commerce and for a given period of time. The analysis of past performance such as color effectiveness, trend adoption, size preferences, customer segmentation, styling visualization, in-store placement, and geographic selling are key inputs into revising a currently planned/executed assortment or building a new assortment.
Assortment Planning is a role-based solution enabling each role (Senior Merchant, Buyer/Trader and Planner, and so on) to use the solution to develop, record, and track their assortment decisions and strategies. A role-based user can do the following:
Decide the breadth and depth of the assortment by Point-of-Commerce.
Identify the number of styles or items and the number of options (colors/fragrances/flavors) per assorted style or item.
Evaluate both the sales/margin potential as well as the sales/inventory capacity for a single or group of Points-of-Commerce.
Create a shopping list for use when going to market, meeting with designers/vendors, reviewing Look Books, and so on, that can be used to flesh out the assortment as decisions are made.
View the look and feel and of the assortment from the customer's perspective as a collection and at the detail level.
Determine where to make receipt and inventory investments in the assortment.
Create a buy plan (sales, margin, inventory, receipts, and sell-thru) to guide the execution of the assortment and to track its results.
Align the assortment plan with the Merchandise Financial Plan (MFP) and/or Location Plan (LP).
Re-trend the assortment plan to make in-season assortment decisions.
Assign the color runs (or fragrance of format groups) to be carried for each style/item.
Set up (if not using Oracle Retail Size Profile Optimization (SPO)) or review size profiles and pack definitions to be used when executing the assortment in each Point-of-Commerce.
Use Oracle Retail Science to convert the Buy Plan's receipt quantities into a style-color-size receipt plan in eaches and/or in prepacks.
Use the In-Season/Performance analysis to apply what you have learned from assortments in a single or groups of Points-of-Commerce and prior assortments when creating new or revising planned assortments.
Execute assortment decisions through the packaged integration.
There are several processes by which an assortment can be established in this solution:
Collaborate with internal design teams to develop house brand assortments.
An initial super-set is supplied by Product Lifecycle Management (PLM) solutions:
Then choose from super-set of options in AP.
Select options and request adjustments be made from an assortment offered by third-party vendors.
Create a global assortment from which each regional business unit selects a subset to carry in their region.
Wholly owned, wholesale, and franchise model:
Build an assortment for wholly owned Points-of-Commerce.
Recommend an assortment for wholesale customers.
Identify an assortment to be sold through franchised locations.
Omni-channel—Identify a super-set of assortment options and then determine which options by location will be available for the following:
Both sale and fulfillment.
Order creation only (and potentially for demonstration/trying on).
Fulfillment only.
All of the Oracle Retail Planning solutions are highly configurable to enable each retailer's assortment business-specific, successful business methods to be embedded in the solution and business process. Oracle Retail has identified several keys to success with the Assortment Planning solution, including:
Align with the Merchandising Plan - The Assortment Plan must be aligned with the Merchandise Financial Plan (MFP) and/or Location Plan (LP) to insure the inventory investment required to support the Assortment Plan is financially viable and risk approved (AP offers packaged and configurable integration that links assortment plans to financial plans).
Process Flexibility - Assortment planning processes vary widely within each retailer and across retailers. The business process must be flexible so that merchants can keep current with fashion trends, market shifts, economic changes, and customer preferences.
Build the assortment in layers - Build and view the assortment in attribute-based layers. Evaluate the assortment by brand, color, color family, fabric, silhouette, fit, length, embellishment, trend, and so on, and compare the prevalence by attribute to recent trend, last season, last floor set, customer panels and social network, or Endeca search results.
Plan the full lifecycle - Plan the entire lifecycle, from launch to normal selling to clearance and exit. (The AP solution plans the entire life of the assortment and integrates with its promotion and clearance pricing solutions to maximize the assortment's profitability.)
Plan the assortment visually - Because customers do not shop from a spreadsheet, Oracle Retail believes that merchants should not have to plan the assortment with only a spreadsheet. Oracle Retail's Assortment Planning solutions enable the merchant to view the assortment from silhouettes at the beginning to finished goods at the end.
