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Articles
Beyond Product Planning: Store Planning and
Clustering
(Part III of a series) (cont.)
How do you decide
which method to use?
By the purpose you have for the plan.
Use the passive approach when you intend
to use store plans to support allocation or in
tracking store plan against actual results.
Use active store
planning:
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to
develop comp (existing) vs. new-store
projections |
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to develop
store budgets |
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to support
assortment planning |
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to help derive
accurate bottom-up chain-level merchandise
plans |
Store groups or clusters can be developed:
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By
categorizing stores based on key
attributes, such as weather zones (warm
vs. cold); location (region, strip vs.
mall, downtown vs. suburbs); or store size
and layout |
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By
analyzing demographics to define customer
patterns such as income, age, and
ethnicity, or customer shopping patterns |
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By applying
statistical analysis and forecasting to
develop dynamic groups based on
performance (volume) and facilitate
shifting stores from one cluster to
another for an upcoming season or over
time |
New methods based on data mining are also
being considered for developing store clusters.
Whatever the grouping criteria or method,
this kind of information can be especially
important for supporting allocation or
assortment planning as well as micro marketing.
Because store planning
and clustering can require a lot of effort, use
the passive method if you only want to support
allocation or track plan vs. actual.
You can put your effort into developing
the right algorithms.
If, however, you want to do more with the
store plan, such as make comp-store projections
and or bottom-up planning, you’ll have to use
the active approach.
In other words, know where you’re
headed before you decide how to get there.
This article was first published for
Retek
Inc.
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