
Ever since 2012 adidas has been using Smart Supply in Europe. They use this online software solution for the replenishment of its own stores and those of its key accounts. The large German sports multinational struggled to efficiently replenish stock in its shop-in-shops. Chainbalance had already implemented an algorithm for adidas own- retail stores. But providing good service to the key accounts of the sports brand remained a challenge. Implementing Smart Supply for this sales channel proved successful. It enabled them to replace their costly business intelligence system with the Cloud solution from Chainbalance. Besides reducing the IT costs, it quickly delivered a higher return on the store shelves of its external shops.
Highlights
About adidas
- large German sports multinational started in mom’s wash room in 1924
- from a mission to provide athletes with the best sporting equipment to a worldclass sports brand
- today they operate the company through 7 headquarters across the world
- with a total production of 1.1 billion sports articles per year
Challenge of adidas
After Chainbalance had already implemented an algorithm for adidas own-retail stores, the German sports multinational struggled to efficiently replenish stock in its shop-in-shops. Particularly when it came to providing good service to its key accounts.
Results with Smart Supply
- significant cost savings on IT
- more shelf space in shop-in-shops
- 15% higher sales in franchise stores
- better allocation of assortment based onconsumer demand
Smart Supply already successful for adidas own-retail stores
Chainbalance had already implemented an algorithm for adidas own-retail stores in SAP. This meant the old business intelligence system, that had previously been used to redistribute inventory, was no longer used or maintained for adidas own stores. However, the Smart Supply solution had not yet been implemented for the other sales channels, like shop-in- shops. This posed a challenge, especially for the key accounts.
Higher return at SportScheck and Breuninger
adidas felt a strong need to effectively replenish stock in its shop-in-shops in order to get the maximum return out of its sales potential. Especially for the key accounts of SportScheck and Breuninger, adidas wanted to offer the best service and optimal replenishment possible. The primary goal was to increase the return on the shelf space they had. The sports brand had good experience with Chainbalance for its own retail stores. If this could also be successfully implemented for the shop-in-shop sales channel, it would enable them to make the full switch in their stock replenishment system and part company with the costly system that they were still maintaining.
“Due to our previous experiences with Chainbalance we dared to confidently part company with our costly BI system. By doing this we reduced our IT costs and achieved a better result.”
Effective and efficient SaaS solution
Implementing Smart Supply does not require a big investment to get started. The inventory optimisation software is a SaaS (Software as a Service) solution. Chainbalance takes care of all updates, installations and optimisation for you. The full Cloud solution means adidas is always using the latest version of Smart Supply.
The store inventory of the shop-in-shops of adidas is determined via Smart Supply based on the actual sales, the inventory available and the individual store settings. Every day, the software uses an algorithm to calculate the inventory target level of each SKU. And every night, orders are created to realize these levels in each shop. Not 1-on-1 replenishment, but dynamic stock management based on the purchasing behavior of the consumer in the shop. This results not only in a more economic IT solution, but also better algorithms for the sales channel.
“By improving the allocation of our assortment according to the consumer demand, we realized not only more sales but also extra shelf space for our brand in the shop-in-shops.”
adidas increased sales by 15% in franchise stores
With its many different sales channels spread across European countries, the IT landscape at adidas is very complex. The sport multinational experienced a very simple implementation process with the SAAS solution from Chainbalance. This makes it a robust and flexible solution that enables the sports brand to respond more effectively to customer demand. And from the commercial point of view that delivered great results right away. By providing better replenishment to its key accounts, based on optimal sales potential, adidas increased sales in its franchise stores by 15%. Because the assortment was better allocated according to consumer demand, the sports brand received more shelf space at its shop-in-shops.
Chainbalance also provides full POS data cleansing for their own mono brand stores and key accounts. This allows them to monitor sales results and inventory information weekly across all of Europe.