Centric Software, a global specialist in 3D design software, 3D digital mock-up and Product Lifecycle Management (PLM) solutions, has developed Centric Planning, an AI-powered retail planning solution for omnichannel.
Guess, the US fashion and accessory brand, has started using this solution during the pandemic and registered a significant benefit from it.
Centric Planning is designed to help companies to plan, design, develop, source and sell products such as apparel, footwear, sporting goods, furniture, luxury and more, to achieve strategic and operational digital transformation goals.
Brands and retailers continue to struggle with the increasing pressure of shorter assortment cycles, growing omnichannel and SKU complexity. Until now, most companies rely on spreadsheets with severe limitations, or on rigid, expensive legacy planning solutions not built for the omnichannel era.
To maximize product sell-through, optimize inventory and reach product margin goals, merchandisers, buyers, planners and allocators are in urgent need of tools to deliver real-time insights and drive impactful decisions based upon accurate forecasts and visibility.
Despite such a difficult situation, some brands have started testing Centric Planning and experienced a significant benefit.
Guess, for instance, has started testing Centric Planning during COVID times and registered an increased in its operative margin. “Before COVID, we had a 5.6% operating margin at the end of fiscal year 2020. We closed 2021 at 12%. It is a huge improvement in profits,” said Daniel Botey, vice president of Global Inventory Management at Guess Europe Sagl. “If we had had a lot of inventory, we could not have done it. Centric Planning has been an enabler to truly enable our strategy and increase our profitability in very significantly,” he added.
“Centric Planning future-proofs retailers,” explained Simone Pozzi, VP Planning BU, Centric Software. “It is an AI-driven solution that leverages advanced analytics and forecasting for enhanced decision-making and optimized SKU and omnichannel management. Its cloud-native architecture enables high-speed processing and powerful performance, even when handling large volumes of data. It’s flexible, forward-facing and designed by retail experts to maximize user adoption and value delivery,” added Pozzi.
Shortly before COVID, Guess had implemented a new strategy aimed at increasing operating margins, driven by a desire to elevate brand quality, reduce promotional activities, react more readily to changes in the marketplace, and better satisfy the consumer, but the right technology platform had to be found.
Guess has 25 product categories in more than 100 countries, with a thousand directly operated stores and 1,600 stores in total. The company adopts an omnichannel business model, selling through different touchpoints such as e-commerce, retail and wholesale, the latter being particularly important in Europe, where Guess operates a network of about 4,000 wholesale customers.
The company used Excel spreadsheets to manage purchasing and merchandising. Said Botey: "We work in about 30 countries in Europe. The merchandisers would each send an Excel sheet with a different format, listing the products they required and those that were not relevant to their country or market. It was a complicated, time-consuming process for the merchandisers, but also for the buyers, who had to compile all the information to try to meet the demands of the markets."
"We needed a planning tool to gather all the data in one place and generate alternative views of the same image. We handle different currencies, different customer tastes, different trends in each country. All these geographic variables, plus the vast assortment and large number of SKUs, made life very, very hard for the planners,” he added.
Then came the pandemic. Offices closed, collaboration became difficult, and existing planning problems became magnified. With lockdowns and reopenings occurring at different times in each country and region, sales forecasts were fluctuating widely.
Therefore, the company restarted the project during the first lockdown.
Guess took the step to adopt Centric Planning as it intended to respond faster to changes in markets, bring high-end product lines back in house, reduce excess inventory and discounts through smooth inventory management, as well as wanting to increase margins.
With constant store closures and reopenings, it was impossible for teams to follow original plans and forecasts. Outdated systems prevented the transfer of inventory from one channel to another at a time when e-commerce was experiencing an explosion.
Supply problems during the pandemic exacerbated existing concerns. “Thanks to Centric Planning our purchasing time has shortened. Our supply chain management team asks us to issue the purchase order in advance to allow more time for production and transportation. Centric Planning is a key tool for getting product to the right channel on time,” he explained.
Describing the typical end-of-season sales process to clear inventory for the following season, Botey speighed: "This is one of the aspects with the biggest [negative] impact on our margins. With Centric Planning we can limit promotional activities, and this directly translates into higher margins."
Through the use of Centric Planning Guess also noticed other benefits. "Although we wanted to react better to customer demands and adapt nimbly to changes in the market, we also noticed the reduction of manual work and a drastic shortening of planning time, from one month to one week. In addition, it is now easier to update range or assortment planning, and the marketing plan, as well as the ability for country managers to work directly within the solution to select their favorite collections," Botey explained.