STORES Magazine - February 2008 - (Page 60) NUTS AND BOLTS / BUSINESS INTELLIGENCE More Rhythm, Less Blues Inventory management system helps Guitar Center orchestrate growth BY CRAIG GUILLOT s one of the largest music specialty stores in the country, Guitar Center offers a variety of musical instruments and products meeting the needs of both amateur and professional musicians. Its stores combine an interactive, hands-on shopping experience with knowledgeable customer service and a wide selection of high-quality equipment, from guitars and drums to keyboards and sound systems. A Of late, Guitar Center has been growing at a rate of 30 stores per year and now has 215 locations in 42 states. But with that rapid growth comes a need for more control and management of storelevel inventory. Leveraging a custom solution through Minneapolis-based Quantum Retail, Guitar Center now has a stable growth platform without having to sacrifice its core values of inventory assortment. ecution and overall profitability management. It needed a comprehensive forecasting engine that could understand how to best replenish and allocate both fast-moving and slow-moving SKUs. “What makes you profitable at 100 stores certainly isn’t going to make you profitable and sustainable at 300 stores,” Messier says. “We needed a solution that could span all our product categories and give us a more sophisticated way of “We’ve been able to deliver true sophistication in our inventory management, which is profitable and critical in our rapid growth.” — Irene Messier, Guitar Center Rapid growth has created challenges ranging from weak merchandise forecasting and SKU optimization to promotional activities that don’t coincide with adequate inventory levels. Irene Messier, senior vice president of planning and allocation, says that as Guitar Center grew, it was missing the required level of sophistication to better handle inventory management, store ex60 STORES / FEBRUARY 2008 managing our assortment.” Each Guitar Center location carries thousands of products, from guitar picks to $5,000 custom Les Paul guitars; customers range from first-time guitar buyers to professional musicians. As a company grows, it inevitably will drift a little bit farther from its customer and can lose track of its moving parts, says Chris Allan, the founder and head of product strategy and marketing for Quantum Retail. Addressing this issue can be critical for owners or stockholders, who want to see that a company can increase in size with the same types of operational efficiencies that it had when it was young and promising. Quantum Retail leverages technology to solve problems such as unproductive inventory, out of stocks and unsuccessful just-in-time inventory flows. It eased Guitar Center’s growing concerns through the implementation of Q, a bolt-on inventory optimization solution that can sit alongside a retailer’s existing supply chain planning system. Continuously optimizing inventory for every item in every location, Q leverages merchandise assortment goals and strategies and offers multi-dimensional views of store-level item behavior. According to Allan, one of Q’s primary advantages is that the solution takes into account localization and doesn’t use a one-size-fits-all approach. Driven by the merchandising goal and strategy, it bridges the gap between merchandising and execution. “You can understand what is making a particular product popular in a particular store,” he says. “If I understand how the product is behaving in a particular store — how it is trending and booming and WWW.STORES.ORG http://WWW.STORES.ORG
For optimal viewing of this digital publication, please enable JavaScript and then refresh the page. If you would like to try to load the digital publication without using Flash Player detection, please click here.