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Figure fixers

Merchandisers' love for Excel spreadsheets can turn sour as the files grow bigger and data gets lost in the muddle. Penelope Ody seeks out some alternatives

Microsoft Excel is the undisputed king of data analysis in the workplace. Easy to use and highly adaptable, there are even people who write reports on a spreadsheet rather than in Word. But the problem is that spreadsheets are just a little bit too adaptable. Everyone's spreadsheets are different, and anyone can massage the numbers to support their argument.

"It's one of the most common reasons why we get called in," says Richard Nicholas, sales and consulting manager at software solutions group TXT e-solutions. "Excel becomes totally unwieldy and the spreadsheets start to fall over. They need a lot of IT support and companies suddenly realise that a major part of their decision-making depends on spreadsheets that only one person understands."

Spreadsheets may be easy to use, but they can be time-consuming, often depending on manual input and interpretation, rather than drawing on both real-time and historic data to predict consumer demand and sales forecasts.

TXT's systems - used by the likes of Tommy Hilfiger and Gucci - are based on the premise that merchandising and forecasting tools should be totally integrated. Historical data about, say, sales of a wool jacket can be used to interpret likely performance of the current range based on real-time inputs of sales data. Music firms such as Entertainments UK use the system to predict likely sales within an hour of a new chart release hitting stores, to ensure rapid reordering if necessary and to avoid running out of stock.

However, Nicholas accepts that the fashion business is not as formulaic. "The aim is to automate what can be automated, so merchandisers can spend more time on analysis," he says. "You can start by categorising the product range, which can give an automated forecast of sales when similar lines are introduced in subsequent seasons. It makes pre-season allocation more efficient, and more adaptable to sales patterns in each individual store."

German fashion chain S.Oliver, for example, is implementing TXT's forecasting and replenishment planning systems for its never-out-of-stock (NOOS) range. This comprises 4,600 SKUs that will be planned on a weekly basis, with likely sell-out dates automatically calculated to ensure new stock arrives in time.

In South Africa, the Foschini group, which sells fashion, accessories and homewares, is also using the latest merchandising tools to match customer demand to product mix in different markets. The company trades in Botswana, Swaziland and Namibia, as well as South Africa. "We have to cater for the needs of different sizes and ranges in various regions for different market sectors and weather conditions," says Foschini chief information officer Brent Curry.

Foschini has implemented a merchandise management solution from supply chain specialist JDA across its 13 trading divisions. It has also rolled out JDA's Size Scaling system in its 160-store Markhams menswear chain. This analyses sales by size for each store and suggests the optimum ratio to maximise sales in that store. The retailer plans to roll out the solution across the rest of the group this year.

"The system ensures that the right quantities of all sizes are delivered to the appropriate store," says Foschini merchandise system executive Baziel Barends. "It is possible to manage with Excel if you have only one store, but with more than 1,000 stores it's impossible."

JDA also produced the Arthur planning and allocation tool, which dates back to the 1980s and is widely used by UK retailers. One of the latest users is the Phillips-Van Heusen group, whose brands include Kenneth Cole and Calvin Klein. "We've increased our in-stock rate from about 90% to closer to 97% with no significant increase in inventory," says Jim Buhler, vice president for planning and allocation.

Knowing merchandisers' fondness for Excel, many IT vendors now ensure that data can be converted into the familiar spreadsheet format. TXT e-solutions has adopted this 'if you can't beat 'em, join 'em' approach. Its forecasting tools resemble Excel, making it easier for merchandisers to switch to the new platform. "Retailers like Excel and are often reluctant to give it up," says Nicholas.

Nigel Illingworth, product director at retail IT firm Retail Assist, agrees. "Excel provides a comfort zone," he says. "Everyone knows how to use it. With more complex planning tools you may start out well, but over time staff turnover tends to degrade knowledge and usage of the system and spreadsheets creep back in again."

