Aptean Allocation, Forecasting and Replenishment
Safilo evolves SMILE to better serve e-commerce customers
Industry
Eyewear
Challenges
» Lacked agility needed to manage a high variety of products
» They needed to respond quickly to emerging sales trends and different retailer’s needs
Benefits
» Optimization of inventory levels, reducing overstock and stockouts
» Improved production cycles
» Faster responsiveness and performance
Safilo launches a new algorithm for automated replenishment for e-commerce
Founded in 1934 in Veneto, Italy, the Safilo Group is one of the eyewear industry’s principal players in the design, manufacturing and distribution of optical frames, sunglasses, sports eyewear, goggles and helmets.
Safilo Group designs and manufactures its collections by blending stylistic, technical and industrial innovation with quality and skillful craftsmanship.
With a global presence, the Safilo Group business model allows it to oversee the entire production-distribution chain: from research and development, with prestigious design studios in Padua, Milan, New York, Hong Kong and Portland; to production with owned factories and qualified partners that are able to ensure the highest quality standards for each product; and distribution which includes direct branches in 40 countries and a network of over 50 partners in another 70 countries, reaching approximately 100,000 points of sale worldwide including opticians, optometrists, ophthalmologists, department stores, specialized retailers, boutiques, duty free shops and sports stores.
The Group’s brand portfolio consists of proprietary brands Carrera, Polaroid, Smith, Blenders, Privé Revaux and Seventh Street.
Licensed brands include: Banana Republic, BOSS, Carolina Herrera, Chiara Ferragni Collection, Dsquared2, Eyewear by David Beckham, Fossil, havaianas, HUGO, Isabel Marant, Jimmy Choo, Juicy Couture, kate spade new york, Levi’s, Liz Claiborne, Love Moschino, Marc Jacobs, Missoni, M Missoni, Moschino, Pierre Cardin, PORTS, rag&bone, Rebecca Minkoff, Tommy Hilfiger, Tommy Jeans and Under Armour.
The objectives of the SMILE Project
In line with its strategy that places the customer at the center, Safilo has activated a strategic automated replenishment project that allows for the optimization of product availability throughout the global sales network.
Supported with Aptean Allocation, Forecasting and Replenishment technology, the program, named SMILE (Shelf Management, Inventory & Logistic Evolution), has been a win-win for Safilo and its customers.
“SMILE is an innovative automated replenishment program that allowed Safilo to revolutionize our traditional business model and how we collaborate with the eyewear chains that sell our products around the world,” explained Francesco Ferraro, who is responsible for the SMILE project.
With its advanced algorithm and ability to communicate directly with retail partners’ stores, the Aptean Allocation, Forecasting and Replenishment planning solution allows Safilo to acquire information relating to sales and stock levels and to best serve each location with the right products at the right time.
“From the beginning, the primary objective of SMILE was to put our customers’ needs first,” Ferraro said. “We deliver SMILE in a way that offers our retail partners maximum flexibility and adaptability to their requirements while ultimately creating a better experience for the end consumer.”
The Solution
The SMILE project leverages the functionality of the Aptos Forecasting, Allocation & Replenishment application.
“The Aptean Allocation, Forecasting and Replenishment solution enables us to collect sales and stock data from our customers, predict demand, integrate supply chain activities, optimize internal planning processes and send our products to stores in the best possible mix without creating overstock,” Ferraro stated.
This level of visibility and collaboration with retail partners allows Safilo to be extremely responsive to demand, even in situations where the planning requirements are highly complex.
“Planning in our industry is far from easy. SMILE helps us tackle a number of planning challenges, such as the high variety of products that we manage with three collections per year; the size of some of our retail partners, whose chains can number as many as 600 stores; and finally, the need to serve retailers with very different business models.”
“To date, we already have several algorithms that allow us to serve business models with direct shipping to stores or with centralized shipping and management in the warehouse,” added Ferraro. “We are also able to serve the new exhibition strategy of the show room concept.”
No matter the retailer’s size or business model, with SMILE, Safilo is able to execute just-in-time replenishments and be extremely adaptive to the retailer’s needs.
“The ability to respond just-in-time was particularly important when the pandemic hit. Despite the unpredictability of the epidemiologic curve and resulting social and commercial restrictions, we were able to respond quickly and effectively to emerging sales trends.”
Ferraro added, “During periods of disruption, we are still able to support the needs of our customers in an optimal way, which they have been extremely appreciative of.”
An “e-commerce ready” solution with dedicated algorithms and functionality
Importantly, the SMILE program also supports e-commerce with a new algorithm and functionality built specifically for this channel.
“The SMILE project keeps evolving to meet the evolution of the market and the changing needs of our customers,” noted Ferraro. “With the acceleration of e-commerce over the past two years, we placed a strong focus on supporting the unique needs of those retailers who operate online.”
When it comes to e-commerce, the main challenge is speed. With demand changing at a very fast pace, the forecasting phase is more difficult, with seasonality curves and trends often quite different from the behavior seen in the physical realm.
“To address this, working closely with Aptean Allocation, Forecasting and Replenishment, we have developed an e-commerce specific algorithm that will allow us to better serve both pure e-commerce retailers and omnichannel players.”
“After a detailed market research and analysis phase which involved both the Aptean Allocation, Forecasting and Replenishment and Safilo teams, we were able to introduce new parameters, settings and KPIs which are specifically designed for e-commerce,” added Ferraro.
These new features fully support the needs of e-commerce. “For example, they allow us to make more precise sales forecasts at the single item level and we have added innovative functionality to predict the returns of end customers, which is particularly relevant for today’s retailers,” Ferraro said.
In 2022, Safilo will complete the roll-out of these evolutions to the SMILE program and, in consideration of the remarkable results already obtained, expectations are high.
The Collaboration with Aptean Allocation, Forecasting and Replenishment
According to Safilo, the Aptean Allocation, Forecasting and Replenishment solution is strategic to the company in terms of both business results and its forward progress toward digital transformation.
“Our collaboration with Aptean Allocation, Forecasting and Replenishment is highly synergistic,” said Ferraro. “We receive continuous support for major decisions related to innovations and for ongoing solution maintenance. We view the Aptean Allocation, Forecasting and Replenishment colleagues who support our business as an extension of the internal Safilo team.”
“To address this, working closely with Aptean Allocation, Forecasting and Replenishment, we have developed an e-commerce specific algorithm that will allow us to better serve both pure e-commerce retailers and omnichannel players.”
Francesco Ferraro, Responsible for SMILE project, Safilo
The Benefits
The benefits of the SMILE program have been significant and far-reaching for all parties involved.
“Our production cycles, inventory levels and sales KPIs have been optimized and improved. Our retail partners are also extremely satisfied with the project. They are able to reduce overstock while benefiting from superior product availability, which has led to increased sales and greater shopper satisfaction.”
In particular, the benefits of SMILE can be quantified as follows:
› 15% increase in sell-out
› 15% reduction in stock levels
› 100% facing coverage
› 99% service levels
› 100% on-time deliveries
“The success of the SMILE project is producing a significant increase in the number of retail partners that want to join the program,” said Ferraro. “Continuous evolution is in SMILE’s DNA thanks to an advanced system and a highly qualified and professional work team. This presents a winning mix to be ready for the challenges of the future,” he concluded.
