The days of private runway shows with top-secret designs leading to months of waiting for the next biggest trend are all but over. Instead, retailers are under immense pressure to move faster across all areas of the merchandise, planning, and allocation process - with speed ultimately driving success. It’s time to tap into your data to uncover methods for introducing a whole new level of speed to your MP&A process. Celect and AlixPartners dive into a discussion covering: - Importance of a data-driven plan and open to buy to drive speed - Why product attribute information can inform and give confidence - Examples of how retailers accelerated their processes - How to optimize your inventory with advanced analytics

1. Buckle Up.
Here’s how to bring speed & accuracy to retail
decision-making

2. Welcome!
©2018Celect, Inc. All Rights Reserved.2
Shawn Ashworth
Managing Director
Todd Harris
Director of Marketing
Luca Signorelli
Vice President

3. Today’s themes
1. AI and Predictive are having the biggest impact on speed
2. Data-driven decisions help accelerate the merchandising
process and are most profitable
3. Speed requires accuracy
©2018Celect, Inc. All Rights Reserved.3

4. Celect Background
• Predictive Analytics SaaS platform to help
retailers optimize inventories through
data-driven decisions.
• We leverage a groundbreaking advances in
Machine Learning and Optimization.
• Top 50 Technology Innovation out of
MIT Artificial Intelligence Lab
©2018Celect, Inc. All Rights Reserved.4

5. Gartner expects that, by 2020, retailers will be
utilizing AI to make better and faster decisions.
Advanced analytics and smart data discovery
will lay the groundwork for AI to revolutionize
the accuracy and speed of retail decision
making.
- Gartner, Inc.
©2018Celect, Inc. All Rights Reserved.5
Source: RobertHetu. Gartner,Inc. Will PeopleorMachinesRuleAlgorithmicRetailing?December2017.

6. Interest in Artificial Intelligence is Growing in Retail
©2018Celect, Inc. All Rights Reserved.6

7. 7
DATA OVERLOAD
Inventory, POS, Browse History,
Transaction Logs, Search, etc.
BLURRED
PHYSICAL & DIGITAL
The Shift from Silos to Integrated…
Harder than You ThinkAREA OF OPPORTUNITY
Optimization & Speed Across:
Assortment Planning | Buy Accuracy | Store Allocation | Fulfillment
What can get in the way?
©2018Celect, Inc. All Rights Reserved.

8. Our approach in retail is unique because we focus on value creation driven by
analytical insights
Faster, deeper, and more sustainable results
Retail Analytics Platform
• Extensive toolkit of
proprietary retail insight
tools
• Formalized data analytics
across 14 modules that
span the entire retail
landscape
• Hypothesis driven and
value creation focused
• Delivers fact-based insights
within days, not weeks
Experienced, senior staff
• Over 100 senior leaders
with deep retail experience
across channels
• Core team with global
expertise across the retail
value chain
• Deep network of Subject
Matter Experts (SMEs)
• Experience and learnings
from hundreds of
retail industry situations
Proven implementation
• Extremely collaborative
with client teams
• Problem solvers who
address and clear
roadblocks
• Action, results oriented
• Focused on achieving fast,
yet sustainable results
Tailored, comprehensive
approach
• Appreciation of
dependencies across the
retail value chain
• Experience level that
appreciates how different
each situation is
• Multiple battle tested
approaches
• Flexibility to tailor to client
needs while focused on
tangible results

9. Retailers are changing their product development processes to move faster in a
highly competitive environment
Old
Slower, seasonal, gut-driven
New
Faster, season-less, data-driven
Seasonal calendar of 34-51 weeks
Fast track: 14-28 weeks Core product calendars spanning 20-50 weeks
Season-less 5-20 week calendars
Today’s winners are:
• Using data and insights to speed up the development cycle
• Shifting greater portion of assortment toward season-less
mindset
• Realizing greater margins than their slower competitors
But it is not just development cycles.
Buying and merchant processes need to keep up, infusing
data and insights to better manage inventory in-season.

10. Several key inputs should be considered to drive an effective merchandise strategy
• What products won and lost? Why?
• What was overall assortment
productivity (breadth/depth/GMROI)?
• What is the optimal mix of
trend/seasonal/core and price point?
• What should we tailor assortments by
store to maximize productivity?
• What are consumer expectations for
price, assortment/trend, quality, etc.)?
• How do our customers and non-
customers rate us on the above?
• What other macro-factors will impact
consumer behavior by category?
• Who are our competitors?
• What differentiates us?
• What is our market share and trend?
• What competitor entrances and exits
do we expect by market?
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Merchandise
Strategy
• Assortment architecture
• Financial targets
• Door strategies
• Promo strategies
• Are our category strategies aligned to
current trends? What should we tweak?
• What new material trends should we
incorporate?
• What are the new color trends?
• What new manufacturing trends exist?
All questions should be assessed by category

11. We use a variety of tools to increase the speed and sophistication of critical
hindsight elements (1/2)
• Compares gross margin return on
investment (GMROI) versus
investment across categories
• Where are category inventory
investments misaligned with returns?
• Assortment choice level comparison of
sales volume and GM rate
• Which low performing choices should
be rationalized vs. re-invested in?
• Performance comparisons by attribute
groupings (e.g. price, fabrication,
color, etc.)
• Which attributes are resonating with
our customers?
GMROI analysis Choice level comparisons Attribute analysis

12. We use a variety of tools to increase the speed and sophistication of critical
hindsight elements (2/2)
• See changes in breadth and depth per
style/color as store volume changes
• What is the target amount of choices
and style/color depth to maximize
margin dollars?
• Standardized buy calc approach
grounded in historical results by
product rank and store group
• How much to buy in total and by size
and how to pack?
• Determines what promotions are the
best and worst over time
• What types of promotions should we
run more or less of to maximize
margin dollars?
Breadth / depth by store group Buy depth analysis Promotion effectiveness

13. Timely and accurate assortment architecture guidelines are critical for developing a
product development execution plan
Assortment architecture… …informs development calendars… …which dictates ideal vendors
The “What”
Product type and pricing level
Core
Fast track
The “How”
Product development calendar types
by approximate duration
The “Who”
Partnership models available to each
calendar type
Seasonal
Total buy and seasonal product flowstrategy
Co-creation
In-house
Partner
Designed
Partner
Managed
Most control Least control
BestBetterGood
Core
Seasonal
Trend
NOTE: attributes vary by retailer
Innovation Track
Process is only half the equation.
Incorporating data-driven insights increases execution effectiveness exponentially.

14. ©2018Celect, Inc. All Rights Reserved.14
Speed & Accuracy Through Predictive Analytics

15. ©2018Celect, Inc. All Rights Reserved.15

16. Plan Optimization for High Fashion Department Store
$4.5M 111%in incremental store revenue full price sell-through increase

17. Buy Optimization for Multinational Specialty Retailer
77% 40%
full price sell-through
(increased from 46%)
reduced inventory
investment

18. KEY TAKEAWAYS:
1. Prioritize what drives value
2. Predictive analytics enables better decisions
3. Speed is a requirement to compete, but impossible if
you aren’t using your data
©2018Celect, Inc. All Rights Reserved.18

19. ©2018Celect, Inc. All Rights Reserved.19
THANK YOU
Contact:
todd@celect.com
sashworth@alixpartners.com
More:
celect.com/demo
alixpartners.com/
Twitter:
@celect
@AlixPartnersLLP