Fashion retail & e-commerce : Pre Season & in-season planning

Pre-season and in-season planning are critical processes in the fashion industry, enabling supply chain professionals to effectively manage inventory, forecast demand, and respond to market trends for their business.

Pre-Season Planning

Pre-season planning typically occurs six to twelve months before a new selling season. It includes-

• Merchandise Financial Planning
• Assortment Planning
• Size/Pack Optimization

Merchandise Financial Planning

Merchandise Financial Planning (MFP) is the strategic process of budgeting and allocating financial resources for purchasing inventory, managing assortments, and optimizing sales to achieve business objectives in the retail industry. It involves anticipating demand through forecasting and planning inventory needs to meet the forecasted demand while aligning with the company’s financial goals.

The goal of MFP is to optimize inventory investments, enhance sales forecasting accuracy, and improve overall profitability by aligning financial resources with consumer demand and merchandising strategies.

Assortment Planning

Assortment planning is the strategic process of selecting the optimal mix of products across different locations, channels, and seasons and determining which specific products, product categories, styles, sizes, colors etc. to include in the assortment based on factors like profitability, brand positioning, shelf space constraints etc.

The key objectives are to maximize sales, profitability, inventory productivity, and customer satisfaction by offering the right product assortment tailored to each market segment.

Size/Pack Optimization

Size or pack optimization, also known as prepack optimization, is the process of determining the optimal pack sizes or configurations in which products should be shipped from distribution centers to retail stores.

The key objective is to minimize total supply chain costs related to handling and inventory and improve inventory productivity with right pack sizes.

TrueGradient flow chart for pre-season and in-season planning

In-Season Planning

In-season planning focuses on managing and adjusting plans during the current selling season. It includes-

• Initial Allocation
• Replenishment
• Exit Strategy / Markdown

Initial Allocation

Initial allocation in fashion retail refers to the process of pre-allocating planned quantities of merchandise to different locations/channels based on anticipated demand, local preferences, and trends, before the selling season begins.

The goal is to ensure the right products are available in the right locations to meet localized customer demand from the start of the season.

Replenishment

Replenishment in-season for fashion products refers to the process of restocking inventory during the selling season based on actual sales data and demand trends.It involves monitoring real-time sales data and inventory levels during the season to identify fast/slow selling items and locations.Based on this analysis, additional replenishment orders are placed with suppliers to restock high-demand products at specific stores/channels.

The goal is to maximize sales by ensuring high-selling items remain in stock, while minimizing overstock of slow movers.

Effective in-season replenishment can improve inventory productivity, reduce markdowns, and boost revenue and margins for retailers.

Exit Strategy / Markdown

Markdowns are price reductions implemented by fashion retailers to clear slow-moving or aged seasonal inventory before it becomes obsolete.

The aim is to boost sales velocity, maximize revenue over the product lifecycle, and maintain healthy inventory turnover. Markdowns can be applied in-season through progressive discounts or at the end of a season.

🌟 Are you a fashion industry supply chain professional? Reach out to discover how TrueGradient can help you create pre-season planning strategies.

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