S&K Famous Brands selects SPIN® Retail Analytics

Introduction

S&K Famous Brands, Inc. is a retailer of value-priced menswear operating 239 stores in 27 states reaching from the East Coast to Texas and from Maine to Florida. S&K offers a complete line of men's apparel generally priced 20-40% below department store and specialty store regular prices. Additionally, S&K strives to provide superior customer service in the highly competitive retail environment for men’s apparel.  Insuring that their customers can always find what they are looking for, in their size, and at a fair price are two of the ways that S&K tries to meet those objectives.

The management team at S&K recognized that in order to continue to improve upon those objectives, they needed to upgrade their capabilities for analyzing those aspects of the business in a timely and efficient manner.  Consequently they initiated a search and evaluation of software applications in the Spring of 2003.

“Even during the history load we could see the benefits of the SPIN analytical tool.  The wealth of data that will be at our buyers’ disposal is amazing.  Additionally, the analytics available to our allocation and planning teams will enable them to spend much less time gathering data, focusing instead on the analysis and development of pro-active steps. We believe that this tool will be of great value in helping us improve both turnover and margins.”

 Janet Jorgensen

Sr. Vice-President & Controller

The Challenge Retailing is a highly volatile industry and an individual retailer’s success or failure is influenced by countless factors and trends. In order for any retailer to succeed in this competitive environment, the information necessary to identify those trends and the ability to effectively manage the various factors impacting those trends must be readily accessible. With ready access and the right tools to transform information into profitable action, the retailer will remain in front of its market and capitalize on rather than be a victim of those emerging trends.

The essential retail cycle is buying merchandise, selling merchandise and managing “what’s in between” in such a way as to minimize inventory investment and maximize rate of sale.  This may be somewhat of an over simplification of the formula but it does epitomize the nature of the business.  If we accept this characterization of the retail business, then we can conclude that the successful retailer will affect the business processes of buying, selling and managing “what’s in between” better than the competitor.

 There is a presumption that retail store locations seeded with merchandise assortments that best meet local demand will improve customer service and increase GMROI. Towards that end, SPIN’s goal is to initiate and/or collaborate in the process that will affect the desired result. 

Specifically, SPIN’s role is to provide timely analysis of target data sets and to establish comprehensive business information data sources (data mart) that can be accessed on demand.

Finding the Right Partner & Solution

After an extensive search for the best solution and the right solution partner, S&K selected the Buyer’s WorkMate® application from ITR Software.  They determined that the SPIN® module of the Buyer’s WorkMate Suite would best meet their needs as defined by their functional requirements.  Additionally, S&K felt that ITR Software would be the right company to work with based upon a number of evaluation criteria.  Among the factors considered were:

	ITR Software’ experience in working with other retailers with similar needs.
	ITR Software’ familiarity with S&K’s host transaction processing system, having already implemented other customers with the same ERP.
	ITR Software’ focus on the importance of Size Analysis.
	ITR Software’ ability to provide all of the services necessary to design, customize, integrate, implement, train & support the Buyer’s WorkMate application without having to rely upon 3rd party contractors
	The ability to create a long-term relationship with a partner that can also offer advanced capabilities for the future. ITR Software also offers advanced capabilities for Assortment Planning, PO Execution and Post-Allocation as additional modules within the Buyer’s WorkMate Suite.

Using the Solution to Solve the Problem?

As previously stated, S&K determined that they wanted to emphasize the importance of having retail store locations seeded with merchandise assortments that best meet local demand.  They believe that as they are able to enhance progress toward this goal they will improve customer service and increase GMROI. Towards that end, SPIN’s goal is to initiate and/or collaborate in the process that will affect the desired result.  Specifically, SPIN’s role is to provide timely analysis of target data sets and to establish comprehensive business information data sources (data mart) that can be accessed on demand by decision makers at all levels of the merchandising organization.

Technologies

The SPIN® application software Module of Buyer’s WorkMate is an On-Line Analytical Processing (OLAP) tool.  It was developed by ITR Software using Microsoft Visual Basic® and ProClarity® objects. SPIN is based upon a Microsoft SQL Server® 2000 Data Warehouse and Microsoft SQL Server® 2000 Analysis Services Multi-Dimensional Cube.  At S&K it is running in a Microsoft Windows® 2003 Server operating environment. The hardware consists of an HP/Compaq Application Server, HP/Compaq database Server and HP/Compaq Storage Area Network (SAN).

Expected Business Value and Benefits

The business benefits expected at S&K as a result of the implementation of SPIN include:

	More effective & timely information available from the user’s desktop.
	Utmost Flexibility and “What if” analysis will allow the merchants to evaluate the effectiveness of their promotional programs from multiple perspectives.
	Provide an ability to evaluate different pricing strategies and “packages”.
	Provide the ability to generate size contribution curves, by selling location, for any category of merchandise.
	Size contribution curves, generated by location can then be utilized during the buying process.  This capability, when used by other customers, has resulted in 10-20% improvements in sell-thru, at full price, for those merchandise departments that utilize this methodology.
	Visibility into size selling patterns will enable S&K to better evaluate their “Custom Suit” business to determine if they need to adjust their standard size ordering practices.
	Analysis of sales performance can be based upon sales at full price, promotional sales, sales of clearance merchandise, etc.  The results can then be extrapolated to include lost opportunity for out-of-stock and over-stock conditions in the target reference dataset.
	Gross Margin performance is further enhanced as a result of reduced “down the road” markdown programs as it assists with analysis for pricing decisions and the execution of markdown strategies.
	SPIN’s flexibility enables an analyst to view data graphically and in spreadsheet form.
	Able to produce statistics within or across the merchandise and location hierarchies
	The planner will be able to forecast future needs based upon SPIN developed targets and objectives via user defined formulas.
	Analyze historical performance of merchandise assortments within the product and location hierarchies at the requested level of detail including SKU-Store.
	Analyze historical performance by product and location attributes or characteristics at the desired level of detail including SKU-Store.
	Produce store location rankings and percent contribution based upon any metric or product set and build trend tables for use as a basis for allocation of merchandise to store locations.
	Being poised for the implementation of a formalized Assortment Planning process because the merchants have been able to have a better insight into the business.

About ITR Software

ITR Software Inc. is a leading provider of collaborative Decision Support, Assortment Planning, and Purchasing applications for the retail industry. With a reputation for innovative, quality products and services, ITR Software helps their customers achieve a significant and quantifiable return on investment through increased sales and margin productivity as a result of optimized product assortments in the store.

Please contact us at 856.309.2080, or visit our web site, www.it-res.com to learn more about this exciting new approach.