LifeWay Christian Stores Bolsters Assortment Through Localization
Despite running 170 stores across the US and an e-commerce website with several million store/SKU combinations, LifeWay Christian Stores’ allocation and replenishment processes were largely manual and spreadsheet based. Order quantities tended to reflect predetermined static stock levels rather than dynamic sales trends. Assortments were largely standardized across all stores and there was a limited ability to address unique store-level assortment needs.
LifeWay knew it needed to update its merchandise system and processes to keep growing and satisfying customers. What was needed was an integrated system that would allow for localized store-level intelligence to be efficiently integrated into the centralized planning process.
LifeWay wanted a system with robust, all-in-one functionality. The business needed a ‘single version-of-the-truth across the enterprise’; a clear, dynamic picture of future demand, calculated from store-level sales data. It needed to accurately allocate and replenish products and be dynamic with models smartly changing at the store level in reaction to sales trends without manual intervention.
“We wanted a forward-looking forecasting process that was easy to use, but with all the science built-in,” said Bill Crayton, VP of Merchandising for LifeWay. “After the demos and a full scoring process my staff overwhelmingly selected RELEX. They provided the tools and the expertise we needed. They also offered a software-as-a-service model which we wanted.”
Lifeway began by addressing allocation and replenishment across all their item types including seasonal, ongoing, basic, new and replacement. It all needed to be done in one system down to store level. So, in partnership with RELEX, they developed a two-phased process of macro- and micro-localization.
Macro-localization came first and works from a centralized assortment plan, clustering stores together and varying assortments within store groups. Dynamic store replenishment levels and parameters are set along with store-level forecasts and order points. A forward-looking demand forecast can also be shared with the company’s publishing arm and external vendors.
Next came micro-localization, which infuses store-specific intelligence into the process – from assortment-specific requests to significant sales trends to special event awareness. For instance, as a major bookseller, LifeWay finds that local authors sell well in their areas and wanted to ensure store managers could respond to such opportunities. Additionally, stores frequently host events that may require a one-time increase in inventory in specific items relevant to an event.
Additionally, the RELEX mobile application is being rolled out to stores to empower managers and associates to act to improve their individual store performance. For example, they can review available products and select ones they want to add to their store’s assortment plan based on their unique knowledge of their customers. They will also be allowed to request adjustments to their store’s minimum presentation stock. The mobile application will increase the communication and collaboration between the centralized planning and store teams ensuring each store’s customers are better served and important in-stocks are maintained.
“The result is that we can now better manage store-level inventory and assortments which has allowed us to improve inventory turnover, lower clearance inventory, manage markdowns and see margin increases,” says Crayton. LifeWay now manages their stores and e-commerce with one team using one system and a single view of performance.
“Our entire merchandising team sees RELEX as a useful tool for managing assortments and gaining quick access to information,” added Crayton. “We now have a platform for central office and store associates to work together to improve store-level assortment breadth, depth and performance.”