Plan once and execute everywhere - Be able to make a decision in Assortment Planning and execute it everywhere without manual reentry of the decision in multiple solutions. Oracle Retail Assortment Planning solution can, depending on the implementation, integrate data with the Oracle Retail Merchandising System, as well as, Oracle Retail Clearance Optimization, Size/Pack Optimization, and Allocation/Replenishment solutions.
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Note: See the Oracle Retail Assortment Planning Installation Guide for compatible integrated Oracle Retail applications. |
These same integration options, as most are configurable, can be used for integration with non-Oracle solutions as well.
Before the rise to prominence of commerce web sites, mobile applications, and social commerce networks, the Assortment Planning solution traditionally used the terms Location, Location Hierarchy and Store Clustering Hierarchy to describe stores. Assortment Planning uses a more inclusive term that recognizes what has become a considerable share of a retailer's revenue and profits: Point of Commerce, abbreviated as PoC.
PoC can refer to any location at which sales can be created, including:
Physical stores
Catalogs
Call centers
Web sites
Mobile applications
Social commerce networks (that is, Pinterest, Twitter, Facebook, Google Commerce and so on)
Wholesale/Franchise accounts or store groups within the account
PoC is a generic and important term because it encompasses the ways retailers now are generating revenue and extending their customer relationships.
In place of location or store, AP uses Point of Commerce or PoC. Note that in this document, these terms are also utilized: store, site, and application.
In place of Store Clustering, Oracle Retail refers to the Clustering capability embedded in Assortment Planning as just Clustering as opposed to the advanced version of Clustering found in the Oracle Retail Advanced Clustering solution that works with clusters based on Customer Segment profiles and more advanced algorithms that build clusters based on attribute proximity.
Assortment Planning supports planning for wholesale and franchise accounts alongside wholly owned retail channels (stores, sites, and applications). This support includes process steps, views, measures, and rules embedded in each applicable task that supports the building and planning of assortments in each channel (wholesale and franchise accounts are separate channels), rather than lumped into the existing brick and mortar and direct channels. These wholesale and franchise specific options can be deactivated for customers not requiring them. This solution uses the term account to refer to a specific wholesale or franchise retailer.
The planning approach encompasses several key capabilities:
Plan all of your channels (stores, sites, applications, catalogs, wholesale accounts, and franchise accounts) in a single workbook.
Plan and view actual sales, markdowns, and profitability of each channel (bricks, clicks, and wholesale/franchise) at the channel level and down to the account level (for wholesale and franchise channels).
Assemble an assortment (using the entire or just part of the Assortment Creation and Planning process) for each channel down to the cluster level (a cluster could be one or more accounts or a subset of an account such as the Southern stores for Wholesale Account ABC).
Plan sales, shipments, inventory, and buy quantities by wholesale or franchise account or account cluster (if you wish to plan a larger account in sub-groups of stores, sites or apps).
Calculate your cost and margin plus the markups to be applied prior to transferring the inventory to your wholesale and franchise accounts.
Plan the transferred cost (retailer's cost plus markup), margin, and Suggested Retail Price (SRP) for your wholesale/franchise accounts.
Plan the markdowns you will take versus the markdowns your wholesale/franchise accounts will take.
These capabilities are supported out of the box for Assortment Planning with the ability to tailor them to your specific needs through configuration. The specific wholesale/franchise capabilities are explained in each chapter of this document.
Wholesale and Franchise accounts are represented in the Point of Commerce hierarchy (from which Clusters are created or loaded) in the following way as shown in Figure 1-1.
Note that for wholesale and franchise accounts, you can choose to do the following for each account:
Plan multiple whole accounts in a single Cluster (all Berlin wholesale accounts could be planned in one Cluster).
Plan all channels for a single account in a single Cluster (all of Wendy's points of commerce could be planned in one Cluster).
A large or particularly diverse account could be planned in multiple Clusters (planning Dirk's Warm, Temperate and Cool Points of Commerce in three Clusters or by channel, and so on.)
Additional planning measures (shown in Table 1-1) have been included to support the unique requirements of a retailer transferring goods to a wholesale or franchise account for resale.