But he says this is not necessarily a bad thing, because most planning tools do not fit with the culture of fashion buying. "Planning tools can be too rigid," he says. "Merchandisers are willing to accept merchandise management systems (MMS) for purchase orders and reports on financial and sales systems. Buying departments work independently."

Retail Assist acquired the Merret supply chain solution as part of a strategy to build a comprehensive retail IT system. The Merret merchandising system was developed about four years ago with Burberry, which uses the system across Europe. Other Merret customers include Harvey Nichols, Principles and Warehouse. Like TXT, Merret has made it possible to input data via the Excel spreadsheet and output it in similar formats.

Merret is another of the new generation of real-time systems. At Harvey Nichols, for example, it gives real-time visibility into stock availability of designer lines across all stores, improving inter-store transfers. The system includes in-season planning, budgeting and forecasting tools, but not pre-season planning.

While many buyers may prefer to work in isolation, it might not always be the best option given the restraints of store space, delivery schedules or promotional plans. Visual merchandising tools that take digital pictures of the buyer's selection and put a 3-D image of a store on a computer screen can help to rein in some of the more erratic flights of fancy. Applications from IT companies Compass and Fashion Yield have been offering this, but it is only in the past few years that fashion retailers have started to recognise their value.

The original Fashion Yield system - dating back to the late 1980s - has now been developed as Mockshop by Dutch firm Visual Retailing, whose customers include surf brand O'Neill. In the UK it is being marketed by Senso. Senso joint managing director Emma Tilley originally sold the Fashion Yield product in 1988. "The mentality of users has changed dramatically since then," she says. "Fashion retailers are embracing technology and we're seeing a lot of interest in Mockshop."

Tilley picks out three key uses for visual merchandising tools such as Mockshop. First, it can be used for basic store layout development and planning; second, it enables buyers and merchandisers to see what a range will look like in-store as they make their selections; and finally, it works as a visual merchandising tool.

"The system is starting to be used in the product development cycle," she adds. "Buyers can fit the range into the store as the concept develops." Senso is offering this function with small projects - about 1,000 SKUs - typically costing about £5,000.

These tools allow merchandising teams to move beyond the spreadsheet comfort zone. And they are not confined to the big boys. Last year, accountancy system Sage - popular among small- to medium-sized businesses - launched a retail MMS package based on Microsoft's .Net platform, making it yet another system that is easy to link to the much-loved spreadsheets.

While traditional MMS can handle basic paperwork and reporting, today's real time and optimisation techniques can improve stock control and allocation with instant feedback on customer demand, helping to cut down on under-stocks. A little visual imagery early in the product development process can also help combat some of those expensive mistakes and anguished calls from stores about where on earth to hang the latest deliveries.

- There is still time to book your place at Drapers' Achieving Merchandising Excellence in Fashion Retail Conference on September 19 at the Radisson SAS Portman Hotel in London. Speakers include Fenwick trading director Hugo Fenwick and Harvey Nichols head of womenswear merchandising John Scofield. To find out more and to register, go


Arnotts, the Republic of Ireland's oldest and largest department store, is in the midst of a major expansion programme at its Henry Street store in Dublin. As part of the upgrade, it is implementing systems from IT firm Oracle Retail and revamping its merchandising and supply chain operations.

Replenishment has now been moved off site. Operations are contracted out to a third-party logistics provider, with the old stockroom space used to increase sales areas. Oracle's merchandise optimisation tools have been used to help revise stock densities. In-store stock levels are now starting to be aligned to customer demand, which is enabling better stock turn and therefore a more varied product mix and greater flexibility for promotions planning.

Last year Arnotts began implementing the new merchandising approach in bed linens and womenswear. The roll-out has continued, and the entire store will be using the tools by the end of this month.

Director of information systems Paul Dickson says: "Stock now comes in ready to go on display, and we have more staff on the shop floor because they aren't in the back room sorting out the latest delivery."

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