Supernova Award Category

The Problem

Home Depot's prior assortment planning process was unable to deliver improved profitability at the category level.  Opportunities involved reducing total cost for the assortment while improving the rate of full-price versus clearance sales for the entire category not just moving profit from one item to another within the category. Home Depot, in order to continue growing and innovating their business, needed to find a new system that incorporated all of their business needs into one package. 

The Solution

Home Depot evaluated virtually every major Assortment Tool on the market and decided none would provide an advanced/transformed assortment process while meeting the unique needs of Home Depot.  Building on the Infor Platform, Home Depot staff and Infor staff worked together to configure a solution that now has 100% adoption and yields significant improvements in plan results and plan execution at a store-SKU level.  This solution is provided as a monthly subscription and can be scaled as Home Depot’s operational and business needs change. 

The results

Merchants and planners utilize customer, product, store, space, attribute, profitability, robustness, redundancy insights provided by data that is automatically gathered and presented in the Assortment Planning Tool to build planned SKU-Store assortments that achieve multi-dimensional objectives.  The solution uses scenarios to iteratively build alternative assortments while projected the results of each through hundreds of performance metrics.  The results have been so impressive that assortment has been a topic in multiple shareholder calls over the past two years as a means of competitive advantage.  While Home Depot will not reveal detailed specific results, the impacts of improved assortment have far outstripped the “average benefits” often cited in retail literature.

Metrics

Utilized data from sales of 700,000 SKUs in 2,000 stores to build assortments for 600 categories that fit into the space of each and every store and match the buying patterns of the customers that shop in each store and project 200 performance metrics for the new assortment. Home Depot has seen an improvement in overall workflows and efficiency since beginning use of the system along with significant monetary savings. 

The Technology

Infor Retail Assortment Planning

Disruptive Factor

One of the first categories to go live received an award called “Hogs for COGS” for the reduction in Cost of Goods Sold achieved through the assortment plan.  This one category’s impact paid for the entire assortment effort.  The complete Assortment Planning Tool team was selected by Ted Decker, Chief Merchant, to receive the President’s award for outstanding achievement last year. This significant honor recognized the contribution of the new assortment process and tools to performance of Home Depot in this very competitive marketplace.

Shining Moment

Traditional Assortment techniques follow a linear process addressing prioritization and carry decisions separately from defining what products fit into the space of each store.  As a result of this project, the products that match the buying preferences of the customers and fit into the space of the store are combined into a portfolio evaluation of products yielding a specific optimized assortment for each store.