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Note: Measures labeled Wholesale/Franchise in the table are abbreviated as WHSLE/FRCHS in the solution. |
Table 1-1 Measures for Wholesale/Franchise
| Measure | Description | Math | Notes |
|---|---|---|---|
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Cost |
A planned measure that reflects the cost to buy or to transfer the style-color from the supplier/manufacturer to the retailer (but not to the wholesale or franchise account). |
Not calculated, but used in many calculations |
This same cost measure is used for wholly owned channels (stores, sites and applications) and is used to calculate the margin for the retailer (but not for the wholesale or franchise account). |
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Wholesale / Franchise Markup % |
The percentage by which the cost is marked up before transferring the merchandise to the wholesale or franchise account . |
Markup % = Markup R / Cost |
This markup percentage can vary by wholesale/franchise account and by Style (or higher). |
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Wholesale / Franchise Markup R |
The retail value by which the cost is marked up before transferring the merchandise to the wholesale or franchise account . |
Markup R / = Markup % * Cost |
NA |
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Retailer Cost |
The net cost for the wholesale/franchise account for the style or style-color. |
Retailer Cost = Cost + Markup R |
This cost is used when calculating margin measures for the wholesale or franchise account. |
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Suggested Retail Price (SRP) |
The suggested price at which the wholesale or franchise account should price the style or style-color. |
Is not calculated, but is used in many calculations such as SRP GM R and so on. This measure may be extended through configuration to be calculated based on a targeted margin percentage applied to the Retail Cost. (The Retail Cost is already marked up by the wholesale/franchise account.) |
This measure is used to calculate the wholesale or franchise account's gross margin (not the retailer's gross margin). |
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SRP Gross Margin R |
Gross Margin in currency value for the wholesale/franchise account . |
SRP Gross Margin R = SRP - Retailer Cost |
These measures allow you to plan the gross profitability of the assortment by wholesale/franchise account from their perspective. |
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SRP Gross Margin % |
Gross Margin for the wholesale/franchise account as a percentage of the SRP. |
SRP Gross Margin % = SRP Gross Margin R / Retailer Cost |
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|
Markdown per Unit Sold |
An editable measure to show the markdowns planned to be taken by the wholesale/franchise account per sales unit . |
Markdown per Unit Sold = SRP * Markdown % |
This section of markdown measures refers to markdowns taken by the wholesale/franchise account, not by the retailer selling to the wholesale/franchise account. |
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Markdown % |
An editable measure to show the markdowns planned to be taken by the wholesale/franchise account as a percentage of the SRP . |
Markdown % = Markdown per Unit Sold / SRP |
NA |
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Markdown % Owned by Retailer |
This editable measure reflects the percentage of markdowns taken by the wholesale/franchise account that are owned by the retailer . |
Markdown % Owned by Retailer = Markdown R Owned by Retailer / Markdown per Unit Sold R. |
A retailer may negotiate the percentage of markdowns taken by the wholesale/franchise account that will be covered by the retailer that supplied the merchandise. |
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Markdown R Owned by Retailer |
This editable measure reflects the currency value of markdowns taken by the wholesale/franchise account that are owned by the retailer. |
Markdown R Owned by Retailer = Markdown R * Markdown % Owned by Retailer |
NA |
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Wholesale / Franchise Margin R |
This editable measure reflects the margin value of the style or style-color for the wholesale/franchise account, not for the retailer supplying the merchandise to the account. |
Wholesale / Franchise Margin R = (Retail Cost - Cost - (Markdown per Unit Sold - Markdown R Owned by Retailer) * Sales U |
NA |
|
Wholesale / Franchise Margin % |
This editable measure reflects the margin value of the style or style-color as a percentage of Sales for the wholesale/franchise account, not for the retailer supplying the merchandise to the account. |
Wholesale / Franchise Margin % = Wholesale / Franchise Margin R / Sales R |
NA |
|
Retailer Margin R |
This editable measure reflects the margin value of the style or style-color for the retailer supplying the merchandise to the account; net of the markdowns owned by the retailer. |
Retailer Margin R = (SRP - Retail Cost - Markdown R Owned by Retailer) * Sales U |
Retailer is the entity selling the merchandise to the wholesale/franchise account. |
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Retailer Margin % |
This editable measure reflects the margin value of the style or style-color as a percentage of sales for the retailer supplying the merchandise to the account; net of the markdowns owned by the retailer. |
Retailer Margin % = Retailer Margin R / Sales R |
