MarketMAX Helps VF Corporation Take Vendor-Managed Inventory To The Next Level

VF Corporation recently launched a major initiative to introduce new value-added sales automation and micro-marketing across the company. The objective is to work with retail partners to help them learn more about their customers and to tie financial and merchandising planning into a seamless system to improve profitability across their organizations. Called the VF MicroMarketer, it is a Retail Floor Space Management (RFSM) initiative that relies heavily on MarketMAX™, Inc.'s merchandise planning solution.

VF began by using the MarketMAX IMS™ merchandise planning and analysis tool in its largest division, jeanswear. But soon it became apparent that VF's aggressive plans for RFSM required an even more sophisticated solution. In response MarketMAX provided MarketMAX IMS/Enterprise™, a comprehensive, enterprise-wide merchandise planning software solution. Through the innovative integration of market and retailer-specific information sources, coupled with comprehensive data from supply chain and replenishment systems, VF offers enhanced merchandise management capabilities to its retail partners.

MarketMAX IMS/Enterprise enables VF to provide its customers with iterative merchandise planning for entire product categories, even non-VF products, by directly linking product category financial goals with assortment planning, clustering, store floor and space planning, and category management.

The comprehensive merchandise management and assortment planning solution is a key tool in VF's efforts to translate high level geodemographic, store clustering and sales planning information into Develop In Store Presentations (DISP) for VF's retail partners. VF and MarketMAX are the first to reconcile in-store displays with sales and merchandising planning and replenishment.

"All of the tools were available to us in the past," commented Eric Crawford, VF manager of retail floor space management re-engineering. "But we went several steps further and built bridges among information sources to construct a single, comprehensive merchandise planning and replenishment system that translates macro information into actionable micro-marketing plans at the cluster level."

MarketMAX Provides Key Enabling Technology and Expertise
VF selected MarketMAX because of its open data structure approach and the understanding of the business process that MarketMAX technical consultants brought to the project. This combination of breakthrough technology and business insights made MarketMAX the ideal partner for VF. The VF project marks the first time that merchandise plans have been fully integrated into financial plans in the softlines product category. VF turned to MarketMAX for support in four key areas: product assortment planning; inventory planning; minimum/ maximum presentation; and space planning.

MarketMAX IMS/Enterprise's graphical presentation format allows planners to visualize floor layouts and in-store presentations of softline products at the fixture, display and department levels. This capability enables planners, for the first time, to see exactly what overall presentations will look like with minimum and maximum product presentations by color, style and SKU. Finally, MarketMAX IMS/Enterprise's screen presentations enable VF and its retailer partners to visually plot profitability and margin performance at the cluster, store and even fixture levels.

RFSM reconciles market information, sales plans, inventory, merchandising rules and other macro data with in-store presentations, fixtures and replenishment needs. "We created an interactive system that reconciles store cluster plans with high level market and customer information. This enables retailers to effectively present apparel and achieve their overall financial goals," continued Crawford.

The first test of VF's comprehensive RFSM approach has been a great success. The project demonstrates that micromanagement of the supply and replenishment chain, when coupled with effective in-store presentations, leads to increased inventory turns. This translates into increases in the overall jeanswear category and improved gross margin revenue. Based on this test, VF is expanding RFSM to other jeanswear retail partners and will extend it to the intimates product line.

"VF is the undisputed leader of the pack in softlines micromanagement," concluded Crawford. "As a supplier, we are able to better support our retail partners because we have an unprecedented understanding of their customers. MarketMAX IMS/Enterprise helps us convert this high-level market and category management information into store-level assortments and presentations to help our retail partners improve their gross margin revenue.