RPE Solutions

Integrating People, Process and IT

Retail Allocation Best Practices: Improving Inventory Productivity and Profitability

In a recent online video chat, Scott Welty, a Customer Success Executive with RPE, explores how retailers can execute a profitable retail practice through optimal inventory distribution. During a Q and A discussion, Welty poses three questions around Allocation best practices to Russell Lutz, a 20-year Allocation Consultant. Lutz has been a trusted advisor on more than 20 Allocation projects with RPE specializing in Allocation, Planning and Replenishment.

As RPE engages with retailers across the country on Allocation projects, there are three reoccurring questions often asked. Lutz shares his knowledge addressing these questions and provides examples, tips and the benefits of Allocation best practices.

For a more in-depth look at Allocation best practices, watch the interview captured on video as Lutz responds to these frequently asked questions.

  • What best practice advice do you offer retailers when designing a holistic Allocation process?
    • Allocation processes and technology must encourage allocators to be inventory analysts
    • Streamlining and automating the Allocation process promotes more in-depth analysis
    • Becoming insightful advisors can lead to improved sell through, higher inventory turns, reduced broken sizes and improved margins
  • What unique or innovative Allocation best practices have you offered to clients to optimize inventory productivity?
    • Allocations do not occur in a vacuum
    • Upstream and downstream processes need to be a critical component of the Allocation framework
  • What are the most common errors you encounter on Allocation projects and your advice to redirect the client?
    • Embrace change and give credibility to best practices
    • Focus on benefits and evaluate the “nice vs. need” to have
    • Be willing to shed traditional processes
    • Focus on the business value along with functionality
    • Change system architecture only when needed to minimize cost and risk
    • Determine a detailed design up front

While planning an Allocation project, working with a trusted  retail consulting advisor and following best practices will help deliver a successful outcome resulting in optimal inventory distribution. A project that is deployed properly can lead to  improved productivity and profitability.