Retailer is the entity selling the merchandise to the wholesale/franchise account. |
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Shipments R |
Shipments represent the transfer of merchandise in currency value to the wholesale/franchise account. The term Sales is used to represent sales to the consumer regardless of whether a wholly owned store/site/app or a wholesale/franchise account sold the item to the customer. |
Manually entered, out of the box. See the notes column for the means by which this measure may be extended through configuration. |
Shipments R and U may be extended through configuration so that they are calculated using a lag of Sales R and U respectively, through the use of the RPAS Lag function tied to a number of weeks lag between shipments to a wholesale/franchise account and their sale by the account to a consumer. The number of weeks lag (can be its own measure that is fed from a solution like Oracle's Replenishment Optimization or maintained directly by the Planner). You can take this extension further and plan shipments that roll forward to sales (rather than planning sales that roll back to shipments) with the use of the same RPAS function. |
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Shipments U |
Shipments represent the transfer of merchandise in unit value to the wholesale/franchise account. The term Sales to represent sales to the consumer regardless of whether a wholly owned store/site/app or a wholesale/franchise account sold the item to the customer. |
Manually entered, out of the box. See the notes column for the means by which this measure may be extended through configuration. |
|
|
Shipments AUR |
The average currency value per unit of shipments. |
Shipments AUR = Shipments R / Shipments U |
NA |
Assortment Planning is a business function that merchants and planners perform to determine the appropriate mix of products that maximizes organizational goals: sales, profits, inventory turn, and so on. The challenge is to create fresh and new presentations of merchandise that are appropriate to the end-customer by considering the Points-of-Commerce, fulfillment type, customer expectations, lifestyle, climate, festive seasons, fashion trends, and so on.
Retailers usually control budgets by defining multiple floor sets (called Looks in the out-of-the-box version of Assortment Planning). In order to present a fresh look, multiple floor sets could be planned within a season for short time periods. Assortment Planning requires finding the balance between several competing constraints that the Merchant and Planner must consider. The presentation should have a rich mix of products in terms of material, styling, brand, seasonality, and price point. However, all of these choices have to be constrained by the receipt/inventory budgets and screen/floor space available. Also, choices must be made between style-colors/items that are high trend, seasonal trend, classic, and basic as well as between highly profitable yet less predictable sellers and those that deliver moderate margins but have more predictable and longer lifecycles.
Each Point-of-Commerce has its unique characteristics and could require a different assortment in a specific size ratio to maximize potential. However, with the number of variables involved in planning and executing assortments, it is a beneficial business practice to group Points-of-Commerce into a manageable number of clusters and to create an assortment plan at the cluster level.
While the detailed Assortment Planning process varies from category to category and/or by Point-of-Commerce type (also known as Channel) within a retailer, there are, at a high level, a common set of steps.
The following chart shows the Oracle Retail out-of-the-box Assortment Planning process by persona (or role). Given the solution's high level of configurability, this solution can be configured significantly or minimally to match each category's assortment approach.
Note that it is not required that the Visual Merchant, Central Sales Planner, Merchandise Planner, and Allocator use the Generally Available (GA) version of AP. These users create important data that is used in any Assortment Planning process. This version of AP enables these additional users to create their data here in the Plan Setup steps or the data can be loaded from an external source.
In the following sections, what is accomplished, who is doing the work, and what are the inputs are described for each step in the process.
This process step covers preparation for the planning process. The Buyer, Merchandise Planner, Central Planning team, and Visual Merchandise Planner could be performing these steps (or the data could be loaded from an external source):
Look Maintenance
In this step, set up or load your look, floor-set, theme, or assortment calendar based on the following questions:
What is a look?
A look is a way to manage your work in the same increments as your floor-set, theme, or assortment calendar. The label look can be changed to match your terminology.
What defines a look?
A look represents a floor set, and so on, for a specific period of time for one or more subclasses.
What is a look group?
A look group is a group of looks. One way to remember is that a look group contains all of your spring floor sets and each look is one of your spring floor sets. Following are guidelines for look groups:
A subclass can be assigned to only one look at a time for each calendar day. For example, Subclass 40 is assigned to Look A for days 1 to 15 and Look B for days 16 to 30.
