If you’re seeking ways to enhance your product selection and boost sales, understanding the optimal assortment planning process can be incredibly beneficial.
But have you ever wondered how retailers decide which items to carry and in what quantities? This decision-making process is rooted in strategic assortment planning.
Assortment planning involves selecting which products to offer, determining the appropriate quantity to stock, and allocating them effectively across various channels and locations. With numerous elements to take into account, knowing where to start can be overwhelming. Fear not! In this blog post, we will break down the six steps of the assortment planning process.
Whether you’re new to assortment planning or just looking to refine your approach, follow these steps to create a successful plan that drives results for your business.
Step By Step Assortment Planning Process
Assortment planning plays a crucial role in the success of any retail business. You must understand and then follow the full-proof assortment planning process:
Stage 1: Market Research and Analysis
Before even thinking about what products to sell, retailers must conduct thorough research into their target markets, competitors, and broader industry trends.
This might involve gathering data on consumer buying habits, preferences, and pain points; evaluating competitor strengths and weaknesses; and staying up-to-date with the latest developments in related fields such as technology, design, and sustainability.
Equipped with these insights, retailers have the ability to examine and evaluate their results to detect possible shortcomings in the market, expansion possibilities, and sectors that require enhancement. Additionally, they can utilize predictive analytics methods to estimate forthcoming demand, which will be instrumental in guiding future procurement and inventory control choices.
Stage 2: Category Management
With a clear understanding of their target market and the wider landscape, retailers can then turn their attention to categorizing their products and services.
Category organization entails classifying similar items based on common attributes like purpose, utilization, or consumer demographic. This approach enables retailers to grasp the significance of various categories within their assortment and customize their promotional strategies accordingly.
Efficient category administration consists of establishing distinct aims and benchmarks for every category, including sales targets, profitability percentages, or market penetration rates. These key performance indicators (KPIs) can subsequently serve to monitor development and assess accomplishment over a period.
Stage 3: Range Planning
Range planning in retail is about deciding on specific products you can offer within each category. This usually involves you to have a look on multiple factors, including:
- Consumer demand and feedback
- Competitive positioning
- Pricing and cost structures
- Supplier availability and reliability
- Seasonal trends and fluctuations
- Store layout and presentation
By carefully balancing these factors, retailers can curate a range of products that meet their business objectives while also satisfying customer needs and wants.
Stage 4: Space Planning
The arrangement of items for both physical and online retail spaces is known as space planning. This could mean making blueprints for stores, constructing digital exhibits, or enhancing search engine algorithms to present the most suitable goods to specific clients.
The main goal of space planning is to establish an effortless and captivating purchasing journey, which encourages customers to explore and buy. Factors such as customer movement, indicators and labels, chances for combining different types of merchandise, and advertisements are all significant when devising a plan.
Regardless of whether it’s a real or online store, these elements must be carefully thought out to ensure a smooth and enjoyable shopping trip.
Stage 5: Open-To-Buy Planning
Open-to-buy planning involves calculating the amount of inventory required to meet projected demand while avoiding excessive stockpiling or out-of-stock situations. This requires clear collaboration among buyers, planners, and finance teams, along with regular communication with suppliers and logistics partners.
Key inputs into open-to-buy planning include historical sales data, current inventory levels, lead times, and delivery schedules. By accurately forecasting demand and managing inventory accordingly, you can minimize costs, reduce wastage, and maintain healthy cash flows.
Tip: REPLAN is a smart retail planning software that helps retails with Demand planning, OTB(Open to Buy)R, ange & Assortment Planning, WSSI(Weekly Sales Stock & Intake), and Allocation & Replenishment
Stage 6: Performance Tracking
Finally, once products are on the shelves or listed online, it’s essential to monitor their performance closely and adjust tactics as necessary. This might involve tracking sales figures, measuring conversion rates, soliciting customer feedback, or conducting regular audits of inventory levels.
Retailers can fine-tune their assortment plan, tweaking everything from product selection and pricing to promotion and distribution strategies. Using assortment planning tools retailers can spot emerging trends, make the most of the new opportunities, and stay ahead of the competition.
Conclusion
Assortment planning is a complex process that demands careful consideration of various aspects. However, along with adopting a systematic approach and focusing on the six stages outlined above, you must adapt to the best assortment planning practices. Whether you’re just starting or looking to revamp your existing assortment strategy, remember that mastering assortment planning takes time, effort, and continuous learning. But with persistence and dedication, you can unlock new growth opportunities, strengthen customer relationships, and achieve lasting prosperity in today’s fast-changing retail landscape.
