Affinity Logic wins R3m assortment planning deal from Massdiscounters

Massdiscounters, which includes the Game and Dion retail chains, has appointed Affinity Logic, the retail services and solutions arm of the UCS Group, alongside its current outsource partner, Comparex, to pilot, tailor and implement the Arthur Assortment Planning tool and the related upstream processes for its clothing division.

"Affinity Logic will take the lead in the implementation, providing thought leadership, program management and application expertise around the tool, which is part of the JDA Arthur suite of products. Comparex will handle the infrastructure component and provide additional application and technical expertise," explains Jane Canny of Affinity Logic.

The total deal is worth approximately R3 million over 13 months and includes the pilot and implementation of Arthur Assortment Planning and the related upstream processes required for successful Assortment Planning. It covers assortment planning for the clothing division of the Dion and Game chains throughout SA, the rest of Africa and the Mauritian stores.

Jay Currie, Systems and Supply Chain Director at Massdiscounters, states: "We chose the Affinity Logic team because of its good track record in producing practical and well thought out retail solutions. Affinity has people with credible retail experience that have built trust with Massdiscounters through successful engagements and this counted heavily in their favour when awarding the assortment project."

Currie adds: "Since Massdiscounters has already implemented the Arthur Merchandise Planning module to facilitate merchandise planning, we wanted to add the Arthur Assortment module to optimise the process of merchandise selection in order to target customer`s needs as well as our corporate financial goals."

Currie explains: "Retailers face growing costs associated with getting the right goods to the right place at the right prices at the right times. The decisions around these issues have historically been made based on a combination of experience and instinct, but with the increase in choice available today it has become impossible for merchandisers to manually assimilate all the detail - style, colour, size, vendor, price point by store attribute and more."

Assortment Planning is a tool which assists a retail organisation to manage the selection of merchandise at an item level and to fine-tune the merchandise mix by store or store group within the context of the merchandise budget and the store plans, in order to meet customer requirements, prevailing trends and the look that the merchandisers want to create in the store.

Canny continues: "At a more sophisticated level, Assortment Planning enables retailers to customise their merchandise offered by store, since customers at different geographical locations have different attributes and buy and react very differently to product assortments. Moreover, the needs of customers differ by region. By applying Assortment Planning scientifically, retailers can maximise the potential of their retail estate, ensuring that the stores are individually profitable and can be measured accordingly.

"Using Assortment Planning, each store can stock what sells in its region and yet remain in line with the retailer`s overall identity strategy so that customers get to know what experience they will have when shopping in any store belonging to that retail chain," Canny elaborates.

She cautions: "The objective is to keep the initial implementation simple and relevant and only introduce increased complexity as buyers become accustomed to it."

According to Canny, the implementation will be completed within five months, the first half of which will involve putting the upstream planning processes for all the clothing departments in place, followed by a three-month pilot in one of the clothing departments in order to completely test the system. Thereafter the module will be rolled out to all the departments within the clothing division.

"Massdiscounters will run its manual processes in tandem with the pilot, but the buyers will actually begin using the product during the pilot period," she says.

The improved upstream planning processes will ensure that relevant quantitative financial and width and depth targets are set against which the assortment is built, balanced and tracked.

The implementation will begin with analysis and design of the system to meet Massdiscounters` specific requirements, which will be followed by the implementation. Canny comments: "The most important aspect of the entire deal for Massdiscounters is to achieve business improvement. While there is some immediate benefit, the full business benefit of the tool will be achieved the following year, when it will help drive a step change based on a full year of historic sales data and trends."

Canny comments: "The Arthur suite is the market leader in merchandise planning - it dominates the global planning market and is the most widely used planning tool, with over 300 customers around the world including Wal-Mart."

Currie concludes: "Affinity Logic was the only choice for this project as the sole implementers of the JDA Arthur suite of products in SA. In addition, their in-depth retail expertise and thought leadership made them the obvious choice."