Multiple subclasses can be assigned to the same look.
Looks can start and end on any day. In the GA version, Looks that are assigned the same subclasses are not allowed to overlap within a fiscal week. This constraint was put in place to simplify and provide a clean reconciliation to the financial plan.
A subclass can be assigned to multiple looks within a look group, but only one look at a time.
A style-color can be the following:
Launched and clearanced in the same look.
Launched in Look A, carried over into Look B, and clearanced in Look C.
Launched in Look A, taken off the floor in Look B, and reintroduced in Look G.
Launched, carried over, and clearanced in many different combinations of looks.
Following are three possible look/look group scenarios:
A group of subclasses with similar items (all women's knit career tops) are assigned to the same look.
A group of subclasses with related items (women's career tops and bottoms) designed to sell together are assigned to the same look.
A group of subclasses that could be brand-based (tops, bottoms, and accessories with the same theme) from the same Brand X are assigned to the same look.
What about clusters?
In the generally available version of AP, clustering is the same for all looks in a look group. Clustering can vary across look groups.
If a style is carried in three consecutive looks, you do not need to plan the style three times. You can create a plan for the entire life of the item in a single Buy Plan. The solution insures the sales for each look are accounted for in each look's sales totals. You also can plan receipts for Style-Color 1 in the Spring 1 Tops Look in order to support sales in the Spring 2 Tops look.
MFP/LP Targets
As previously mentioned, a key step in the Assortment Planning process is to align the sales margin or markdowns, inventory and receipt plans in the Assortment Plan with the Merchandise Financial Plan (MFP):
The RPAS Platform enables Assortment Plans to be rolled up to any level of product, location, and time.
In order to provide the best option for aligning the plans, this step enables a Merchant, Planner, or Administrator to decide how to spread the Merchandise Financial Plan and/or Last Year sales to generate Location Plan to Subclass, Point-of-Commerce, and Week:
The Last Year Sales by Point-of-Commerce can be used to spread the Merchandise Financial Plan proportionally down to the lowest aggregate level of the Assortment Plan for alignment purposes at this level and at all aggregate levels.
This step is completed in real-time and does not require a batch.
If your Merchandise Financial and Location Plans are already at this level, also known as the Location Plan, this step can be skipped. The Location Plan is used to calculate the level of the sales and receipt curve in the Buy Plan when spreading the Sales and Receipt plan from Cluster to PoC (store, site, app, or account).
Size Profiles/Prepack Definitions
In this Administrative step, size profiles and prepack definitions are set up so that later, Buyers can select sizes and prepacks for each style-color carried in their assortment. This step is optional, if either of the following is true:
Size profiles and/or prepack definitions can be loaded from an external source.
Size profiles and/or prepack definitions are selected/optimized by another solution such as the Oracle Retail Size Profile Optimization solution are loaded into the AP solution.
A Selling Curve shows the typical shape of sales over the full life (launch, regular price, promotion and clearance) of a style-color or item.
These curves are used to create a weekly sales plan for the Buying Plan. Because the Senior Buyer has already determined the total and full price sales expected for the item (total - full price = clearance), a selling curve can be used to calculate the weekly sales for the style-color/item throughout its lifecycle.
Sales curves typically are created for each combination of lifecycle length, launch period (launching in May versus November for 12 weeks results in very different sales curves), and channel.
The following are examples:
May accessories launch - 10 week full and 4 week clearance lifecycle in physical stores.
May accessories launch - 12 week full and 4 week clearance lifecycle on-line/in application.
November accessories launch - 10 week full and 4 week clearance lifecycle in physical stores.
November accessories launch - 12 week full and 4 week clearance lifecycle on-line/in application.
These curves may be created from history, plans, forecasts, and/or loaded from an external source.
This Administrative step can be performed by the central planning team or Planning Administrator.
The following applies to the process step:
Assortments are created/planned for a group of Points-of-Commerce. Each Point-of-Commerce within a Cluster receives an identical assortment of style-colors/items. However, each Point-of-Commerce within a Cluster can receive a set of sizes and/or prepacks of those style-colors/items that are appropriate for their customers.
