Customer Profile: Academy Sports + Outdoors
Excerpts from a speech by Academy Sports + Outdoors’ VP of Merchant System Operations, John Jarrett at the Retail Industry Leaders Association (RILA) LINK 2020 event.
Can you tell us a little bit about Academy Sports + Outdoors?
Academy Sports + Outdoors has been around for more than 80 years. We are one of the largest sporting goods and outdoors retailers in the United States. We operate 259 stores in 16 different states, and three distribution centers serve those stores.
We've expanded substantially over the last five years, opening 63 new stores and branching into new markets. Our vision is simple: it's to be the best sports and outdoors retailer in the United States.
What was the business situation at Academy Sports + Outdoors before Invent Analytics?
In recent years, we have implemented new ERP, replenishment, and allocation systems to position ourselves for optimization opportunities. We were running on a traditional replenishment platform with numerous challenges to drive the best performance. We had workload and efficiency issues managing 19 plus million records.
In 2018, we had two primary strategies. Number one, we wanted to be the power merchandiser of sports and outdoors. Number two, to achieve that, we needed to improve the productivity of our inventory and our fulfillment execution.
What goals did you want to achieve? How was your solution provider selection process?
Our selection process had two priorities. First, we wanted to deliver significant financial impact while simultaneously building long-term value by providing customers with superior product availability. We were looking to improve in-stock and reduce lost sales.
Secondly, we wanted speed and agility. We wanted a fast technology plan to deliver meaningful financial impact in months. The solution we would select had to be smart. It needed to predict financial results even before the implementation and be rigorously testable so that Academy could get on the fast track and move quickly with confidence.
"Invent Analytics demonstrated a new technology and science that can drive financial results. Their system was smart and flexible, allowing users to simulate results before execution. They were the only provider capable of delivering on our priorities in the desired timeframe."
How did you decide to work with Invent Analytics?
During our selection process, we evaluated five solution providers. Invent Analytics demonstrated a new technology and science that can drive financial results. Their system was smart and flexible, allowing users to simulate results before execution. They were the only provider capable of delivering on our priorities in the desired timeframe.
Can you tell us a little bit about the project and the implementation process?
To meet our objective to deliver financial impact in 2018, we created a pilot with a rapid 3-step process.
1. The implementation began with historical analysis and simulations, and this helped us understand categories that had the largest opportunity. Once we identified the categories, Invent Analytics ran a live A/B field test to validate simulations. That helped us identify changes in inventory levels and their financial impact on an item/store level.
2. We then did rigorous in-market tests to vet the system and prove financial results. We did that with 50 stores in 13 categories. The result gave us confidence to expand stores. The out-of-the-box solutions generated significantly higher revenue and margin dollars.
3. Lastly, we rolled out their solutions to the entire business. We have successfully transitioned 100% of our current replenishment items to Invent Analytics for both store and DC replenishment. As a result, we delivered a substantial financial impact on our initial project goals.
- Significant improvements for in-stock and lost sales
- Higher regular and promo sales, higher margins, and lower aged inventory
- A gross profit contribution in ROI
- Minimized inventory overhead and balanced weekly stock orders to the DCs
- Reduced store backroom and store labor issues
What were the key results that you’ve achieved?
We saw significant improvements for in-stock and lost sales. We have achieved higher regular and promo sales, higher margins, and lower aged inventory. All of which led to a material gross profit contribution in our ROI.
Speed to value
We have achieved these benefits in record time. Within three months, we were live with a Pilot. In two months, we were ready for a Roll-out.
Another great example of the benefits is holiday planning. Holiday fulfillment is always a difficult time as our volume outpaces our DC and store labor capacity. Invent Analytics enabled us to optimize in-stock and sales while minimizing inventory overhead and balancing weekly stock orders to the DCs. The system also helped to reduce store backroom and store labor issues.
The project also played a critical role in helping our company meet our corporate 2019 goals.
Tell us about your experience working with Invent Analytics
Invent Analytics’ partnership approach is vastly different from our previous experiences. It changed our mindset. Their financial optimization approach automated more profitable inventory levels, and it freed our business teams to adjust and change strategies based on insights collected from Invent Analytics’ science. Their platform combined all the forecasting replenishment and allocation functions and synergized roles to focus on desired output vs. functional execution.
The partnership turned out to be a truly cross-functional team. We now have a single functional group with Academy employees and Invent Analytics’ data scientists. This is what we call our “Hub Team”.
We have multiple meetings each week. We view dedicated Invent Analytics team members as Academy Sports + Outdoors team members and they help address our inventory challenges. Thanks to this team, our execution shifted from forecasting and parameter maintenance to report analysis and data management.
The solutions allow for continuous improvement as we embark on new initiatives that impact fulfillment.