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dc.contributor.authorFeys, Lien
dc.contributor.authorGigliotti, Olivia
dc.contributor.authorVan Parys, Victoria
dc.date.accessioned2021-04-27T19:02:06Z
dc.date.available2021-04-27T19:02:06Z
dc.date.issued2018
dc.identifier.urihttp://hdl.handle.net/20.500.12127/6893
dc.description.abstractAt Van de Velde, within the lingerie industry a leading international company, the number of stock keeping units (SKUs) doubled over the years. Nevertheless, average sales per SKU have decreased almost by half over time. This increase in SKUs has been costly and harms the efficiency of the firm to a high extent and thus can be considered as bad complexity. In other words, this growth in SKUs affected the company negatively. Therefore, the aim of this project is to rationalise Van de Velde’s product portfolio for the brands Marie-Jo and Prima Donna and their respective side collections: L’Aventure and Twist. More specifically, this project focuses on reducing the number of SKUs for each of these brands. This rationalisation process must be conducted via quantitative, as well as qualitative analyses. The project started off with a set of interviews given by internal and external stakeholders. These people all shared their opinion about what they experienced as problems within the current offering. These people’s individual and combined hypotheses were fact checked via data. The data analysis was structured in a four-step process. Within the first step underperforming SKUs were identified. This was done very thoroughly, data per collection, per season, per year, per country and even per product style were analysed. In order to make sure not too much of the assortment would be cut, additional substitution analyses were conducted, so the risks of lost sales and eventually lost customers, when delisting a certain product or product line, could be lowered. The outcomes of all these different analyses formed the basis for the second step: developing an action plan, in terms of three scenarios. These three constructed scenarios reach from prudent to farfetched and are called: step-by-step, halfway there and at the top, by analogy with climbing a mountain. Each of these scenarios holds specific recommendations concerning families, styles, colours and size ranges. Via this scenario approach Van de Velde can choose how far they want to go. If the they decide to start off with the step-by-step scenario, the company can later on still choose to improve its portfolio by following up on the delisting presented within the second scenario, since these scenarios are built-up gradually. Below every domain will be introduced. Families - Research has shown that Van de Velde still has too many families, both in stayer and fashion collections. Therefore, it is suggested to further scrap fashion collection up to 3 families. For stayers, the specific family Undertones should be removed from the assortment and the amount of families in the same colour should be limited to maximum 3. Remarkable is that sales round 2 in the FW season drastically underperforms. A solution is limiting FW to 1 sales round. A last suggestion in this section is to introduce slow fashion collections that are available for multiple seasons. This to limit SKUs while improving the efficiency per SKU. In this slow fashion collections could be included: recolorations of stayers, introduction of new stayers, collections in basic colours and bridal collections for the main brands. Styles - Currently there is too much overlap in the assortment of Van de Velde. In order to prevent cannibalisation, there cannot be an overlap of similar styles within 1 family. Moreover, the overlap in more special styles across families should be limited and there needs to be set a maximum of styles per family. Analysis shows customers prefer certain styles in across the different brands. Therefore, it is suggested to reserve those styles for the specific brands. For example, full cup wire in Prima Donna and Twist, and no longer in Marie-Jo and L’Aventure. Last but not least, style preference shows to be country specific. Therefore, this report suggests adapting certain families to specific countries or regions in terms of styles and colours. This to be able to further grow in foreign markets. Colours - The analyses deducted two specific colour issues. One is the lack of a good performing red family in the stayer collection. A finding that was confirmed by different retail partners, as well as by sales representatives. Another is the underperformance of white across all families. This colour has become less popular but is still strategically important in certain countries. Therefore, a limited offer in slow fashion is suggested. Sizes - One recommendation that came out of the analyses is to scrap in cups. B underperforms in both Prima Donna and Twist, but especially in Twist. As retail partners and sales representatives emphasize the importance of a B cup in Prima Donna for older customers, it is suggested to scrap the B cup except for the stayer collection in Prima Donna. Similar to the B cup, the F cup underperforms in Marie-Jo and L’Aventure due to cannibalisation effect of Prima Donna and Twist. This cup is suggested to be eliminated as feedback from the field indicates that these customers are more easily transferrable to Prima Donna and Twist, due to the advantage of support and comfort. A cups in Marie-Jo and L’Aventure, G and H cups in Twist and J cups in Prima Donna, are proved to be less efficient but are still strategically important. Therefore, it is recommended to reduce these families and not entirely scrap them. For extreme circumferences the same applies. Another recommendation is to develop a fixed size table for every style to make it more logical for both customers and end-customers. It might however be possible to have a different size table for the three categories fashion, slow fashion and stayer to optimise the efficiency of its SKUs. Additional ideas - Whenever the bad complexity the bad complexity has been eliminated, there is room for innovation and development of new SKUs. This to address different customer needs and increase overall sales. One suggestion is to launch a “first-buy” collection, starting from an A cup at a low pricing point. This way, Van de Velde could address the problem of the high age for a first buy of its brands. Acquiring young customers from the start increases loyalty and repeat purchases. Another suggestion is to extend the size range for the Prima Donna Swim collection. Nowadays, loyal I and J cup customers are not addressed and thereby disappointed. Given the large sizes strategy of Prima Donna, also a larger size table for Swim is in line with the brand’s values. A last suggestion is to launch limited editions at different key moments during the year, such as Christmas or Valentine’s day. These products could be sold at a higher margin because of the scarcity effect and could further build on the brand image. Each of the developed scenarios will have an impact on the company and its people, whether it is the prudent one or the farfetched one. The effect of each scenario was researched within step three, via interviews. The internal and external partners who gave interviews at the start of the project, were contacted to give feedback on the possible rationalisation scenarios. All interviewees confirmed that scrapping the suggested items was justified. In order to make the company more futureproof in terms of product portfolio, a few suggestions are given. For instance: more data insights concerning customer behaviour and brand awareness could be useful to set up a brand switching matrix, via which cannibalisation between Van de Velde’s both brands can be researched into detail. Besides that, an activity-based costing (ABC) system, via which overhead costs are properly allocated, can be useful to develop a more transparent cost structure. This ABC system also allows to analyse the profitability of each stayer via breakeven analysis and gross margin return on inventory. All these tools can be used to follow up closely on the SKU portfolio and allow the company to make fast adjustments to its offering. In these fast-changing digital times, in which E-commerce is gaining traction, it is important to react swiftly to customer behaviour and if needed adjust the offering. These tools, together with the rationalisation presented within the scenarios, will guide Van de Velde successfully towards an optimal product portfolio.
dc.language.isoen
dc.titleManaging complexity in fashion: SKU rationalisation for a leading international lingerie company
dc.source.numberofpages181
vlerick.knowledgedomainInnovation Management
vlerick.supervisorKleer, Robin
dc.identifier.vperid228947
vlerick.companynameVan de Velde
vlerick.companysupervisorVan de Velde, Liesbeth
vlerick.programmeMGM Gent
vlerick.typebusresprojectIn-Company Project


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