Store 1 and 2 are in the same cluster for subclass A and therefore receive the same assortment of style-colors from subclass A in the next floor-set. However, store 1 may receive the extended sizes for the assortment, while store 2 may receive just the core sizes.
The merchant or planner can choose to create the clusters in the Cluster Maintenance step or load clusters from a clustering solution, such as the Oracle Retail Advanced Clustering, or from another source.
The Cluster Maintenance process within this Assortment Planning solution enables the Merchant or Planner to use a number of techniques when creating the clusters, including:
Vary the clustering approach by look group (all looks under a look group would be clustered in the same way for the subclasses assigned to the looks in a look group).
Nesting - Each Point-of-Commerce is assigned to a cluster and each cluster is assigned to a cluster parent. For example, see Figure 1-6.
Historical sales, and margin performance profiles.
Planned sales, and margin performance profiles.
Climate and geographic attributes.
Point-of-Commerce specific attributes.
Fulfillment type attributes.
Product type attributes (brand X can only be sold in stores in markets A and B).
Any other attribute not found in the generally available version of Assortment Planning can be loaded or created using the user interface.
Only Brick and Mortar and Direct Channels can be clustered. Only one channel may be clustered at a time.
This process enables merchants to collect their assortment ideas and thoughts, record their decisions as they go to market, work with designers, and view look books, collections, and so on. In this task, merchants can perform the following:
Determine/calculate the number of styles for which the Senior Buyer wishes to eventually carry (either in total or by cluster parent, where each cluster is eligible to carry the assortment created for its cluster parent). This can be calculated through the use of sales plans (sales per subclass goals), historical sales, and/or fixture/page capacity or manually entered by the Senior Buyer.
Merchants can set assortment targets by attribute (brand, silhouette, sleeve length, heel height, width, and so on) and/or by Customer Segment. Dozens of attributes are packaged with the generally available version and many more can be added through configuration to suit each category's needs.
These targets may be seeded from the Look, from Last Year, loaded from an external source or set administratively by each Senior Buyer.
As the Shopping List assortment is built out by the Senior Buyer, the assortment mix, percentage of new and carryover styles, and so on, can be compared to the targeted assortment size using the Assortment Tote board.
Senior Buyers can use the shopping list to piece together their style level assortments by answering the following types of questions:
What key trends must be reflected in the assortment and how have I assorted to those trends to date?
How many styles should be carried from Brand X versus Last Year or from the last major floor-set?
Should I shift the number of styles by price point tiers? Should a tier be added or subtracted?
Which silhouettes, embellishments, brands, and so on, should be featured versus supported?
How should the assortment be adjusted from look to look (floor-set to floor-set)? Should a specific assortment be pre-launched and built for two floor-sets before contracting it?
How many colors and color runs (basic, seasonal basic, trend, and so on) should be carried by this style?
Should this style be carried in a basic or an extended size run?
Hundreds of decisions are made in this phase and all of them can be recorded here, rather than in a spreadsheet, e-mail, and so on.
For new styles, the merchant/trader creates placeholder styles using Dynamic Position Maintenance (DPM). For more information on DPM, see the Oracle Retail Predictive Application Server User Guide for the Fusion Client.
Throughout the process, the styles can be aggregated by product attribute to compare the depth by attribute to your goals, last year, recent floor sets, customer panels/analysts, and even to social network or Endeca search results.
In addition to attributing the items, merchants can record their thoughts regarding cost, price, color runs, sales volume, and buy quantities for each style. This data can be used to seed the Buy Plan and the Buyer can adjust these further during the Build the Wedge process.
Then, as the Senior Buyers finalize the assortment, their decisions can be shared with a merchandising system so that styles created/updated in Assortment Planning can be created and updated automatically in the merchandising system. AP refers to this functionality as Slow Item Build. For more information on Slow Item Build, see "Slow Item Build" and the Oracle Retail Assortment Planning Implementation Guide.
This task will be revisited as the Senior Merchant analyzes and revises work-in-progress during and after going to market.
Once the Senior Buyer has completed the Shopping List (creating the style level assortment in total or by cluster parent), the Buyer then assigns the assortment to each Cluster of Points of Commerce, and the following steps occur:
Determine the number of styles-colors required for each Point of Commerce cluster.
