Product Allocation Software

What is Product Allocation Software?

A retailer’s most important and capital intensive physical asset is product inventory, and - with the aim of ensuring that the right product is in the right place at the right time - many leading retailers are using product allocation software.

Achieving the aim of appropriate product placement results in higher sales and customer satisfaction levels, less out-of-stocks and lost sales, and fewer markdowns and promotions to reduce surplus inventory.

However, ensuring that the right products are where they need to be in order to meet customer demand can create a major problem for many retailers. Fortunately a simple solution is at hand in the form of product allocation software.

The Challenge of Product Allocation

product allocation software

Previously, inventory was often dispatched to stores in large quantities at the beginning of each season, with the hope that it would sell before the start of the next season to allow for the introduction of new products.

However, in today’s retail environment, the challenge of product allocation is becoming more complex due to the multiple retail channels that consumers have at their fingertips, and the influence of online advertising and social media.

With product allocation solutions, retailers have the opportunity to allocate products based on forecasted demand and current stock levels, react to consumer-buying and store-selling behaviors, and replenish based on actual demand once their products start to sell.

Product Allocation Based on Demand

One of the worst things that can happen in the retail industry is that a customer comes into a store to buy a specific item and finds that product out of stock. The disappointment felt by the customer can be far worse for the retailer, who in addition to a lost sale, might have permanently lost a customer.

Product allocation solutions help to avoid this mishap by infusing customer demand into retailers’ allocation calculations. With product allocation software, accurate allocations are calculated incorporating forecasts, replenishment orders, as well as real-time POS data, to ensure an appropriate inventory of product is distributed across distribution centers and stores.

Accurate product allocation solutions are critical to help retailers determine the optimal mix of inventory to dispatch to stores, as well as knowing when adopt a “hold-back” strategy. When actual sales data is available, retailers will be aware of what products are selling where, and can then distribute “held back” product inventory from distribution centers to where it stands the best chance of being sold.

Product Allocation Solutions & Replenishment Software Working Together

Not only are product allocation solutions vital in the accurate distribution of inventory to stores; replenishment software also has a part to play in the successful execution of a merchandising plan.

Product allocation solutions deal with the beginning of a merchandise assortment season, and are used to get initial inventory levels into the appropriate channels. Thereafter, replenishment software can take over and “pull” inventory stored in distribution centers based on actual sales data.

Once the performance of a product or category is established, replenishment software ensures that product is available in stores to meet on-going demand. Best-in-class replenishment software will result in improved inventory turns and in-stock availability - avoiding the scenario of the disappointed customer and more disappointed retailer.

JustEnough’s Product Allocation Software

JustEnough’s Product Allocation software takes the guesswork out of allocating products to stores where they have the best chance of selling. JustEnough forecasts customer demand, considers current stock levels at each location and what has already sold. The system then calculates the optimal inventory to dispatch to each store and how much to reorder across the supply chain.

With an Allocation Review and an Allocation Rules Management tool, the Product Allocation software allows retailers to easily manage all aspects of the process. The allocation rules are defined by the unique needs of the business - sales and stock data, promotional, full price or markdown sales or any other combination of factors to determine exactly where to allocate inventory.

Planners can review the results produced by the Allocation Review based on the pre-defined parameters and then adjust according to their knowledge of geographical and seasonal variations, fashions and staples. This function has been shown to enhance productivity, improve turnover and reduce spend.

Benefits of JustEnough’s Product Allocation Software

  • Less likelihood of stock-out scenarios
  • Enhanced customer experience
  • Increased inventory turnover
  • Reduced overstocking of product
  • Less markdowns and loss of profit
  • Improved planner productivity

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