Jewellery Retail Chain
Increase in Revenue, Reduction in Inventory cost and Working Capital requirement
“It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change.”
Retail Industry had comprehended this Darwin’s quote well early and thus embraced Analytics for ‘responding’ to changes, to not only survive but emerge profitably. In parallel to traditional methods of studying consumer behavior, retail analytics has now explored new realms of Predictive Analytics and Neuro-Analysis to spot the ‘Buy-Button’ inside the buyers’ brains!
We had the opportunity to develop and successfully implement such predictive model for one of our clients who approached us with the problem of Inventory and Cash Flow Management and non-growing sales.
As seen in most of the capital intensive retail businesses, the client was finding it difficult to have stock of products in demand and less / no stock of products which had minuscule demand or no demand.
A leading Jewellery Retail Chain.
We developed a product to predict potential sales and products which would contribute to it.
We broke down the process in following parts:
Revenue Framework, Profitability Framework and Risk Framework
• Revenue Framework related to Sales and Marketing of Jewellery Retail Chain. After analysis of their historical sales pattern (Customer-wise, time-wise, product-wise and region-wise), we identified certain pivot metrics and re-iterated our analysis algorithm to formulate an improved sales funnel.
• Profitability Framework majorly included production and operations of the retail chain. We studied how much cash was tied up in the form of unsold jewellery and realized that some of the resources spent in inventory were eroding profitability. We thus suggested convenient measures to predict inventory levels and improve operational efficiency.
• Risk Framework dealt with tracking and reducing potential dangers of the retail chain related to Cash Flow, Debt / equity and Interests. We also studied churn rates of customers and thus tweaked cash flow management in resonance with those rates and inventory levels of different kinds of jewellery.
• Increase in sale by 17.1%.
• Reduction of Inventory cost by 13.5%.
• Reduction in working capital requirement by 12%.