This can be inherited from the Cluster Parent level number of style-colors (created by the Senior Buyer), calculated with sales plans (sales per subclass goals), historical sales, and/or fixture/page capacity or manually entered by the Buyer.
Create style-color level positions below the style (based on the number of colors per style identified by the Senior Buyer). As with style creation, the style-color need only be set up in AP. AP refers to this functionality as Slow Item Build. For more information on Slow Item Build, see "Slow Item Build" and the Oracle Retail Assortment Planning Implementation Guide.
Create Attribute and Color Assortment Goals - Attribute level goals created by the Senior Buyer at the Cluster Parent level in the Shopping List are copied to each cluster, then the Buyer can adjust each cluster's attribute goals as needed. As with the Shopping List, the Buyer can use last year, recent trend, customer panels, or social network or Endeca search results to set those attribute goals by cluster.
Fill the wedge. The Buyer determines the style-color level choices for each cluster. The Assortment Planning solution includes a feature called Wedge Population Automation. The automation recommends which style-color options to carry in each cluster. Note the following:
As always, Buyers can choose to utilize all, part, or none of the recommendations and/or change the goals and rerun the automation.
This automation runs in real-time, when the Buyer engages it (see Custom Menu options), not in batch.
The planned sales and buy quantity can be calculated based on the clusters assigned in this process.
Throughout the process, the Buyer can aggregate each cluster's assortment by attribute to compare the depth by brand, color, silhouette, and so on (for all attributes) to their goals, last year, recent trend, customer panels, and/or social networks/Endeca search.
Once the assortment has been created by the Senior Buyer and assigned to each cluster by the Buyer, an Assortment Buy Plan can be created.
A Buy Plan includes sales, margin (and/or markdowns), inventory, and receipts.
Seed the Buy Plan using the Lifecycle Curves created earlier and the total sales potential estimated by the Senior Buyer.
Plan multiple receipts to support the lifecycle of the item.
Move inventory from one cluster and/or channel to another (that is, move all non-store inventory for a style-color to a direct channel at the start of clearance, and so on).
Plan key metrics, such as sales average unit retail (AUR), periodic sell-thru, cumulative sell-thru, and the ending period inventory on-hand. Each channel may use a different method of deriving net sales, as some channels wish to plan Net Sales where it is the result of Gross Sales minus Returns and Cancellations, and so on. These calculations are configurable, so they can be tailored to your specific approach to planning Net Sales.
Reconcile the sales and receipt plans to the original assortment strategy, to the plan created in Merchandise Financial Planning and/or to the Location Plan at any level of aggregation (such as Subclass, Class, Department and/or Channel and/or Country and so on).
Once approved, the assortment plan may be exchanged with other solutions such as SPO, Allocation, Merchandise Financial Planning, Item Planning (IP), Product Lifecycle Management, and so on.
This plan can be revised and re-trended throughout the lifecycle of the style-color and utilized in the following in-season and post-season analysis process steps.
There are two options for this process step:
If the Buyer is to select the sizes and prepacks, the Size and Pack Allocation workbook enables the Buyer to select the sizes and pack profiles to be carried for each style-color. This can be done at the cluster or cluster parent level and spread down to the store and then tailored there.
If the Buyer is using SPO or another solution to optimize sizes and prepacks for the style-color by store, the Size and Pack Allocation workbook gives the Buyer visibility to the sizes assigned to each style-color store combination. The Buyer is able to view the prepacks and their recommended quantities from SPO.
For more details on SPO, see the Oracle Retail Size Profile Optimization User Guide for the RPAS Fusion Client.
After performing one of the options, the Buyer can use the SPO algorithm to allocate the prepacks and/or eaches down to the style-color, prepack, store level or the style-color, size and store level (for eaches). Note the following:
This step allows the Buyer to allocate the initial receipt quantities (drops) at the store level in terms of prepacks and/or sizes. This step involves breaking the plan created at the style-color/week/store level into individual sizes and optimizing the buy quantities based on each store's size profile.
The Pack Optimization logic within AP optimizes the allocated prepacks in such a way that the store receipts are optimized for the first receipt-drop and also across the entire life of the style-color.
This information can also be shared with an Allocation solution and or order execution solution such as a merchandising system (in near real-time or in batch).
