A REVIEW ON

THE NEW SCIENCE OF RETAILING BOOK

T.SUKEERTH 132
V ENKATA
PRATAP REDDY 136

Retailers have huge volumes of information at their disposal. But they're unsure
of how to sort through it and use it to make smart decisions. They're struggling
with profit-sapping supply chain problems. The book “THE NEW SCIENCE
OF RETAILING: How Analytics Are Transforming the Supply Chain and
Improving Performance,” explains how to use analytics to better manage your
inventory for faster turns, fewer discounted offerings, and fatter profit margins.

 Authors Marshall Fisher and Ananth Raman, argue that the time is ripe for
“rocket science retailing.” Just as Wall Street was transformed in the 1970’s by
the influx of physicists, engineers, and “rocket scientists” with mathematical
techniques that allowed the harnessing of vast, complicated transaction data, so
too retailing is now ready, and in fact beginning a “rocket science revolution.”

The authors draw on examples from a diverse group of international companies

to show how smart retailers are using analytics to transform their supply chain.
How they are bringing costs down while driving revenues higher—in effect
turning their supply chain into a brand enhancer, a speed enabler, and a true
competitive advantage.
In a thorough step-by-step manner the book outlines how we can develop our
own rocket science practices in key areas, and how we can:

 Greatly improve the forecast accuracy

 Better decide how much inventory of each product to carry in each of
stores
 Develop tools for assortment planning that can help
determine which products to carry, and how best to price them
 Mine the existing data for hidden “home run” products, and use early
sales data to predict demand for the life cycle of a product.
 Craft a more profitable way to deal with markdowns.
 Create a flexible supply chain that can respond quickly to demand signals
 Develop new practices to better handle a range of retail management
challenges including: How to drive incentives, improve store-level
execution, evaluate the merits of new information technology, structure
organization and implementation plans, and much more.

The New Science of Retailing will show us how to create a high-tech

forecasting system supported by a modern, flexible supply chain, and how
successfully mixing the company’s traditional retailing art with the best
practices of the new, analytical, “rocket science” revolution to gain greater
profitability and operational excellence.

This book describes how to apply modern analytical supply chain tools and
concepts to retail management, with particular attention to pitfalls that hinder
successful execution. Written for executives in retailing, the book has many
quotes from successful retail executives and numerous examples of pitfalls.
For example, it demonstrates with a numerical example why it may be
profitable to use airfreight for apparel - the resulting shorter lead time enables a
retailer to cope better with demand uncertainty (forecast error).
The authors argue persuasively that appropriate metrics are critical for good
supply chain performance. For example, one should use the sales-capture rate
instead of the so-called "in-stock rate" (percentage of time an item has positive
inventory) since inventory records are notoriously inaccurate; when the
computer says there is one item in stock, often that unit isn't in the proper
display space so no potential buyers can find it, and hence sales won't occur.

This book is quite well written and understandable and enjoyable to read.