The TEST of TIME

It’s the heart of the launch of the SPRING FASHION season in North America – and HOW INSIGHTFUL is here to help you understand your premium routing strategy. When you look at the products you are receiving, and how they are flowing through your distribution network, you can help inform your transportation and replenishment systems of the need to expedite or not.

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Is FASTER always BETTER?

We have all seen the Xmas Trees in Costco in July and the swimsuits in February, but just how important is the launch of the season for you? Is it worth the hundreds of thousands of dollars in expediting costs and supply chain disruption to gain an extra 7-10 days at the beginning of the season? Intuition says that in a short season, they more days you have to sell increase your chances of selling for that season. That assumes that the demand for that item in that area does not have a ceiling, and that is what you want to determine.

You would never intentionally short a store location selling time on a seasonal item, that would be a bit foolish to attempt. However, you do have the benefit of a large and diverse country of Canada or the United States to work with, and the regional geography will allow you to time test your deliveries without having to do anything differently.

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Sell-Through and the Furthest Store

As product arrives at your distribution facilities, you likely have them expeditiously moved out as fast as possible; dwell is not a desired state of seasonal goods. If you assume your distribution facility is centrally located in Canada, IE. somewhere in Southern Ontario, stores in the GTA likely receive this new product long before any remote stores like Vancouver or Halifax. What you have a natural distribution timing gap that you can test the effects of. If early delivery is a key factor in total sales, then you can easily measure some data points to determine this effect: Take First Receipt Day, First Sale Day, and First REPLENISHMENT Date (if applicable) and start to do some calculating.

If in fact, early receipts are correlated to higher sell-throughs and higher TOTAL SALES, the stores nearest your facility, with the earliest FIRST RECEIPT DATE, should be your highest sell-through and should also be First Replenished stores. The lift that you get from early receipts should be clearly measurable and higher than that you experience at stores with later receipts. Those sales can be uses to set a “baseline” for what your premium routing costs should cover. You can add in a Satisfaction factor if you would like, but if nothing else, your costs to get product to store early should at least be offset by an actual sales rate increase you obtain by being in market early with the product.

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Insights that Drive Spend

In a world where costs are spiraling up and revenue streams are harder to come by, you want to use every last dollar you have to its most effective. Buring up supply chain money of efforts that are not measurably going to change your customer’s experience should be scrutinized to the most intense degree to rationalize their execution. It may “feel” right to do things, but using a tool to test their merit is a sure way to profitability. ?

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