How DK Company increased sales by 46% while decreasing inventory by 15% in 5 weeks

Case Study: Multi-brand fashion group

Sometimes, you run a proof of concept (PoC) that’s so successful, you just have to turn it into a full-blown case study. Which is what happened when we partnered up with Danish multi-brand fashion group, DK Company, and implemented our data-driven supply chain recommendations inside a representative subset out of their 250+ locations. 

Within the timespan of no more than 5 weeks, the PoC we did for DK Company led to some staggering results. In this case study, we’ll show you what challenges DK Company were facing, how we solved these challenges for them, and how this helped maximise their Return on Inventory.

DK Company: 250+ stores in Northern Europe

To kick things off, let’s take a closer look at DK Company and some its main business characteristics:

• Type of company: Multi-brand fashion group
• Revenue: $473m
• Size: 2200 employees
• Stores: 250+ 
• Location: Northern Europe
• Business model: Franchise and own stores
• Number of brands: 20+

This should give you a better idea and understanding of the type of businesses that can really benefit from Retailisation’s software and services, although we can already create great results for retailers starting at $50m revenue.

Keeping up with the growth rates of competitors

When we first got in touch with DK Company, they were going through a process of digital transformation, as their competitors were growing at a faster rate than they were. Some of the challenges they were facing included:

• How to automate replenishment
• Suboptimal replenishment processes
• Overstock and inadequate sales numbers
• Lack of data & intelligence 

Solving these types of challenges is exactly what Retailisation’s data-driven supply chain solutions specialise in. And to start off, we ran our standard PoC to scientifically prove a positive impact with minimal risk. 

Setting up and seeing results in just 5 weeks

After the onboarding, we set up a Proof of Concept (PoC). This phase involved selecting the most representative stores and dividing them into test and control stores. 

Test stores will run according to our data-driven supply chain recommendations, whereas control stores keep running business as usual.

We spoke to Thomas Fjord Pedersen, IT Planning Manager at DK Company, responsible for all ‘merchandise planning’-related systems about the collaboration and the onboarding process. Thomas: “We had worked with a setup for re-ordering in our ERP system before.”

This turned out to be a very cumbersome and manual process. It wasn’t actively adjusting the target stock, for instance. “We quickly learned about Retailisation’s advantages, and decided to aim on fully turning it into our new robot for re-ordering.”

The 5 week onboarding and implementation process was also very much appreciated by the DK Company team.

“We have had a very professional feeling from day one – Retailisation suggested a strong proof of concept. From then on, we had a good dialogue regarding our system’s options. We received strong guidelines and training to become strong users. It was, in fact, our own change management process that turned out to be the only roadblock in order to roll out the system even faster.” - Thomas Fjord Pedersen

Below, you can see the results achieved by the DK Company stores involved in the PoC phase. This analysis is a snapshot of the results, 3 months after going live.

Fewer stockouts and a decrease in lost sales

First of all, the number of stockouts were reduced to a fraction of previous levels, significantly increasing the opportunity to convert merchandise to cash. 

Lost sales in test stores also decreased by more than 84% because the right products were available at the right time, all the time.

More sales (overall and per SKU) and higher sell-through percentages

Sales per SKU increased by more than 38% in only 3 months due to a better product flow to where consumers come to buy. DK now sells 66% more in the test stores than in control stores.

And, lastly, in this initial phase, the sell-through rate per SKU also increased, without having to remove redundant inventory.

Overall improvement of product performance

Apart from specific individual metrics improving, DK Company also experienced an overall improvement of its products in test stores. If we are to line up the differences between the control and test stores, we find the following.

Control stores (old retail reality)

In the control stores, products have:

• Low availability
• Low conversion
• Many lost sales
• Average productivity
• Hit and miss

Test stores (new retail reality)

In test stores, products have:

• High availability
• High conversion
• Almost no lost sales
• High productivity
• Every SKU counts

By adopting a responsive supply chain DK Company has achieved a significant sales increase with less inventory. This translates into an increase in Return On Inventory and overall business profitability. 

Benefits, results and what the future holds

By implementing Retailisation’s data-driven supply chain solution, DK Company was able to reduce stock and improve products' availability, which in turn led to:

• Increased sales
• Increase of available cash
• Increased ROI
• A fully automated replenishment process

Retailisation will continue helping DK Company increase their market share and outperform its competitors.

“As a company with 25 brands and more than 16.500 selling points, forecasting and planning is more important than ever. The complexity is enormous and we need automated systems to support us in decision making and to run the daily planning routines. Retailisation plays a big part in the future of DK Company, and helping it remain a relevant fashion partner. Their data-driven solution lets us meet high demands from key accounts, with automated re-ordering on a daily/weekly basis.” - Thomas Fjord Pedersen

Want to achieve similar results by implementing Retailisation?

At Retailisation, we make consultative recommendations to help you shorten lead times, increase throughput and maximise Return On Inventory. 

"When supply and demand are not in sync, supply chains generate waste, known as discounts and lost sales. The potential for margin improvement is huge when the shelf responds to real demand. It is our goal to capture that potential and improve your Return on Inventory." - Jasper Zeelenberg, Founder at Retailisation

Get in touch today and schedule an intro call if you’d like to achieve results similar to the ones DK Company experienced after implementing Retailisation’s data-driven supply chain recommendations.