Making the right product picks and bringing in the right quantities of supplies to match market demand are crucial decisions for any retailer. Assortment Planning helps to organize the store inventory in such a way that the problems of under and over stocking is taken full control of.
2. WHAT IS ASSORTMENT PLANNING?
Making the right product picks and bringing in the right
quantities of supplies to match market demand are decisions
that collectively make an assortment plan.
Assortment planning in retail involves selecting the collection of
products which will be on offer in particular locations and during a
specified season.
It considers the financial objectives and seasonality of the product
selection in a way so that both you and your customers gain from
the outcome.
3. HOW IS ASSORTMENT PLANNING DONE?
The decision of whether to or whether not to include a particular
product in the assortment plan require a few evaluation and analysis
from both retailer and customer point of view.
The selection process of products in assortment planning is done
through a thorough evaluation of the product attributes like brand,
functionality, price, size, stock keeping units (SKU) etc. to
comprehend the preferences of the customers.
The assortment plan mentions the products that come under your
categories, sub-categories, segments, and sub-segments.
4. WHY ASSORTMENT PLANNING?
The challenge is to estimate the right amount of stock for the shelves.
If the stock is less than the optimal amount, there are chances that potential customer and sales are lost. If the
stock exceeds too much beyond the optimal amount, then the excess inventory is put up for offers and income
is lost. This is why assortment planning in retail is of paramount importance.
On average, in-store shoppers spend more than online shoppers. In fact, 40% of in-store customers spend
more than they had planned compared to just a quarter of online shoppers. Hence, for financial improvements
of a store assortment planning should be performed.
5. WHAT DOES AN ASSORTMENT PLAN
INCLUDE?
Assortment planning does not only mean inventory purchasing and seasonality.
Other considerations include:
Price point
The shelf life of a batch of products
Category proportions
Width and depth: The width is the number or variety of different product
categories. The depth is the amount of product and brand variation within an
individual category.
Visual merchandising
Store layout
Promotions
Setting up Growth goals (Should start assortment planning process from this.)
Reorder points
Lead time
6. STEPS TO BE FOLLOWED FOR
ASSORTMENT PLANNING
Setting goals to keep track of the team and progress made over time
Historical data to be examined well to judge the rational goals and
products that need to be added in the bin.
Include the understanding of the customer purchase decisions through
product hierarchy in the assortment planning process.
Use clustering for store grouping based on both performance (e.g. sales
volume) and non-performance (e.g. store size) parameters.
Cross-merchandising should be performed for better shopping
experience of customers at a time to gain customer loyalty, attract more
foot traffic and increase sales.
Figure out the appropriate balance in product categories, sizes, variations,
Stock Keeping Units, prices etc.
7. ASSORTMENT
PLANNING AND
PLANOGRAMS
Efficient assortment planning can only be done
with accurate data exchange between your
inventory, space allocation and assortment plan.
Planograms holds precise data on space
allocations and days of supply information of each
product.
Assortment planning or inventory planning and
Planograms both complement each other to help
in financial improvement and maximize
profitability. Any alterations made in the
assortment affects the planogram accordingly.
Product addition to the assortment plan leads to
changes in the planogram. Product removal on the
other hand if there is stock left on the shelf then
no change in the planogram if not the necessary
changes ought to be made.
8. BENEFITS OF INCLUDING
PLANOGRAM IN
ASSORTMENT PLANS
Shelf Space Planning through planogram
creation maximizes space and efficiently
executes demand-driven category
and assortment management.
Planogram creating software helps to
create cluster and assortment optimized
individual store planogram. After a
complete assortment planning process,
planogramming is done that results in a
single picture of the assortment plan
including new, ongoing, and leftover
product that can be assigned to
planograms to align with space plans
and constraints.