More than 20 years ago, James Khezrie began to wonder why urban residents had to travel to suburban malls to buy their favorite clothing brands. Inspired by a vision of bringing fashion and a high-quality retail experience to urban neighborhoods, he opened a store on New York’s Delancey Street and named it Jimmy Jazz, after his favorite song by the punk rock group The Clash.
Khezrie’s insight was a good one, and the Jimmy Jazz concept answered a need in many urban neighborhoods. Today, the company owns more than 170 stores that sell clothing and footwear in 20 states, as far west as Austin, Texas, and as far north as Racine, Wis. It also operates an e-commerce site at jimmyjazz.com.
Staying in front of the trends
Because Jimmy Jazz customers are so fashion conscious, planning for store inventory is “very trend specific,” as company president Robert Shapiro explains. The company’s buyers are continually looking out for fashion trends on the streets, in the subways, in the clubs, in the malls and on TV and the Internet. “They have to have guts and a sense of style, and the eagerness to work hard and put it all together,” Shapiro says. “Their job is to tell us what the next trend will be and make sure we have it before that.”
Translating the buyers’ observations and intuitions into specific plans for specific stores is a complex undertaking. Until recently, the planning process, which was largely manual, was time-consuming, slow, and error prone. Even though all the data required was available on the company database, the analysis and reporting systems weren’t flexible enough to meet planners’ needs.
Instead, buyers’ assistants logged information from the database into multiple Excel spreadsheets, and once a month each division spent two full days in budget meetings, poring over the spreadsheets and deciding what to buy. Because the divisions were looking at monthly snapshots, they had difficulty reacting quickly to fast-moving trends by adjusting their buying and markdown decisions; they were always playing catch-up.
Shapiro says, “We knew what the trends were, but we were only able to get there once a month; then we’d agonize over it for three weeks and have to get there again.” Worse still, this tedious process left little time for analysis or strategic thinking.
Getting ahead with advanced planning
Moataz Shalaby, the company’s vice president of planning, told Shapiro that Jimmy Jazz had outgrown its planning system. He recommended purchasing an advanced, streamlined and flexible system that could answer more questions, more quickly and allow the company to stay on top of fast-moving trends.
The solution selected in 2012 was a suite of applications from 7thonline: Merchandise Planning, Open-to-Buy and embedded Business Intelligence. In combination, these applications allow the company to plan and track in-season sales and inventory with demand forecasting; to forecast and reforecast by category, class, division or SKU, by store or chain, by week; to plan at the vendor level; to access multiyear historical data; and to slice or dice the data with ease. “It’s like going from checkers to chess to Connect Four,” says Shapiro.
The immediate goal of implementing the new solution was to shorten the divisions’ monthly budget meetings from two days to one — and that goal was met quickly. Instead of comparing multiple spreadsheets, planners and buyers can view all the information they need in one place, including sales, inventory, forecasts, projections and historicals.
Saving time and effort is only a small part of the benefit of the 7thonline solution. More important, it allows the company to make better and more timely decisions — decisions that might not have been intuitively obvious without the new analyses — and to take advantage of new opportunities. For example, Shapiro mentions a winter clothing category in which the company has been overbought for the past six months. “It’s up to the buyers to justify that, and up to the general merchandise manager and merchandise manager to put the brakes on them,” Shapiro says.
The reports showed, surprisingly, that sales in the category were 100 percent higher than in the previous year and margins were very acceptable. “We actually have open to buy for January and February in this category in the northern stores,” he adds. The category’s season is finished by April, and by then, he says, “we’ll be back to what the ending inventory should be. The goal is to have a reasonable finishing inventory while hitting the sales plan.”
Describing the new information the 7thonline system makes available for planning, Shalaby says, “The system updates daily, so we get to see at any time what’s on order for every month. Any buyer has access to see what’s trending by vendor. The system forecasts into the future whether there will be a small or a big gain and how much of a risk we’re taking.”
Shalaby is particularly enthusiastic about “what-if” scenarios that planners and buyers can run, in addition to the base scenario. “If we like a scenario, we show it to the buyer — and they may have their own scenario, too — and when we reach agreement with them, we can save it as the new plan.” The implications of the revised plan flow automatically into the open-to-buy sheet.
Since going live with the system in the fall of 2012, Jimmy Jazz has succeeded in reducing its inventory levels and increasing its sales and sell-through rates. “We’re very satisfied,” Shapiro says of these results. “Reducing the time to spot trends is the greatest value for us.”
Masha Zager is a New-York based Apparel contributing writer specializing in business and retail technology.