New Technology Helps Nip Markdowns in the Bud

Executives at Virginia Beach, Va.–based Products Preferred LLC think the best time for retailers to stop markdowns is before they begin. That’s the premise behind the company’s business model. That is, get rid of the dogs before they get to the floor, said company chief research officer Peter McGuinness, who, with former Cole of California executive Bill D’Arienzo, launched the company three years ago.

It’s only until now with advancements in technology that the company is taking off. The company’s path to reducing markdowns is through keen insight from the consumer at the line-planning stage. With a database of more than 8 million consumers from every walk of life, the company can get feedback on styles before they go to the sample room, where time and money are invested in materials and labor.

These people can’t just walk into an overseas factory to see styles in production, so the company brings the styles to them through virtual samples placed on a 3-D avatar, or “persona,” as McGuinness described them. The personas can be created and molded to reflect a retailer’s targeted customer if needed.

The retailers can also specify what type of feedback they need. It could be color preferences or a design feature that needs to be tweaked. For multi-branded companies, brand-loyalty rankings can be measured.

The interview subjects get some type of incentive and are usually enthusiastic about participating, McGuinness said. The feedback can also chart price elasticity to determine what price point has the potential for the biggest gains.

The results come in an annotated multi-media package with a turnaround of one to three weeks. That’s usually enough time to make critical decisions to save time and money on material purchases, labor and allocation of other costs. Fees are based on how many points of information are needed.

“Manufacturers are going to save a lot of money on things like sample yardage and time. On the retailer side, they’re saving money with fewer markdowns and selling more goods at first price. Plus, they’re saving floor space, and the return per square foot is much better,” McGuinness explained.

“Hindsight will tell you that you had very little chance of selling something. Now, we hope to do that.”

McGuinness said there are few if any companies with its same business model. Oracle’s ProfitLogic division has made inroads with software using algorithms to track purchase history to determine when the best time is to mark products down.

But Products Preferred’s aim is to get a jump on consumer behavior before that point.

“We hope this changes the ways manufacturers and retail do business,” McGuinness said. “You need to bring the buying process into the 21st century. Retailers are cutting back in every way possible. This hopefully can offer some risk reductions.”

Contact information is available at www.productspreferred.com.

Levi’s Moves Sourcing Transactions to the Web

San Francisco–based Levi Strauss & Co. is moving closer to a paperless environment, having transferred its sourcing transactions to an Internet-based platform.

The company has enlisted New York–based TradeCard Inc., whose software platform eliminates paper documents from vendors and trading partners for purchase orders, invoices and compliance checking.

Levi’s plans to bring 225 vendors from Europe, Asia and the Americas onto the system, which will interface with Levi’s existing ERP accounting and order-processing system. It will consolidate payments and streamline customs compliance by sending data electronically to customs brokers.

The aim is to inject speed and visibility into the supply chain. Levi’s is expected to go live with the system sometime during the first quarter.

“TradeCard will complement the existing sourcing landscape at Levi’s to provide better control over the movement of product and money outside the four walls of the organization and into the extended supply chain,” explained Kurt Cavano, TradeCard’s chief executive.

In addition to the software itself, the company has local support via banks, freight forwarders and other agencies in 45 countries.

Other clients include Columbia Sportswear and Wolverine Worldwide. For more information, visit www.tradecard.com.

Sunrise Debuts Hosted Services for Microsoft Software

Winston-Salem, N.C.–based Sunrise Technologies, through partner SolidSpace, will offer the popular Microsoft Dynamics AX business-management software program as a hosted service offered on a per-user monthly basis.

The new format will enable smaller manufacturers and wholesale distributors to automate and streamline business processes with more flexible contract terms and no upfront hardware and software costs.

The company recently opened a Los Angeles office to service West Coast brands. Sunrise is a Microsoft Gold Certified Partner, which is given to companies with the highest level of expertise. It also gives the company priority status for support as well as advance information on new products.

Sunrise President John Pence said the company encountered inquiries from a number of smaller companies that were struggling with planning problems. A hosted service was one way to answer those needs, he said.

For more information, visit www.sunriseconsult.com.