How Paquetá the Shoe Company Plans to Boost Profits

With the fate of brick-and-mortar stores under constant scrutiny and reports of declines in foot traffic, retailers both stateside and abroad are looking for ways to innovate and maintain a competitive edge.

It’s for this reason that Paquetá the Shoe Company, a Brazilian footwear retailer with more than 300 stores, has deployed the Oracle Retail Clearance Optimization Engine. According to an Oracle spokesperson, it will help the shoe retailer “drive profits” and “streamline” inventory planning.

“Driving and converting foot traffic requires fresh assortments, but that must be balanced very carefully when your customers have less disposable income,” said Eduardo Smaniotto, VP of supply chain at Paquetá. “We cannot afford to have a customer disappointed due to lack of inventory, and we also cannot hold excess inventory or take severe markdowns. Our margin for error is very small, and therefore it’s essential that we have one source of truth across the business and manage to plan on a very granular level on a daily basis.”

Consequently, the spokesperson explained, Paquetá turned toward a data-driven approach. The addition of the Oracle Retail Clearance Optimization Engine joins Paquetá’s planning portfolio with Oracle, and the results have paid off for the retailer, according to the spokesperson.

“By leveraging machine learning inherent in the Oracle solutions, we have reduced inventory by 26 percent, eliminated more than 20 categories with little sacrifice to top line growth and improved profit margin by a factor of 3X,” said Smaniotto. He said the solutions have allowed his team to know “what to buy, how much to buy, at what time and where it must be for customer fulfillment.”

The spokesperson noted that the Oracle Retail Planning suite enables Paquetá to have a real-time, single view of its inventory. The spokesperson explained that focus “empowers management to drive significant margin improvements by optimizing promotions and assortment strategies with machine learning.”

Ray Carlin, SVP and GM of Oracle Retail, said that this suite of products has set a base for growth for Paquetá. “These solutions will help the business to deliver a better customer shopping experience, to drive growth and performance, and to enable the business to identify and address new market opportunities,” he said.

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