The supply chain for hard luxury (high end jewellery and watches) is defined by unique challenges. Unlike how most products are otherwise generally mass produced, each piece of hard luxury is either unique or part of a limited collection. Even though these luxury goods are timeless in their value and appreciation, there is still an expectation of novelty from the customer. This sparse demand, combined with a continuous push for novelty, are the main challenges in the supply chain in hard luxury.

Despite a growing online presence and the rise of e-commerce across all industries, the vast majority of hard luxury purchases are still made in store. Demand is generated by the display presented before the customer .The catalog for a company selling hard luxury can include thousands of references, yet most stores are often limited to only a few hundred items on display, sometimes just a few dozen. If after 3 to 6 months the pieces haven’t been sold, they are rotated to other stores. The best stores tend to get the best and latest goods, and the remaining stores are left with leftovers, often preventing them from realizing their true potential.

As the demand in hard luxury is extremely erratic with a high degree of uncertainty and inventory rotates very slowly, a probabilistic forecasting approach is needed to have a thorough understanding of anticipated demand and assess the performance of various assortments.

Learn more about Predictive optimization for Hard Luxury supply chain.