How web-based system kept margins high for long winter apparel season

A long winter like the one just ended can make it to tough to maintain profit margins on apparel, but web-based inventory management and merchandising optimization system did just that for web sites operated by GSI Commerce Inc., the company tells InternetRetailer.com. "We came off a great winter, even though it was long, because we knew where our business was trending," says Matthew Hoffman, divisional merchandise manager for GSI Commerce.

GSI, which operates the online stores for the Denver Broncos and several other sports organizations as well as for major sporting goods retailers, such as The Sports Authority, used historical data on product sales and inventory movement to better control how much inventory to maintain for different products throughout the winter, Hoffman says. And by combining that data with forecasts from its merchandising and pricing optimization systems, GSI was able to maintain strong margins throughout the long winter without having to resort to steep markdowns. "As a result, our sell-through was much better," he says. "We knew which product types, styles and brands to sell, and were able to keep prices higher to get better margins." He adds that the system continues to become more effective and useful as it works with a more extensive history of customer buying behavior.

GSI uses in-house developed optimization software for buying, merchandising and pricing strategies. It integrates that software with the inventory management system within its retail management software suite from JDA Software Group Inc., which provides it with automated updates of inventory levels. "We can pull up reports any time with a web browser," Hoffman says. "We can updates throughout the day, because the business changes so fast."