This step is optional.
There are two main goals for this process step:
Evaluate the performance of the assortment to plan and make corrections as needed once the assortment is utilized for the floor, site, application, network, and so on.
Evaluate the success of the assortment using multiple lenses and perspectives.
The key steps for this process include the following:
Perform Extend/Markdown/Drop analysis where the Buyer and/or Planner reviews performance to date along with the re-trended sales plans by style-color and cluster to determine whether to perform the following:
Extend the sales life of the style-color.
Mark down. Continue or change the existing clearance plan for the style-color and use Oracle Retail Clearance Optimization Engine (COE) to determine the appropriate prices.
Drop the style-color earlier than planned.
Do nothing and continue the existing plan.
Evaluate current, planned or historical sales, margin/markdown and inventory performance to plan, last year, and recent trend by:
Style-color, subclass, class, and so on
Calendar increments
Look
Cluster
Attribute
Fulfillment type
Direct-selling layer (viewed, put in basket, transacted against, returned, and so on)
Customer segment/group
Project current and planned or review historical inventory breaks by style-color.
Review current or historical style-color inventory breaks, or actual breaks, by size.
Evaluate accuracy of the sales curves used to seed the Buy Plan.
As the Senior Buyer and Buyer are building the assortment, their decisions can be shared with a merchandising system, so that styles and style-colors created/updated in Assortment Planning can be shared automatically with a merchandising system. AP refers to this functionality as Slow Item Build.
If this capability is utilized, Merchants no longer have to set up the style and style-colors twice (in both AP and a merchandising system). Styles and style-colors can be set up in AP only and allowed to be shared with a merchandising system. This functionality covers creating the style numbers, style and style-color descriptions, assignment to a department, class and subclass, as well as creating/updating the product attributes for the styles. For the GA version of AP, the following attributes are shared: brand, collection, color, fabric, lifestyle, occasion, pattern, price tier, seasonality, silhouette, sub-brand, and vendor (supplier).
This process is available when creating styles and/or the style-colors (as part of the Fill the Shopping List and Build the Wedge processes).
For more information on setting up the Slow Item Build process, see the Oracle Retail Assortment Planning Implementation Guide.
Some retailers may use a Product Lifecycle Management (PLM) solution to manage the go to market process, where the PLM solution stores all of the potential assortment options. In this scenario, Senior Buyers use AP to store the choices they select from the full spectrum of options offered by the PLM solution. There are many appropriate models for interaction between PLM and AP (one model is shown in the following figure). This version of AP can be configured to support many of the PLM and AP process models that you are likely to utilize.
The following figure shows one example of a PLM and AP process model. Others are also supported.
Assortment Planning provides visual planning capabilities. These capabilities are designed to enable merchants, buyers, traders, planners, and so on, to create assortments/assortment plans and to navigate the solution in a way that is consistent with how a customer shops the assortment, visually.
Visual means the images of silhouettes, fabric or color swatches, preliminary sketches and finished product images throughout the planning process. At the beginning of the process, only silhouettes or sketches may be available and then by the time the floor-set occurs, finished product images can be used. How these images are used is fully configurable so that you can tailor the visual planning capabilities to how you wish to view the assortment throughout the process. For more information regarding visual planning (supported image file types, how to set it up, and so on), see the Oracle Retail Predictive Application Server User Guide for the Fusion Client.
There are five key visual planning use cases in this release:
Images as column or row headers
Images as dimension attributes
Images as measures within the view
Image pop-up window
Time-phased visual view of the assortment
Some steps of the Assortment Planning solution require certain custom menu options to be run. Custom menu buttons are located above the top right corner of the content area for some workbooks. Custom menus are specific to the views under the steps available in different tasks. Figure 1-13 shows an example of custom menu options.
Procedures for using the custom menu options are provided, where applicable, throughout this guide.
Before using Assortment Planning:
Review this User Guide, so that you understand the step-by-step assortment process.
Become familiar with the RPAS Fusion Client user interface. There are features you need to use in the Assortment Process such as sorting, filling, navigating the process steps, and loading/committing your work. If you need more information on the user interface, see the latest Oracle Retail Predictive Application Server User Guide for the Fusion Client.
